When developing your business strategy, it’s important to plan out how you’re going to gain new customers in a cost-effective way. After all, you need to add to your existing customer base if you want your business to grow, and you need to do it within a budget!
Budgeting for customer acquisition costs (CAC) should be part of any business model. As found by Harvard Business Review, acquiring a new customer costs anywhere from five to twenty-five times more than retaining one. Therefore, it’s a good idea to try to reduce these costs.
Below are some of the main ways in which you can reduce the cost of acquiring new customers.
Define your target audience
If you’re unaware of who your customers are and who you should be targeting, it’s likely that you’re wasting a lot of time and money on your customer acquisition efforts. Knowing who is interested in your products or services and what they want is the first step you can take to lowering your CAC. By filtering out all of the people your business doesn’t appeal to, you can then focus on the people who actually want your products and are willing to buy from you.
A great way of doing this is to create a buyer persona of the ideal customer you’re targeting. To do this, you need to flesh out the smaller details of your buyers. If you have existing customers already, it’s a good idea to start with them by finding out their interests, age range, job title, etc. This can give you a good understanding of who your customers are and the type of person you should be targeting. On top of this, it’s important to make sure that you’re utilising the right social media platforms, producing the right kind of content and solving your customer’s problems. All of these things can help to lower CAC through better-targeted marketing campaigns.
Remarketing works by recognising people who have been on your website for a good amount of time but didn’t make a purchase. It then displays your ads to these people when they’re browsing other websites. This makes visitors want to come back after seeing your brand and products repeatedly, encouraging them to revisit your website and make a purchase.
This method helps to turn window shoppers into paying customers and increases conversions. This is all done in a cost-effective way since the people you target with remarketing already have a demonstrated interest in your products or services.
Implement A/B testing
When trying to reduce your CAC, it’s important to leave no stone unturned. You have to test different elements of your marketing campaign to figure out what works the best in terms of bringing in more leads, retaining your customers more effectively and increasing your conversions. A great way of doing this is through A/B testing.
When it comes to things you can test, the list is endless. Trying out variations of different colour schemes, wording, image placement, etc. are small changes that can work wonders for many companies. Sometimes it’s as easy as changing one word that makes all the difference and convinces a customer to buy from you.
Offering customer rewards
Customer rewards are also a really effective way of converting customers quicker and helping to minimise CAC. By offering an additional perk of choosing to shop with you over your competitors, you’re able to attract customers by offering exclusive rewards that aren’t available elsewhere.
There are so many different tactics out there that you can implement into your business strategy to reduce the cost of gaining new customers. It’s helpful to revise every step of your funnel so that you can see where costs could be lowered and optimised where needed.
PERX Rewards provides a suite of reward based marketing tools which are designed to increase your customer acquisition in a cost-effective way through offering your potential customers access to every-day savings. If you’re interested in finding out more about how PERX can benefit your business, contact us at firstname.lastname@example.org or call 01254 878 956.