7 Strategies to Keep Customer Acquisition Cost Minimum

7 Strategies to Keep Customer Acquisition Cost Minimum

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The cost of acquiring a customer is among the top worries for a business owner as it directly influences the operational budget. By saving on customer acquisition cost, you can allot a bigger part of your marketing budget in other key areas, which will eventually enable you to run your business profitably.

Certainly, one should try to keep this cost to a minimum; but in practice the task is quite challenging. However, there are some tried and tested ways that have helped businesses in keeping their customer acquisition cost (CAC) to a minimum. Surely, they can help you out as well. Below, I have also written brief case studies of a few businesses that applied these tactics to lower their CAC.

Let’s begin to know about them.

Ask for recommendations & reviews to acquire customers with minimum efforts

People don’t trust everything they see and hear. The secret is – people trust people, especially their business partners and close friends. So, asking your customers to recommend your products/services in their social circle is a good point to start to acquire new customers at minimum cost & effort.

Same goes for customer reviews. According to MarketingProfs, 67% of consumers read up to 6 reviews before finally trusting a product and making a purchase. So, by asking buyers to leave product reviews, the CAC can be dropped significantly.

adaigo-teas(Source – Adagio Teas)

Case Study – Adagio Teas: For Michael Cramer, selling tea online was a huge challenge. After rethinking the design strategy of his online store and putting a major focus on user reviews and “questions from community” section, he was able to increase profit margins substantially.

Also Read – Importance of product reviews in online shopping

Getting Most Out of Social Media Campaigns

Nearly 86% marketers use paid marketing to acquire more customers, but this result into an increase their CAC. Besides, it is also not assured that people who will come to your marketplace via a paid medium will end up buying a product. Paid marketing may not reap the expected results as social media content, which goes viral. With content gone viral, your brand can reach millions of social media users in a matter of hours.

World's Most Advanced Blenders _ Blendtec(Source – Blendtec)

Case Study – Blendtec: Back in 2006, the company’s owner, Tom Dickson, started a YouTube series “Will it blend?” and created various videos by blending unusual items like matchsticks in order to show off the power of Blendtec blenders. People loved it, which eventually skyrocketed company’s sales.

Also Read: Learn How to Manage Your Low Cost PPC Campaign?

Social media marketing service that converts

Improve Customer Services to Enlarge Loyal Customer base

Nothing speaks greater than a remarkable customer service. As the old saying goes, ‘all’s well that ends well’, people remember the last impression they get from a brand when making a purchase, and also share it with their friends and family.

Being good at customer service promotes word-of-mouth marketing, which eventually leads to a low marketing budget & lower CAC.

Our vision _ Sainsbury's(Source – Sainsbury’s)

Case Study – Sainsbury: In 2012, a 3-year-old girl saw a Sainsbury’s product called tiger bread. She wrote a letter to Sainsbury saying that the tiger bread actually resembled a giraffe.

To her amazement, a few days later, she received two letters from Sainsbury’s customer manager along with a gift card. The parents of that girl posted these letters on their blog and what followed was huge publicity for Sainsbury including press coverage in BBC. Source: BBC

Improve Conversion with Audience Re-targeting

According to AdRoll, only 2% visitors convert in to customers on their first visit to an online marketplace. There is no secret recipe to convert visitors into buyers. Paid advertising budget once spent remains spent unless you can track visitors.

This is where re-targeting comes in and helps businesses to get more out of their paid advertising efforts. By re-targeting customers, you can capture & nurture the unconverted leads. This in turn, will ensure that your conversion is far greater than the ‘default’ 2%.

MAZDA_ Design _ Innovation(Source – Mazda)

Case study – Mazda: To attract people near a specific Mazda dealership, the company used geo-targeting to display personalized ads for audience re-targeting. Nearly 53% people who saw personalized ads made an enquiry. This enabled Mazda to achieve 98% more value in car sales.

Recommended reading: Everything you need to know about location-based marketing technology

Know your audience first to make your campaigns more productive

Knowing your target audience is important to run a marketing campaign. By not being aware of who your target audience is, you may end up targeting a wider audience. However, such a campaign cannot reap desired results as most people may not be able connect with what campaign is offering them.

Evans Cycles _ UK Online Bike Shop(Source – Evans Cycles)

Case study – Evans Cycle: When Evan Cycles (currently one of UK’s largest cycle retailers) was trying to create brand awareness in its early days, the company lacked a clear view on who its target audience is.

After gathering information on target audience, Evans Cycle launched an online campaign and were able to connect with people on a personal level. Eventually, the campaign increased their sales with a rate of 80% year over year.

Also Read – 6 Keyword Research Mistakes That Kill Your SEO Efforts

Invest in affiliate marketing to minimize marketing budget

Affiliate marketing model has seen acceptance globally due to its role in the reduction of CAC. The biggest advantage of affiliate marketing is that you only have to pay commissions if a sale is made.

As stats tell us, the CAC using affiliate marketing would help close the deal at 25% – 30% of the cost spent on other mediums like paid advertising. The increasing competition makes affiliate marketing one of the best options to minimize CAC.

Amazon.com_ Online Shopping for Electronics(Source – Amazon)

Case Study – Amazon: The growth is evident from the case of Amazon that spent $5.3 billion on marketing in 2015. The marketing budget for enterprises of size of Amazon is usually higher than that, but the company was able to control it with the help of its affiliate program.

Maintain the balance between Acquisition and Retention

According to Invesp, the probability of selling to an existing customer is nearly 60% – 70%. However, not all businesses focus on customer retention. From a selling point of view, there should be an equal harmony between acquisition and retention as it is through the combination of these two, that one can lower the CAC.

According to a research, businesses that increased customer retention by 5% saw up to 95% rise in profit. Maintaining the balance between acquisition and retention will not only lower your CAC, but will also lower your marketing budget. It will help you scale up in a healthy way, compete with well-established competitors, and more.

Facing Tough Competition in Business? Try our Digital Marketing Service


Customer acquisition is a serious matter for businesses who want to see incremental sales year after year. The cost associated with it is an entirely different matter as there are strategies that can significantly reduce CAC.

The above-mentioned strategies have proven track record as showcased in the adjoining case studies. Marketplace owners should use these strategies to keep their CAC to a minimum while earning good returns.  

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