Acquiring new leads and customers is one of the most demanding and expensive challenges for most companies, regardless of industry. In order to achieve this, companies need to use their marketing resources to reach new customers. Even if your current customers recommend you, leads don’t come on their own. Most of the time, you will have to invest in advertising, google ads or traditional media to convert leads into customers. This is where the customer acquisition cost (CAC) comes in handy.

Customer acquisition cost is the approximate investment or expenditure cost of getting a new customer. To put it another way, it’s all the advertising costs, tools that you pay for, and marketing and sales investment involved in converting a prospect into a customer that buys your product or service.

Reducing customer acquisition costs is an important mission for any business that wants to survive and grow within a given timeline. Having a low customer acquisition cost will help companies significantly increase their revenue. For example, if a company has its customer acquisition costs high and their customer’s lifetime value low, the company will be out of balance and not operating efficiently. That’s why the real challenge for businesses is finding the right balance.

Considering the importance of having a low customer acquisition cost, we highlighted four strategic ways to reduce the CAC:



1. Increasing efficiency through marketing automation

Using marketing automation will help you improve your lead generation process, email marketing, analysis and reporting, among others. You can also lower your customer acquisition cost by also using a customer relationship management (CRM). This will help you reduce staff costs, because fewer people are needed to handle these tasks.

Another good way to take advantage of marketing automation is promoting a free trial, ebook or lead magnet so you can capture prospects’ emails, and then using these emails in a lead nurture. Having those leads in your funnel gives you the opportunity to offer them true value, and, with a strong strategy, you can help convert those leads into customers.



2. Bring new customers with the recommendation of your current customers

Did you know that it costs between 5 and 25 times more to acquire new clients than it does to keep existing ones? When you lose customers your acquisition costs increase and your company might need to spend high amounts on new strategies to attract new customers.

In addition to incurring significant costs, those customers that left your company dissatisfied will act as detractors of your brand, which can seriously hurt your company’s reputation, especially if they share negative reviews. When that happens, new prospects will have little interest in getting to know more about your products or services. So, if you have detractors, it is important to handle them as well as possible to minimize the impact on your business. Otherwise, you will find yourself investing heavily to try to make your prospects and customers trust you.

That’s why taking care of your current customers is crucial to your growth and success. If you are able to convert your current customers into promoters, they will help you in promoting your business. Your ability to strengthen your relationship with them and offer enough value to keep them satisfied will make the difference between a high or low customer acquisition cost.



3. Retarget Customers

Retargeting is a helpful strategy for companies that want to convince prospects to reconsider the value they offer. It is also the perfect tactic for businesses to maintain presence in potential customer’s minds. Customers decide not to buy products or services from a company for different reasons, but sometimes, they just leave incomplete actions on websites, landing pages and applications. So doing the right retargeting campaign could encourage the prospect in the right direction to complete a purchase they may have forgotten about.

Retargeting is a beneficial strategy because it helps companies to build highly targeted campaigns to attract prospective attention. Also, among other strategies, retargeting can increase customer conversion rates.

If you are interested in building a retargeting campaign, you will need to know and research your prospect and gather as much data as you can. You need to know their demographic information, interests, behaviors, motivations, and more. With a detailed profile from your prospect, it will be easier to create a successful retargeting campaign and convince prospects to buy from you.



4. Improve your conversions with Google ads campaigns

One last strategy to reduce customer acquisition cost is building efficient and profitable Google ads campaigns that will help you convert more prospects into customers. In order to increase your conversion rates, you can include some of these tactics:

  • Create landing pages based on your prospect profile and include a call to action that appeals to your target customer and encourages them to take action.
  • Do A/B testing for your landing page and ad copy to maximize results.
  • Increase the chances of prospects clicking on your ads by creating themed Google Ads groups to choose the proper keywords for your target market.
  • Add negative keywords to optimize your Google Ads campaigns, so you can eliminate users who aren’t likely to convert.
  • Lastly, make sure your entire funnel is working well and optimize it to ensure the prospect will go through all the workflow flawlessly until you close the deal.


We hope these strategic ways to reduce customer acquisition cost are useful for your company. Do you have other strategies to lower the CAC? Please share them with us.

If you are interested in hiring an outbound agency with a team of experts focusing on your lead generation and business development processes, contact us and get a free business development health check!