As this directly influences the operational budget, the cost of acquiring a customer is among the top worries for a business owner. You can allow a bigger part of your marketing budget in other key areas by saving on customer acquisition cost. And this will eventually make your business run to the ultimate profitability.
In practice, the task is quite challenging as one should try to keep this cost to the minimum. In keeping their customer acquisition cost to a minimum, there are some tried and tested ways that have helped businesses.
To acquire customers with minimum efforts ask for recommendations
People often overlook what they see and what they hear. Especially in terms of their business partners and close friends, people trust people.
To start to acquire new customers at minimum cost and effort asking your customers to recommend your product/services in their social circle is a good point.
The same is just for customer reviews. For making a purchase, 67% of consumers read up to 6 reviews before finally trusting a product. The CAC can be dropped significantly by asking buyers to leave product reviews.
Getting the best out of the social media campaigns
This results in an increase in their CAC as nearly 86% of marketers uses paid marketing to acquire more customers.
It is also not assured that people who will come to your marketplace through a paid medium will end up in buying a product besides all.
As social media content goes viral, paid marketing may not reap the expected results. Your brand can reach millions of social media users in a matter of hours with content going viral.
Improving on the customer services for enlarging customer base
Nothing is more remarkable than customer service. People always tend to remember the last impression which they get from a brand while going ahead with a purchase and eventually leads to a lower marketing budget and lower CAC.
Improving conversions with audience re-targeting
Only 2% of visitors convert into customers on their first visit to an online marketplace according to AdRoll. To convert the visitors into buyers, there is no secret recipe. It remains spent unless you can track the visitors for paid advertising budget once spent.
To get more out of their paid advertising efforts this is where re-targeting comes in and helps the businesses to get more out of the rest. You can capture and nurture the unconverted leads by re-targeting customers. Then the default 2% this will ensure that your conversion is far greater.
Make your campaigns more productive by knowing your audience first
To run a marketing campaign knowing your target audience is very important. You may end up targeting a wider audience by not being aware of who your target audience is.
As most people may not be able to connect with what campaign is being offered to them such a campaign cannot reap the desired results?
Minimizing the marketing budget by investing in affiliate marketing
Due to its role in the reduction of CAC, the affiliate marketing model has seen acceptance globally. You can pay commissions if a sale is made is the biggest advantage of affiliate marketing is.
The CAC using affiliate marketing would help close the deal at 25%-30% of the cost which is spent on other mediums like paid advertising is what the stats show. One of the best options to minimize CAC is by increasing the competition.
Maintaining a balance between acquisition and retention
The probability of selling to an existing customer is nearly 60-70% according to Invesp. Not every business focuses on customer retention.
There should be an equal harmony between acquisition and retention as it is through the combination of these two that one can lower CAC from the view of the selling point.
For businesses who want to see incremental sales year after year, customer acquisition is a serious matter. As there are strategies that can significantly reduce CAC the cost which is associated with it is completely a different matter.
As showcased in adjoining case studies the above-mentioned strategies have proven track records. To keep their CAC to a minimum while earning good returns the marketplace owners should use these strategies.