beginners

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Figure out not only who has a need for your product or service, but also who is most likely to buy it. Think about the following factors:

• Age
• Location
• Gender
• Income level
• Education level
• Marital or family status
• Occupation
• Ethnic background

Consider the psychographics of your target.

Psychographics are the more personal characteristics of a person, including:

• Personality
• Attitudes
• Values
• Interests/hobbies
• Lifestyles
• Behavior

Also consider how your product will change or alter their lifestyle. How and when will they use it? What kind of media does your target audience turn to for information? 

Evaluate your decision.

Once you've decided on a target market, be sure to consider these questions:

• Are there enough people who fit my criteria?
• Will my target really benefit from my product/service? Will they see a need for it?
• Do I understand what drives my target to make decisions?
• Can they afford my product/service?
• Can I reach them with my message? Are they easily accessible?

Adjust your marketing strategy according to this demographic

Your marketing strategy should be targeted towards your ideal customer. You'l also use this customer profile to decide for the marketing channels used, marketing budgets etc.

As you make these adjustments, keep an eye on the data you’re bringing in. The key to a successful marketing scheme is constant evaluation of your efforts. You can learn what works and what doesn’t so you don’t waste your time and energy on less-productive channels.

Let me first explain why i am motivated to tell this....

In the entrepreneurship summit of my college (NIT Silchar) called SRIJAN 1.0, a pitching competition was organised, my team cleared the screening but couldn't win anything. One of the reason of this was the fact that I was asked this term by the investor and I, although already knowing the calculated value, couldn't answer because of the unknown term and how heavy it sounded......

CAC or Customer Accusation Cost is the cost of convincing a potential customer to buy a product or service. It is a metric that has been growing in use, along with the emergence of Internet companies and web-based advertising campaigns that can be tracked.

This metric is important to two entities: companies and investors. The first one includes outside, early-stage investors who use it to analyze the scalability of new Internet technology companies. They can determine a company’s profitability by looking at the difference between how much money can be acquired from customers and the costs of getting it. Investors also view this the same way, they generally value the current metrics instead of promises of improving the future.

The CAC can be calculated by simply dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent.