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DataCaptive » Infographics » 10 Smart Ways To Reduce Customer Acquisition Cost For Real

10 Smart Ways To Reduce Customer Acquisition Cost For Real

Smart ways to reduce customer acquisition cost

Famous Blogger and Marketing Specialist Neil Patel states that it is nearly seven times more expensive to bring a new customer on board than to retain an existing one.

What is customer acquisition cost?

Customer acquisition cost is the cost that is incurred by the company to onboard a new customer. For a website or an app owner, it is important to keep Customer Acquisition Costs on the lower side to continue being relevant in the market and keep generating revenues.

Reduce customer acquisition formula

To put a lid on your increasing Customer Acquisition Cost, you need to know how to calculate it (Customer Acquisition Cost) first, and then based on the results you can take the necessary steps to reduce CAC as per your strategy. The following is the formula for the Customer Acquisition Cost of a business organization.


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10 strategies to cust down your customer acquisition cost

10 strategies to cut down on your customer acquisition costs

1. Focusing on appropriate users brings down overall customer acquisition costs

The better you define your target, the more chances you have to win and to reduce your overall Customer Acquisition Cost. Once you have defined your end-users accurately the next step you need to take is to create an ideal buyer persona of your customers. When buyer persona is in place, then all your future marketing endeavors can revolve around it.


Retargeting is the underlying phase of the targeting process. Say some app has a few users who frequently use them, but do not make any purchases as desired by you. Retargeting is designed especially to combat such a scenario. It is a process that looks to transform a visitor into a regular user.

2. Adopt personalization to decrease customer acquisition costs

Personalizing your emails can result in 26% more opened messages, while segmentation can yield 760% more revenue.


An online site made with keeping the target audience and brand’s voice will convert more.


Now that it is in your interest to increase the flow of traffic to your website, why not first focus on the current traffic you’re having and see what all are engaging them more? You can then customize your online content accordingly.


The other efficient way to improve your conversions is to retarget dormant users via established marketing collateral like email marketing. The key to persuade and convert them would be to analyze what made them interested in your products and what could be pitched to them to win their engagement again. You need to pay more attention to your email content, subject lines, CTA’s, and layouts. The CAC can minimize if you are able to resonate with your audience- the sooner the better.


Lead management is vital in a customer acquisition journey- know more on this


Fact: Email marketing gives the best returns on ROI with an estimated 4300% returns.

3. Marketing automation reduces errors & reduces CAC

Marketing automation is the future of various marketing efforts that you undertake as a marketer or as a company. Marketing Automation helps the organization improve lead generation, analysis of customers’ interests, the purpose of email marketing, and overall marketing report generation. It is because less human input is involved and has a higher rate of success than regular human effort.


Marketing Automation involves a one-time setup cost, and it is much cheaper than paying for a person regularly which locks down the spending capability of the company. With Marketing Automation, the process to acquire customers is faster and easier, and through this, you can reduce your overall Customer Acquisition cost.


Bill Gates says that, “When Automation is used, it will magnify the efficiency of the process. Automation when also applied to an inefficient operation will make it more efficient”.

4. Referrals from existing customers helps bring down CAC

A popular quote by Walt Disney goes like this “Do what you do so good that they bring their friends the next time they visit you.”


In order to acquire a new customer, a company has to spend 6-7 times more than retaining an existing customer.


The cost is not the only barrier here; the negative reviews left by the dissatisfied users on your website or social media sites also tend to put a dent in the reputation of your company. If that is the case, then the leads or prospects will not look to associate with your brand. In such a case, you’ll be pumping in money but will be struggling to stay afloat.


The Customer Acquisition cost lesson to learn from this situation is that you shouldn’t let the concerns of the existing customers go unanswered. A company needs to adopt a more mature approach, and focus more on building better customer experiences to strengthen customer relationships, rather than up-selling and cross-selling your products/services randomly.


Read on for an in-depth insight on email marketing in this eBook.

5. Implement Pareto principle & offer premium products/services

Italian Economist named Pareto formulated the Pareto Principle. The gist of the rule is that 20% of your efforts produce 80% of the results.


The 80-20 ratio certainly doesn’t apply to everything. If you have an app, then 20% of the users will drive 80% of the overall revenue of the company- it can be through in-app purchases, top-ups, and the like.


This method is ideal in reducing the Customer Acquisition cost as you can offer the product/service on a freemium basis which will bring down the costs of acquiring the users. It will also drive revenues to the company by prompting the users to make in-app purchases for increased benefits and such through the placement of well-written ads.

6. Content marketing too helps in reducing CAC

When you are a marketer, you will have come across the quote “Content is King”. The basic meaning of this quote, if you didn’t know, was it allowed marketers to generate leads by using content marketing and not by spending money.


To build your content that is relevant to the needs and interests of the end-users you can use long-tail keywords. You can also use keywords that adhere well to the buyers’ persona of your end-users. This strategy helps you build an organic and credible audience without shelling out money on ads. The more organic traffic, the better chances there are of increased brand awareness.

7. Define your USP clearly

USP is the acronym for Unique Selling Proposition, and it states how your product or service is different from similar brands, and why should people pay attention to it. If you launch your offering without actually specifying its uniqueness, then customers are most likely to ignore it.


They will be unaware of the benefits of associating with your brand. Therefore, giving clarity on what your brand stands for would avoid you from making multiple rounds to convince your leads and convert them to prospects. Thereby reducing your customer acquisition cost.

8. Capitalize on messaging app users to reduce customer acquisition costs

A recent report states that messaging apps worldwide have an average of 5 billion users and more than half of all people would prefer to contact a business via text than through phone or email.


Chatbots are AI-equipped tools that will help you capture leads and interact better with your users and acquire more customers for your product/service.

9. Better customer journey brings forth more conversations

The lesser entry barriers there are when the users are looking to avail of your services or buy your products the more likely will they convert into paying customers.


For an easier conversion process, the companies need to put in efforts to put forth a customer journey where there is a quick transition between the acquisition and the decision process is quick, seamless, and painless.


The quick transition process is indicated by quick response, self-service, and personalized tools that are all a part of the modern and sophisticated consumer buying process.


The faster the consumer buying process, the number of customers will flock towards your product/service, and thus you will have to spend very little in the way of consumer acquisition cost.

10. Increase ROI - Capitalize your social media expenditure

When you have a successful paid social media campaign that garnered lots of impressions, likes and effectively promoted brand and product discovery via social media platforms.


When you have such a campaign, more people will be made aware of the product/service that you’re offering and through the latest customer engagement tools which are equipped with AI so that the consumers can clarify all their doubts before going on to make any purchases via the application.

Final thoughts!

Estimating Customer Acquisition costs is necessary for every business owner. When you know your current Customer Acquisition cost, you can formulate efficient ways to reduce the price of new customers through the strategies mentioned above.


We have elaborated on lessening CAC in this infographic, but there is a lot more when it comes to exploring when it comes to marketing and sales.


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