Do you know which channels/tools are generating enough of a return on your efforts and dollars? If the answer is “no”, take a closer look at your customer acquisition costs.
Cost of marketing + Cost of sales/New customers acquired
This is a powerful metric that can throw light on the health of your company/business, and can help you determine how much money, time and energy you should invest.
But your relationship with your clients/customers do not end at their purchase or selection. There is an ongoing process of relationship-building by keeping them in the loop on new products/ services, updates etc. which increases the odds of them purchasing from you again. This is where the CLV comes into play, essentially, the estimated amount of money the client is expected to spend on your products and services in their lifetime. We call this your CLV – Customer Lifetime Value and the higher the CLV : CAC the better.
Every business is different and so are its requirements and goals. Below are some of the best tactics that can be used to radically reduce the Customer Acquisition Cost and up the Return on Investment.
- Build Trust – Prospective customers always remember and take into consideration how a business/ brand makes them feel even before having made any purchase. Personalizing the lead’s experience by being there for them even if they are not immediately making a purchase, the company builds trust and strong relationships, besides a good impression and reputation. Problem solving without trying to drive sales results in brand credibility.
- Word of Mouth Marketing – An evergreen technique, and yet so underrated, Word Of Mouth is a secret ingredient to a massive ROI. Majority of the time, people rely on the brands and companies recommended to them by their close friends and relatives. Similarly, people are likely to recommend their loved ones a brand that they consider effective and credible.
” We’ve grown to over half a million dollars without spending a single dollar on ads, referral credits, etc. People tell their friends about Eureka for free. ”
~ Tommy Fangs, Eureka.
- User Experience on the website – There is only so much a business / brand can do to optimize their ads, which is where the website user interface and engagement needs to be improved for smooth and seamless navigation. Providing value in terms of valuable information, blogs and articles play a significant role, incase of a product based company / brand, having multiple payment and delivery options, and not to miss – the customer support, chatbots for user assistance, easy order cancellations , and also customer reviews boost brand exposure and significantly reduce your customer
These above pointers are highly underrated but work wonders if the brand/ company pursues it, diligently.
Creative & Cost-Effective Marketing Strategies Can Be Leveraged –
” One way to lower CAC is to find budget-friendly effective marketing strategies. ”
~ Alexandra Zamolo, Beekeeper
There are several ways of gaining qualified leads without exhausting your marketing budget on ads. Let’s review a few ninja techniques to ace the ROI game by reducing Customer Acquisition Cost.
- Invest in Content Marketing – There is a reason why “ Content is King ”. It’s because nothing can benefit a business more than the content which includes creative blogs with valuable information, creative eye-catchy designs that drastically improve the user engagement metric. Who on earth doesn’t like colorful attractive content? Literally no one.
Blogs in the form of guest posts that are published on another website, behold the power of directing new and relevant visitors to your website, with little or no charges. Even publishing a blog / article twice a week can help you get qualified leads.
SEO experts also feel that the best way to attract high quality visitors to the website is by creating high quality content.
- Search Engine Optimization – SEO allows the website to capture relevant and organic visitors even before they learn about your brand.
- This is done by using some high volume search keywords that would be too costly for paid ad campaigns.
- SEO is a more reliable, sustainable source of organic traffic as compared to paid ads as it directs relevant visitors to the website even if you stop working on it for a while. However, the ads vanish the moment the ad budget is exhausted.
- Organic Link Building – Link building is one of the most crucial aspects of an effective SEO strategy. There are two parts to building links – Internal linking and External linking.
- The former is linking to the internal pages and blogs within the website, whereas, the latter is linking to external sources / other websites.
- Internal linking helps the visitor engaging with the content to navigate from one internal page within the website, to another. Whereas The external linking is done to show the user where the data or a quote by an important figure has been picked up from.
While entering an external link, the professional usually makes sure that the other website has a high DA (domain authority) and the link juice/ backlink they give in return is of high quality. This high quality backlink helps the original website to rank higher on the Google Search Engine Result Page.
- Social Media Optimization – Digital Marketing is not just about expensive paid ads. It is a way of growing your business digitally and smartly. One of the most important and obvious ways of doing that is by spending time, creating content for social media. You just have to –
- Make a business page on Instagram/ Facebook/ Snapchat/ LinkedIn/ Twitter and a YouTube channel.
- Study what your competitors are upto, the kind of content they create, their tone.
- And get creating, publishing and building your own community. Now go viral on social media without burning a hole in your pocket !!
- Email Marketing – Another superb way that offers the lowest customer acquisition costs and the highest returns on investment. This is because it enables direct communication with the community and hence you can easily customize and personalize the content scheduled to be sent to meet your community’s expectations.
The main catch here is for the marketer to be able to optimize the subject line ( which plays the main role in having the email opened by the leads), landing pages that have relevant and engaging content that compels the user to take the required action. Always consider running A/ B tests to experiment with different presentations of the same idea using marketing automations tools.
- Chatbots & Live Chats – Imagine the amount of ROI a brand could generate if they answered queries immediately, instead of making the website visitors wait for 24 – 42 hours. Consider that the number of competitors are enormous and the visitors always have options, the sooner a brand responds to a customer’s query, the better it is. Hence, Chatbots and live chats contribute immensely to reducing the customer acquisition costs.
Resolve the query and convert the visitor into a customer, right there and then.
In a nutshell, as mentioned above, a customer will always remember the kind of treatment they get, and how a brand made them feel. Hence, making their experience seamless and providing them with valuable information, is the key to reducing the customer acquisition costs and increasing the ROI. Having done this, be rest assured that they will opt for your brand over another.
ABOUT THE AUTHOR
Jody Ordioni is the author of “The Talent Brand.” In her role as Founder and Chief Brand Officer of Brandemix, she leads the firm in creating brand-aligned talent communications that connect employees to cultures, companies, and business goals. She engages with HR professionals and corporate teams on how to build and promote talent brands, and implement best-practice talent acquisition and engagement strategies across all media and platforms. She has been named a "recruitment thought leader to follow" and her mission is to integrate marketing, human resources, internal communications, and social media to foster a seamless brand experience through the employee lifecycle.
