With the reduction in the amount spent on customer acquisition, your business revenues will be boosted. In this discussion, we shall point discuss how you can successfully determine customer acquisition costs and how effectively can you minimize them with the aid of digital marketing. But first, let us understand Customer Acquisition Cost is the crucial Metric.
What Makes Customer Acquisition Cost As the Crucial Metric?
Customer Acquisition Cost indicates the cost of converting a prospect to a potential customer through persuasion to make their very first purchase. This metric deserves importance in particular since business growth depends on cost reduction to gain new customers.
Since it is known to all the business owners, when they are selling to new customers, then their success rates vary between 10% to 30%. Alternatively, selling to the repeating customers incurs higher success rates of 70% to 80%.
The Customer Acquisition Costs is equally important to the investors, especially the early-stage investors making use of Customer Acquisition Costs for evaluating scalability and startups’ profitability. Most customers get it done through a comparison of the difference between the money to be extracted from the customers and the costs to extract the amount.
When the investors determine the Customer Acquisition Costs of the company are indeed sustainable, they are more interested in giving the particular company additional resources needed for growth. So, the company can be using improved profit margins for creating a lot of value for both the existing and new customers so that their position in the market improves.
The marketing team of a company even needs to calculate the Customer Acquisition Costs for optimization of advertising ROI.
How Can Customer Acquisition Costs Be Reduced With the Help of Digital Marketing?
Now that we have come to the core of our discussion, we shall highlight how digital marketing is fruitful in reducing customer acquisition costs.
1 – Defining the Ideal Customers and Targeting Them
The existing customers can be used as the basis to get the ideal buyer persona. Consider their age, background, interests, beliefs, occupations, and social media habits.
2 – Using Re-targeting
The tabs must be kept on-site visitors browsing the listings but not making any purchases. When they are visiting the other sites, then they must be shown the ads. As a result, it helps them to memorize your products and service. Persuading them to come back and make a purchase becomes easier.
3 – Using Split Testing
Through split testing, the marketers can pinpoint the kind of images, designs, copies, and headlines that are performing better with regards to acquiring leads, client retention, and even increasing the overall conversions. By improving these areas and tracking the conversions for data helps in minimizing Customer Acquisition Costs.
It is possible to do split testing on any aspect of the prevailing marketing campaign, which includes –
a – Landing Page
Two landing pages must be tested with subtle and obvious differences which include individual elements such as color, images, and fonts. Also, minor tweaks are likely to impact buyer behaviors.
b – Call–to–Action (CTA)
Belonging to the crucial part of the sales funnel, through the Call–to–Action, the customers can know the ways to take the next steps. The CTA could be a sale, downloading, account registration, and free trial. Split testing the CTA by getting done changes to various elements like font, size, wordings, and colors for checking out which are indeed working best.
c – Web Designing and Website Navigation
The images, color schemes, and images must be tested on different site pages for checking the ones the site visitors are likely to click through at large. The page order can also be experimented with along with the page titles for finding out the versions converting the best.
d – Instructions
The instructions and subscriptions can even be split tested while creating product tutorials and videos.
e- Investing in Paid Searches
By means of the paid media and PPC Ads, you can directly reach the search results’ top, and put your brand before your potential buyers. Through paid searches, you can even test the different kinds of keywords and messaging and add extensions such as callouts, offers, business phone numbers, and links for the new customers to reach out to your brand with ease.
f – Ramping Up Email Marketing
Email marketing helps in increasing the possibility to nurture and convert qualified leads. The marketers make it work for themselves when they tap to transnational emails, optimizing for mobile, using automation, and personalizing direct communications.
g- Providing Incentives
By offering discount rewards points, limited offers, free shipping, and more such incentives – new customers can be gained. In particular, a strong loyalty program and customer rewards help in creating user-generated campaigns which comprise social media posts, guest blog posts as well as customer testimonials. This is a lot beneficial as the social media users use long hours of user-generated content on a daily basis with the user-generated campaigns on social media that is more effective by 30% compared to regular ads.
h – Not Neglecting the Existing Customer Base
At the time of focusing on the new customer acquiring, the existing customer base should not be forgotten. The returning customers are a great source for lowering Customer Acquisition Costs and sustaining the business growth – they do it by providing positive referrals to family, acquaintances, and friends. By keeping the existing customers happy and having the inventory readily available, each touch-point can be made memorable while positive experiences can be created. By using the customer success metrics can be much helpful in keeping a track of the existing customers as well as their activities.
Through digital marketing, marketers can well reduce their Customer Acquisition Costs, and gain new customers at the same time. If you are among the dedicated digital marketer and want to increase your revenues, then it is a must for you to follow the Customer Acquisition Costs metrics and the associated rules for reducing it.