Our COO, Shanaaz Trethewey, shares her opinion on the ongoing debate about the rising customer acquisition cost. Unplanned downtime, customer perception, the cost of sophisticated fraud detection, and the inspection of potentially fraudulent documents are the key costs yet to be quantified in this equation. Reach out to give us your view or engage with Shanaaz Trethewey to discuss your customer acquisition challenges. 

There is an ongoing debate about the rising cost of customer acquisition when we discuss the need to use digital tools to achieve what needs to be done, especially in the compliance and verification space.

And I agree – the unit cost of signing up a new customer grows each time we layer on another tool. It is logical since our digitally enabled customer-base demands this and there is an increase in regulatory requirements as we try to combat grey-listing and fraud.

So, I challenged myself with the question – how do all these “costs” stack up against each other? And from a birds-eye view it became clear, that as decision-makers, we tend to look at one side of the equation.  Or rather, just the quantifiable cost of sale components.

When reviewing organisational performance, we can easily extract the cost of customer acquisition; it’s easily measurable and quite evident as we all focus on top-line growth. 

However, where we may be falling short is how we quantify the cost of losing a potential customer and the role digital tools can play in minimising this. 

I know we can measure the net churn of our customer base, but it’s not so clear how we measure all our costs related to onboarding a potential client. What are the costs of being unable to obtain quality information quickly and efficiently, and the costs of losing the prospective customer because of this?  Time and salary measurements are an indicator – but they are an abstraction with many subjective contributing factors. The costs of following up for documentation, or inspecting the sequencing or apparent original documents begin to stack up and amplify as each step in the process is taken.

Seeking efficiency goes to the core of measuring the time taken to follow up on outstanding documents or losing a client as the pace is too slow.  An example of this would be our Gen-Z customers who challenge the need to supply manual documents – and we haven’t as yet fully accounted for this as this generational customer matures.

Although these types of losses are seemingly silent and invisible at a consolidated level, it’s time we make the best decisions to grow our businesses sustainably with transparency across all these inputs. After we process this, it may become clear to us that the cost of digital tools may not be as costly as initially perceived – and we are in fact reducing the cost of onboarding.

Reach out to give us your view or engage with me to discuss your customer acquisition challenges.

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