Without customers, there’s no commerce. However, there’s a cost associated with attracting new customers; you need to spend on marketing and sales to create brand awareness and inspire purchases. This ecommerce metric is known as your customer acquisition cost (CAC). Most businesses want to keep customer acquisition costs fairly low because every dollar spent on CAC is a dollar shaved off your profits.
By examining your customer acquisition cost, you can better understand the value generated by your marketing efforts and gain insight into your advertising strategies. Knowing your CAC will help you fine-tune your marketing, effectively budget, and build out campaigns with a higher likelihood of success.
Is your customer acquisition cost higher than you want it to be? This could indicate improper targeting, a marketing journey that’s either too complicated or too simple, or even a lack of automation causing your efforts to rely too much on human to human interaction (which is more expensive). Lowering your CAC usually starts with better targeting, more refined customer segmentation, and the creation of a well crafted marketing journey. This can all be done with the help of robust customer relationship management (CRM) technology.
A CRM platform can take what you know about your current customers and use it to attract new ones. A CRM also has the ability to incorporate automation and AI to help you create marketing materials and journeys (at scale) that are more personal and thus more likely to resonate with potential customers. This has never been more important: Today, a whopping 73% of customers expect companies to understand their unique needs and expectations, and 56% expect offers to always be personalized. Automated, personalized marketing is key to lowering your customer acquisition costs.