Customer Acquisition cost- CAC is a cost of persuasive a customer to purchase your services. CAC helps businesses to determine how much they are spending on obtaining each customer. If you don’t spend your money wisely, you may go bankrupt.
Customer acquisition is an expensive procedure, thus reducing the CAC is essential for businesses to survive and grow in the long run. You can count CAC by diving the total promotional costs by the number of new customers. Here are a few tips on how you can reduce your customer acquisition cost.
Prioritize Appropriate Audience
Demonstrating your products and services in front of the right audience is extremely important. When you deliver your message to the right audience, your engagement will automatically increase. It may seem a bit challenging to find your niche audience, but you can find them through surveys, Google searches, and observing the market competition.
The majority of customers will stick to the brand that provides them with a personalized experience. Thus, to reduce your CAC, determine your target audience and offer them precisely what they need.
Customers abandon the store for multiple reasons. Sometimes they forget to purchase after adding things to a cart, or sometimes they see the final amount and change their minds. For whatever reason, a customer abandoning the store has a huge negative impact on the company.
Thus, sometimes a gentle reminder can encourage the customers to complete their checkout process. Retargeting is extremely beneficial as companies can easily generate campaigns for a specifically targeted audience. Companies already have sufficient customer information that can be used to retarget the customers and encourage them to purchase the products.
Improve Customer Retention
Study shows that repeat customers spend 67% more on brands than the new ones. In addition, convincing existing customers is easier than acquiring new ones. According to Forbes, it costs five times more to obtain a new customer than retain current customers.
Companies can reduce their CAC by increasing their customer repeat rate, previous orders, and average order values. Increasing customer retention can enhance a company’s revenue.
Enhance the Sales Funnel
A thorough sales funnel makes the buying process seamless for companies. It converts visitors into paying customers. With an effective sales funnel, businesses can gather information and get insight into the mindset of potential customers. The sales funnel consists of six stages: Awareness, Discovery, Evaluation, Intent, Purchase, and Loyalty.
You may not control customers’ actions, but you can increase sales and enhance your revenue with an effective sales funnel.
You can improve your customer acquisition costs by adapting to automation in your marketing strategy. Marketing automation, such as CRM tools, can easily reduce costs as it doesn’t require much human power.
With targeted marketing, you can gather client details, and CRM tools can publish gated content. Gated content makes it easier to accept and implement on email listing that provides them with the information regarding the targeted products or services. It reduces the CAC as companies do not need to invest in other resources.
In a nutshell, you can easily enhance your revenue by reducing customer acquisition costs. Reduction in customer acquisition cost can help you determine the difference between customer acquisition and customer lifetime value. With the reduced CAC, you can divert your efforts and money into other aspects of the business and enhance your revenue.