Customers Come Cheap in Digital World

Seth Godin takes marketers to task over their failure to adjust to the internet revolution which has seen the cost of cost of a new customer plunge, in some cases to close to zero.

What's the Latest Development?

In business, they say a bird in the hand is worth two in the bush. As Seth Godin reminds us, it's important to know how much it costs to get one new customer and, on average, what they're worth during your relationship with them. So what are we to make of the fact that for Facebook and Twitter, for example, the cost of a new customer is almost zero?

What's the Big Idea?

Godin says that when you can get people into a relationship for nothing, "you don't need to make much on each one to be delighted with the outcome." So what does that mean for marketers? "Dates, not singles bars. Subscriptions, not vegomatics," says Godin. For instance, don't go investing a lot of hype to get strangers to notice you once then put everything into a one shot transaction which few people engage in.

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Two new studies say yes. Unfortunately, each claims a different time.

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