We all hope to be able to acquire new customers on the fly with the lowest possible expense. Unfortunately, such optimism is rarely rewarded.https://socialmediaweek.org/blog/2021/02/how-to-gain-new-customers-and-reduce-the-cost-of-acquisition/?preview=true
The customer acquisition cost (CAC) has been (rightly) called the startup killer. New entrepreneurs often harbor unfounded optimism in whatever they offer. In doing so, they end up greatly underestimating how expensive it can be to acquire a customer.
Anyone who has done business knows that acquiring a new customer can cost seven times more than selling it to an existing one. And, depending on the industry, acquiring a new client can cost you between $7 and $395.
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Sounds daunting, right?
Indeed, acquiring customers is difficult. But the real devil here is in the details. Much of what we know here comes from statistics that average most of the results.
In other words, there are many companies that simply fail at customer acquisition. So, here are some ways you can reduce your CAC while increasing customer satisfaction.
Go through a customer onboarding process
Your sales and marketing may be misaligned. Your customer success team may end up downloading all the information about them at once. Or you may not have a repeatable process in the first place.
There are too many things that can go wrong with customer onboarding that can drive up your acquisition costs.
Building a improved customer onboarding workflow it will help you reduce customer acquisition costs and increase retention. Think about how you can help your customers get the most out of your product.
A good onboarding process should include:
- A simple account registration process.
- A concise but well-written welcome message.
- Reminder for customers who haven’t logged in for a while.
- A step-by-step guide to setting up your product.
- Educational materials to help customers leverage your product as effectively as possible.
- Milestones for each activity the customer completes in the onboarding process.
- Robust after-sales support.
YIf needed, you can also consider building custom solutions for clients. Your onboarding workflow should ensure that your client never has to sit back and wonder what to do next.
Don’t forget your email
In their quest to become social media stars, many brands end up ignoring email entirely. Big mistake. Unlike the clunky clutter of a social media feed, your inbox is deeply personal.
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Says Brian Greenberg, CEO of True blue life insurance, “The power of email is that it goes straight to the consumer’s inbox. Then stay there. Most people don’t delete things from their inbox, so if they need to open up a discussion you had together or they want to find your latest offer, all they need to do is search their inbox real quick. Some people contacted me at True Blue Life Insurance using a seven month old email.
Some ways you can use email for customer acquisition:
- Use the principle of reciprocity. Offer your potential customers something free in exchange for their email.
- Try cold emailing. A good cold email is a personal message and solves a problem.
- Send follow-up messages after the first ones.
- Don’t spam, though. Really, don’t.
The popularity of emails continues to grow, so consider adding them to your marketing arsenal. If you are short on time, you can use a service like Design way which offers tested and high converting email templates.
Sending gifts
Gifts have one advantage over other promotional methods: they create a deeper emotional connection. And customers with such a bond with a brand have a 306% higher LTV. than those who don’t.
Most marketers today are limited to electronic gift items. Redeemable coupons, gift cards, feature upgrades, etc. they are all popular gift items.
For example, EarlyBird, a new Fintech service to help parents invest in their children’s future adds $15 to every new account opened. This is a great strategy for new SaaS companies.
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That said, don’t write off the humble old direct mail gifts just yet. Nothing beats a direct mail gift item. They are memorable and are more visible than their digital peers.
Use chatbots
No page on your website can answer all of your prospect’s questions. And most of them don’t have time to find what they’re looking for anyway.
This is where Chatbots can really come in handy. Now, they can’t replace a human being and sometimes they loled us with their answers. But today, chatbots have come a long way.
They can answer more general questions and even direct users to desired resources. They also don’t take breaks and are there 24/7.
Their acceptance rate is also on the rise. For example, twice as many consumers were willing to interact with a chatbot in 2019 compared to 2018. Similarly, 74% of users actually prefer to use chatbots to find answers to simple questions.
They have also been used very successfully. Joy Organics uses a highly personalized chatbot that not only offers chat but contains links to frequently asked questions directly in the chat itself.
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Go local
Unfortunately, many companies mistakenly think that acquiring customers via the Internet means going big. After all, the world is their oyster.
But don’t forget your local market space, either. People in your immediate area can relate to your product better than those who live on the other side of the world.
Moreover, Local SEO is best suited to small businesses such as restaurants, dry cleaners, home repairs, etc.
Local SEO helps reduce customer acquisition costs in a few ways. First, having an office in a city helps your clients see your presence early. Secondly, you can build better relationships with the people you actually meet. Your local following can also help you build a better brand (think KFC).
Customer acquisition becomes difficult and costly when you are more interested in selling than helping customers. All of the above methods work best when used to convey as much benefit as possible.
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