There are dozens of marketing metrics you can evaluate to determine the effectiveness of your eCommerce marketing campaigns.

Among the most important is customer acquisition cost, or CAC for short.

Customer acquisition cost measures how much money you have to invest on average to acquire one customer. It’s perhaps the best way to measure how effective your marketing campaigns are and your overall marketing ROI. 

The lower your customer acquisition cost, the more customers you acquire for every dollar spent.

Now, customer acquisition cost differs across niches and products. It costs more marketing dollars to sell a customer on a $1,000 piece of furniture than a $3 coffee mug.

If you’re hoping to increase profitability, lowering your customer acquisition cost is an excellent market strategy to take. 

What You Will Learn

By bringing down your customer acquisition cost, you can reinvest your savings in other areas — or give yourself a larger paycheck.

By the end of this post, you’ll know seven ways to reduce customer acquisition costs and subsequently bolster your bottom line.

Prerequisites

What is CLV?

How to Do Customer Analysis

Review your market research (and conduct more)

The most important part of lowering your customer acquisition cost is to maximize the number of customers that convert. To do that, you have to know your customer base like the back of your hand.

Before undertaking any other methods of lowering customer acquisition costs, it’s a good idea to review your current market research, buyer personas, and other relevant matters.

Then, conduct new research through surveys, keyword research, browsing relevant online forums, interviewing potential customers, and so on.

Use your findings to update your buyer personas accordingly. Once you’ve done so, you can create compelling marketing campaigns that speak directly to your customer base’s desires, frustrations, and pain points.

Put up reviews and testimonials

Customers will naturally put more trust in what other customers say than in your marketing messages. Liberally applying testimonials to key areas of your store and marketing materials provides an evergreen marketing asset that converts customers for free.

Written testimonials and reviews are an excellent start. Many online store builders have widgets that help you automatically collect and display reviews.

However, video testimonials may work even better. In fact, 2 out of 3 customers say they’re more likely to buy from a company if they watch a video testimonial showing how a product helped someone out.

It makes sense: video testimonials allow your happy customers to convey their story and how the product helped them more effectively. Your prospective customers can hear their emotions and see their facial expressions.

Implement marketing automation

The more customer acquisition activities you can outsource to machines or software, the less money you will spend acquiring each customer. That’s what makes marketing automation such an effective way to lower customer acquisition costs.

One area ripe for automation is email marketing.

You can create automated email sequences for various actions your customers or prospects might take. These sequences act as 24/7 unpaid sales reps. Whether day or night, they’re making you sales for no more than the cost of the software.

For example, you can create a welcome sequence that introduces your brand, tells your brand’s story, and builds trust with your audience while selling them your products. 

You can sell even more with upsell and cross-sell autoresponders after a customer makes a purchase. Meanwhile, browse and cart abandonment sequences scoop up sales from customers who forget to purchase or turn away at the last minute.

Another area suited for marketing automation is customer support.

Put a little “Support” button on your web pages so customers can get help with ease. So you can reduce customer service and/or sales team burden.

For example, food supplements company Transparent Labs has a “Support” button in the bottom right corner of its site. Click it, and a search bar pops up that lets you browse for support topics.

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This Support box provides a Contact Us button if you can’t find your answer.

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You could even add automated conversational marketing tools, such as chatbots, to this support area.

A chatbot pops up on your website to answer customer questions and nudge them ever closer to buying. 

Chatbots are smart nowadays — you can get them to say different things depending on the page your user is on. If they’re on your home page, for example, you could have the chatbot ask a general question, like, “do you have any questions?”

But then, if your customer lands on a product page, your chatbot might recommend a complementary product to the customer — possibly increasing your average order value while driving down customer acquisition costs.

Create an affiliate program

Affiliate marketing is a form of marketing where you pay a publisher, such as a website or a blogger, a commission every time they refer a customer to you that buys.

