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Updated on
Jul 9, 202410 min read

Top 7 tricks to reduce customer acquisition cost (CAC)

Updated onJul 9, 202410 min read
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    Table of Contents

  • What is customer acquisition?
  • What is Customer Acquisition Cost?
  • How to Calculate Customer Acquisition Cost
  • arrow
  • Top 7 tricks to reduce customer acquisition cost with case studies!
  • Conclusion
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Acquiring new leads every day is a challenging task for any business. Companies use their best resources to reach new consumers. Some firms also invest vast amounts of capital in different marketing strategies for lead generation. But you won't find positive results always. Although it is good to have marketing plans, it is even better to have tricks to reduce customer acquisition costs.

Customer acquisition cost is an indicator of your marketing success. It goes by the marketing formula of lowering the customer acquisition cost (CAC) is more the number of customers. It also gives an additional return on investment (ROI). In simple words, when CAC is high, customer values go down. Thus, the business isn't optimally operating. When customer acquisition is reduced, a company can increase its revenue.

Reducing customer acquisition costs is one of the best marketing strategies out there. Many reputed brands have been doing that for years now. If you want to know, continue reading this post about the top 7 tricks to reduce customer acquisition costs with case studies.

What is customer acquisition?

Customer acquisition implies what it sounds like—getting new, paying clients for your company. It does not, however, only apply to clicking "buy" or concluding a transaction. It includes the entire process leading from a prospect to a paying client.

There may be few stops along the road and a short journey for specific organizations (especially e-commerce). For those with longer sales cycles, it can take weeks, months, or even years.

Whatever the case, a customer acquisition strategy seeks to make every stage of the client acquisition process as simple as possible, giving you the greatest conversion rates.

One of the most challenging work for any marketer is figuring out and comprehending their company's funnel, especially when they lack the data to back up their choices. 

What is Customer Acquisition Cost?

 Client acquisition costs (CAC) denote the entire expense necessary to acquire a new customer. This cost will consider marketing or salesperson wages, the sums spent on advertising and social media methods, and marketing initiatives. Take the entire cost of the resources mentioned above and divide it by the overall number of consumers obtained to get your customer acquisition expenses.

How to Calculate Customer Acquisition Cost

The average cost per newly acquired user over time is known as CAC. This formula's "primitive" form is as follows:

CAC = total cost of marketing/ number of new customers

But if we delve further, the total cost covers all marketing expenditures. It includes the compensation of your sales staff and any additional outreach or effort you're making to bring in new users.

Let's use an illustration. Your cost per acquisition (CAC) as an app owner is $10 if you invest $1000 in acquiring 100 new customers in a given month.

Top 7 tricks to reduce customer acquisition cost with case studies!

Trick 1: Know your audience for productive campaigns

Running a marketing campaign requires understanding your target market. You risk targeting a larger audience if you are unaware of who your target audience is. Such a campaign, however, cannot produce the desired outcomes since most people might not be able to relate to what the campaign is presenting.

Case Study 

In its early years, Evan Cycles, now one of the biggest bike stores in the UK, struggled to build brand awareness. It was due to a lack of a clear understanding of its target market.

Evans Cycle started an internet campaign after learning more about its target market and successfully established a personal connection. In the end, the campaign raised sales at a rate of 80% on an annual basis.

Trick 2: Re-target Customers

Retargeting is among the simplest methods for getting visitors back into the sales funnel and achieving the best CAC (called remarketing in the Google Ads platform). You may use Facebook Ads or the Google Ads display network. By combining the two channels, you can contact your audience at every stage of the sales process, improving their chances of converting.

Remarketing lists for search advertising are available through Google Ads (RLSAs). Retargeting can be an economical technique to acquire new clients at a fair CAC if you don't have a significant budget for running intent-based advertisements.

Case Study

The business employed geo-targeting to provide tailored advertising for audience re-targeting to draw customers to a Mazda dealership in the area. People who saw tailored advertising inquired in nearly 53% of cases. As a result, Mazda was able to sell cars for 98% more money.

Trick 3: Improve Customer Retention

Customers who regularly purchase your goods are likely to spend more than brand-new customers. In the third year of their business relationship, repeat clients typically spend 67 percent more than they did in the first two. It is simpler to persuade returning consumers of the value a business provides than to convince new customers who have not previously dealt with the company.

