Cost per acquisition is one of the critical metrics when measuring the success of your marketing campaign. Every marketer aims to make more sales, but that alone does not define the success of your marketing effort. Your sales revenue must be higher than the cost per acquisition.
What is the cost per acquisition, you may ask? CPA is the amount spent or paid to acquire one paying customer. Therefore, the lower the cost per acquisition, the higher the success rate of your marketing plan.
So, how do you reduce cost per acquisition?
1. Know Which Audience to Prioritize
The secret to a successful marketing plan is ensuring that you direct your resources and effort to the right audience. Take your time to research the market, and identify your ideal customers. They are likely to be interested in your products based on their problems.
For instance, a user who has already subscribed to your mailing list is most likely interested in what you offer. They only need a little push to convert into real buyers.
On the other hand, people who have absolutely no idea about your existence may need more work and convincing to be actionable prospects.
Come up with a unique marketing strategy for each group. This way, you can focus more on the cold leads to take them through the sales funnel until they get to the final stage, that is, the purchase stage.
2. Customer Retargeting
Retargeting is an effective tactic for businesses that want to retain a strong presence in their potential customers. Just because your previous marketing strategy did not yield sales does not mean that you should give up on the targeted audience.
Some prospects may take incomplete actions on your sites. Perhaps, they visited your blog and even left positive comments, but they didn’t make a purchase. Such prospects only require a gentle nudge in the right direction to trigger them to make a purchase.
Retargeting aims to convince customers to go back over your products to realize the value they may add to their lives. If done right, the idea can generate a trademark search lift of 1046% in a month of exposure.
Furthermore, retargeting improve customer retention rates. But it takes proper data to gather as much data on your prospects as possible to help you create a successful retargeting plan. Understand the prospects’ behaviors, and what motivates them to purchase.
3. Invest in Customer Retention
The goal is to reduce the amount spent on attracting and converting prospects into real buyers. And there is no easier way to do so than by retaining as many existing customers as possible.
Research shows that repeat customers tend to spend more on a brand than new customers. The reason is, they already trust the products or services offered by the particular brand and are assured of getting the value of their money back.
Moreover, convincing existing customers of your products’ value is easier than doing the same to new customers. Therefore, you will spend less time, money, and resources to make repeated sales.
Take advantage of customer feedback, customer education, and loyalty programs to increase retention. Most importantly, pay attention to the churn rate and strive to reduce it.
Note that an increased churn rate is among the reasons for a high CPA. This is because it costs up to five times more to acquire a new customer compared to retaining a new one.
4. Increase Your Mailing List
Email marketing never goes out of style. It has proven to be one of the most affordable yet super affordable marketing techniques. With the right approach, you are assured of consistent results without extra effort.
It will help to include this marketing method along with other marketing campaigns. You can increase your list by collecting website visitors’ contact information, including their email addresses. Then work on crafting valuable content for your subscribers.
You can rest assured of getting quality leads from your emails, and you don’t have to spend much on your marketing budget.
5. Reduce Cart Abandonment Rate
The easiest way to reduce CPA is to ensure that all prospects make it to the end of the sales funnel. Unfortunately, some site visitors add items to their cart but leave without purchasing. This only adds to the cost of convincing them to go back and complete their purchases.
Such customers have already expressed their interest in their products, but something made them change their minds along the way. Statistics show that about 79.17% of shoppers leave commercial sites after adding items to the basket, which can be frustrating to retailers.
How do you reduce cart abandonment rates?
- Include a clear and triggering call to action
- Include delivery options
- Offer seamless checkout experience
- Be clear on the total costs
- Remind prospects about the items left on the carts
You may also create a lead nurturing campaign, whereby you offer freebies and promotions to those who abandon their carts. This will encourage them to complete their purchases, thus reducing CPA.
6. Optimize the Functionality of Your Website
Ensure that everything on your lead flows works properly. Confirm that there are no broken links and checkout pages.
It would help to invest time in auditing, reviewing, and testing your site. Fix any potential problems that could be a turn-off to prospects and prevent them from making purchases.
Most importantly, work on the landing pages. Pay close attention to the page loading speed, quality of content, and effectiveness of the call to action button.
The landing page is liable for most conversions. Thus, optimizing it is the easiest way to convince visitors to convert.
Avoid spamming the landing page with content and instead highlight your products and their benefits. Only include relevant and easy-to-skim content. Otherwise, visitors are less likely to go past the landing page.
Make Your Business More Profitable By Reducing Cost Per Acquisition
Posting impressive sales statistics does not entirely make a company successful. You must seek ways to minimize the overhead costs to be profitable.
Learning how to lower CPA is your first step towards high profitability. Reducing your cost per acquisition positively impacts your revenue by increasing returns per purchase.
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