How To Reduce Customer Acquisition Costs (CAC) For Your Ecommerce Business
Acquiring new customers is the primary goal for every business. Every business is aiming to gain new customers at a faster pace and reduced cost. However, even after trying several strategies, only a few businesses could reduce customer acquisition costs (CAC).
Before thinking of reducing the CAC of the business, you first need to understand the reason behind the high CAC. Use the cac calculator to know the average cost your company is spending to acquire a new customer for the business.
The reason why CAC remain high for the majority of the businesses is because of:
- CPC cost never goes down.
- CPM cost keeps on increasing.
- Your Target customers are looking for choices.
- The use of attention time is low.
If you can correlate with everything we just mentioned above, you are not alone. Almost every eCommerce business is facing the same problem and is actively looking for a solution.
How To Reduce Customer Acquisition Costs?
Today, every business is looking for a solution to reduce the CAC. In fact, we have done our research and experiment to reduce our company’s CAC. Fortunately, the methods we tried were effective to some extent, and we could reduce our CAC.
Seeing how effective our strategies were, we thought of sharing with others to help them out.
1. Adopt The Decoy Pricing Strategy
Pricing your products and services can impact your business heavily. A decoy pricing strategy is one of the best ways to reduce CAC. If you are not familiar with the decoy pricing strategy, the following example will help you out.
Let’s say you are in a movie hall and buying popcorn. You can see three options: small, medium, and large. The price of the small bucket is $5, the large bucket is $10, and the price of the medium bucket is $9. The price of the medium bucket popcorn follows the price decaying strategy.
2. Identify And Fill The Gaps In Your Funnel
In order to reduce the CAC, you need to analyze your conversion funnel thoroughly. Conversion funnels are the representation of the customer’s journey. If the funnel has any leaks, all of your customers will not be able to reach the end of the funnel.
Optimize your funnel to:
- Track the behavior flow of the audiences.
- Identify the pages with maximum drop-off.
- Find out all the friction points.
3. Focus More On Customer’s Lifetime Value
According to a study, you can increase your business revenue by 25% if you manage a 5% increase in customer lifetime value. There is no point in getting new customers if you cannot hold your old customers. This way, your business can never grow, or as a matter of fact, you can never reduce the CCAC.
The way you invest and focus on getting new customers, try to pursue customer retention in the same way. This will help you boost your business revenue and reduce the CAC.
4. Choose Influencers From Your Pool Of Customers
Influencer marketing isn’t cheap anymore. But what if we say that influencer marketing offers a gateway towards reducing CAC? Would you believe us? Well, if you follow our method, influencer marketing will not only be more cost-effective but will also bring new customers to your business.
You can use one of your regular customers as an influencer—Scout your customers who happen to have a fan following in thousands. Yes, doing so, you are limiting your reach, but at the same time, you are ensuring to reach out to a more relevant customer pool.
Invest In Content Marketing
There is a reason why marketers believe that Content Is The king. Contents are the only element of digital marketing strategies that can benefit your business simply by being there in front of the audience. Creating engaging content for your business can help your brand convey brand voice.
Content marketing can build credibility and redirect audiences onto your business landing page, especially for the guest post. However, the extent of the content marketing is not limited to this; it also acts like an anchor that holds the audiences on your page.