October 11, 2022
The growth and sustainability of the business depends on your success in attracting new customers.
The Cost Per Acquisition (CPA) metric shows the average amount spent per paying customer. Keeping CPA as low as possible for companies with a low budget should be a must, as alternatively, it could be the deciding factor of its success — save where you can!
Here are steps you should look out for in order for you to optimize your startup's customer acquisition costs:
Watch Your Customer Acquisition Costs
Here is a quick way to calculate your cost per acquisition
Divide the total cost of marketing by the total number of customers. For example: Let’s say you spent $5000 on marketing strategies for you to reach and acquire 200 fresh customers. 5000 divided by 200 translates to your acquisition cost (the amount you spend on each customer) which would be $25.
To better monitor your customer acquisition costs, you should also measure:
Customer Life Expectancy - It is measured by dividing the total lifespan of each customer by the number of customers.
Customer Lifetime Value - This shows how much money each customer has spent on your business over their lifetime. Calculate by multiplying the life expectancy by the value.
Average Purchase Amount - This shows the average purchase amount of customers. It is calculated by dividing total sales by the number of purchases.
Boost User Value
Providing value to users means that your business must create something useful, engaging, and highly desired by your customers.
This can be anything from enhancing new features or adding new products that customers have expressed interest in, to implementing enhancements to existing services for better positioning.
Customer satisfaction is always accompanied by high retention rates.
Create Relevant Content To Attract High-Value Leads
Today's prospects and customers want their content to be highly relevant and personal to them.
This is an important consideration for all sales and marketing efforts trying to minimize cost per acquisition.
The more leads you need to convert to customers, the higher the cost of customer acquisition. By offering non targeted content, you risk attracting low-quality leads that quickly drop out of the conversion funnel. However, even if your content is well targeted, you also need to consider SEO link building strategies that will help improve the metrics of your content and attract relevant leads in the long run.
To attract qualified prospects and quality leads, collect customer data through subscription forms, surveys, surveys, online quizzes, and social listening to create detailed buyer personas. They can use demographic and psychological data to segment audiences, develop personas, and offer different content based on interests, vulnerabilities, location, education, and other data.
Nurture Leads And Automate Marketing Processes
Email drops, lead nurturing, and other marketing automation techniques can be effective in reducing customer acquisition costs.
Examples of marketing automation include promoting white papers, distributing free trials via paid media campaigns, and using purchased emails in lead nurturing sessions.
Prospects are at a certain stage in their funnel and expect you to provide value. Lead nurturing workflows help convert leads into customers.
Create A Conversion Rate Optimization Strategy
A well-defined conversion rate optimization (CRO) strategy is required to gradually convert prospects and leads into customers.
Here is how you can do it
Demonstrating Social Proof - Social proof becomes an integral part of the CRO strategy as customers rely on reviews online to make purchasing decisions. To achieve this, you can:
Make your website easy to navigate
Visitors get frustrated when your website navigation is overly complicated and unintuitive. To avoid this potential problem:
Prove website security
This is an important point for companies that ask users to provide confidential information. Especially in the e-commerce business, cybersecurity concerns have become prominent in the face of online security threats. Before customers buy from you or leave sensitive personal information, they want to know if it's safe to do so. You should provide them with proof of your SSL certificate to ease their concerns. Displaying trust signals is also an idea.
Check out your landing page
Create multiple variations of your landing page to get leads and run A/B tests to see which works best.
These tests can have a big impact on your conversion rate, which impacts your customer acquisition costs. By looking at analytics metrics like bounce rate and time on the page, you can make informed decisions about changing elements like button colors and CTA text.
In short, best practices that require the A/B test should be run for 2-4 weeks to get statistically meaningful data.
Turn customers into brand ambassadors
Only by turning acquired customers into brand ambassadors can companies fully leverage their digital marketing capabilities.
Increasing brand loyalty from existing customers is the other half of the CPA optimization battle. Retaining customers can take a lot of time and effort, but the results are worth it. Retaining customers costs him five times less than acquiring new ones.
By building a community of brand advocates, you can get a lot of free word-of-mouth marketing for her. This further strengthens your brand's authority, increases sales, and increases your return on investment.
To turn your customers into loyal brand ambassadors, you can:
A marketing specialist that focuses on driving business through digital, visual and content marketing techniques, currently based in Los Angeles. I am looking to make new connections and share ideas together!
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