Affiliate marketing is low-cost because you only pay when a customer buys. In other words, it’s performance-based. There is no need to worry about wasting dollars on a marketing campaign that doesn’t bring results.

All you have to do is create the compensation structure, find affiliates that are good fits for your program, and provide these affiliates the materials they need to sell (training, marketing materials, and content).

Quicksprout offers an excellent example of a high-quality affiliate partner. This article of theirs helps people find the best PEO providers.

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This form is placed within a Quicksprout article educating readers on PEO providers. Such content could convince the reader that they need a PEO company for their business. That would lead them to fill out the form and search for providers.

Quicksprout can send plenty of warm traffic — consumers close to the sale — to its many PEO provider partners using this method. These partners then get plenty of new customers at a low customer acquisition cost.

Get featured in sponsored content

Getting a large publication to feature your product in sponsored content immediately exposes you to a massive new audience.

You may have to pay a substantial fee to get your brand featured in major publications, but the traffic generated and customers gained would likely offset the cost. That stream of traffic would last for a long time on an authoritative website.

Say your store sells mattresses. Imagine if Newsweek featured one of your mattresses in this article about the best memory foam mattress.

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That could lead to an enormous surge in sales, then a nice stream of continual sales for months or even years after the article.

Given the large fee an outlet like Newsweek likely charges for a spot in a sponsored article, it’s wise to feature your best or most popular product, as long as it’s relevant to the article’s content.

Film product videos

As touched upon in our discussion of video testimonials, videos are a powerful, yet low-cost form of marketing.

About 84% of consumers are more set on buying a product after watching a brand’s video.

That’s because video helps show what your product looks like in action. Customers can see its size, dimensions, functionality, and uses.

This is especially helpful for complicated and expensive products with many moving parts, such as home gym equipment or even software.

Take a look at how Nlyte uses video to promote its DCIM software.

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Notice how Nlyte has a video on its homepage but also offers multiple areas where someone could click and schedule a demo. 

Plus, the News and Webinars menu contains more videos on Nlyte’s software and similar content.

Publish plenty of content

Not every site visitor is ready to buy the moment they land on your eCommerce store.

However, you can still draw these prospects in by producing helpful, engaging content.

Writing strong SEO-optimized content does a few things for you:

  • It ranks you high in the search engines, bringing you a steady stream of traffic — much of which is ready to buy.
  • It educates readers about your product and builds trust with them.
  • It keeps your brand at the top of your customer’s mind.

Observe in the image below how Track-POD produces a substantial amount of blog content on various topics, along with product news to promote its route planning software.

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This content helps Track-POD rank for a range of relevant keywords, builds authority in its audience’s eyes, and shows why Track-POD is the way to go for route planning software.

Nailing the SEO part of the content is key to making this work. It doesn’t matter how good your content is — if your customers can’t find you online, they won’t buy from you.

By strengthening your SEO through targeting relevant keywords and building internal and external links, you can land at the top of search results for keywords extremely relevant to what your customers are looking for. 

So, when you’re planning content, make sure you use an SEO tool like GrowthBar to find keywords and backlinking opportunities.

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More eCommerce customers at a cheaper price

There are many more creative ways to cut your store’s customer acquisition costs, but these are among the most effective.

No need to try implementing them all at once, though. Take things one step at a time to ensure what you’re doing is working. Once you notice a drop in customer acquisition costs, move on to the next method.

By following this approach, you can slowly and steadily increase your return on your eCommerce marketing investment.

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More Resources

The Ultimate Customer Value Optimization (CVO) Guide

Twelve Practical Strategies to Increase Your Customer Lifetime Value

How to Make Customers Buy Again

Guest Author Byline 

Dustin Howes owns an affiliate marketing agency that is dedicated to helping companies maximize their affiliate marketing efforts. Through group coaching and private consulting, Dustin teaches program managers how to recruit the right affiliates, optimize working hours, and how to take the growth of the program to the next level. Learn more affiliate marketing tips at dustinhowes.com.