Businesses may reduce customer acquisition expenses by improving their return customer rate, purchase frequency, and average order values. Use tactics include customer education programs, loyalty programs, and loops for consumer feedback. Additionally, keep a close eye on your turnover rates.

Case Study 

According to Forbes, acquiring new customers is five times more expensive than keeping existing ones. Additionally, modest improvements in client retention can result in profit gains of 25% to 95%. A company's revenue and acquisition expenses significantly improve by minimizing churn and raising client retention. By adding value, you can keep customers pleased and begging for more. 

Suggested Reading:

10 Best Ways to Improve Customer Experience through Chatbot 

Trick 4: Invest in affiliate marketing

Due to its role in lowering CAC, the affiliate marketing strategy has gained appeal on a worldwide scale. The main benefit of affiliate marketing is that commissions are only due when a transaction is made.

According to statistics, affiliate marketing would aid in closing the purchase at a cost between 25% and 30% of other methods, such as paid advertising. Affiliate marketing is an easy way to reduce CAC, given the rising level of competition.

Case Study 

Amazon's $5.3 billion in marketing expenditures in 2015 is an example of the rise. Marketing expenditure for businesses like Amazon is often more significant than that. Still, the firm could keep it under control with the aid of its affiliate network.

Trick 5: A/B Test and Optimize Your Pages

Marketing professionals must A/B test various elements of their landing pages. Customers with a better user experience (UX) on your website are more likely to be satisfied. Since improved UX design may lead to greater customer happiness, it indirectly increases sales.

A/B testing aids a business in learning what its customers desire. A/B testing of product names, forms, buttons, layouts, and other elements is one method of landing page optimization. Businesses can use A/B testing to examine the potential effects of slight modifications on their website's click-through rates. 

The online experience has been a topic of discussion regularly for years. The crucial responsibilities your website plays in turning prospects into customers have been covered in books, articles, videos, and webinars.

First, your advertisement and landing page must be entirely consistent with one another (learn more in our landing page tips). The language and visuals should convey the same idea and consistently appear and feel.

These two elements shouldn't conflict with one another. The advertisement and the page users are being sent to should line up precisely. One of the simplest strategies to boost conversion rates and cut client acquisition costs is to do this.

Case Study 

Avoid making significant modifications that affect the user experience when executing changes on the corporate website. eBay once learned that making effective website modifications might result in unhappy consumers. Considering how your A/B testing findings will result in greater job completion rates is crucial. A business may see more excellent conversion rates if more consumers complete tasks. 

Trick 6: Implement marketing automation

The more client acquisition tasks you can automate using software or machines, the less money you'll spend on each new customer. It is why marketing automation is such a powerful tool for reducing customer acquisition expenses.

You may design automatic email sequences to respond to different activities that your clients' prospects or clients might take. These patterns work as 24/7 unpaid sales representatives. They are generating sales for you for the price of the program, day or night.

For instance, design a welcome sequence that introduces your company shares your company's origin story, and fosters audience trust while promoting your products. 

After a consumer buys your product, you may increase sales by upselling and cross-sell autoresponders. Customers who forget to purchase or leave at the last minute are snatched up by browse and cart abandonment sequences.

Customer assistance is another industry that benefits from marketing automation. Add a little "Support" button to your website so that users may quickly receive assistance. Help lessen the workload on your sales team and customer care staff.

Case Study 

This Case Study, which Ferranti and Cohen co-presented at NEMOA, describes how Dylan's careful application of BuyerGenomics was a success. It was a unique mix of cloud computing, machine learning, and predictive marketing. It resulted in gaining high-value consumers successfully. The outcomes were among Dylan's "sweetest" accomplishments yet.

Trick 7: Improve the Sales Funnel

A corporation may manage a customer's purchasing process more effectively with a sales funnel. The funnel is how a business moves lead into paying clients. Sales funnels are crucial when attempting to lower the cost of client acquisition. A strong sales funnel delivers a wealth of data. It offers the business insight into the perspectives of its potential clients.

It is possible to comprehend why clients decide against making a purchase. Companies may identify any failing sales funnel phases using data analytics technologies. A SaaS business could supply the market with a top-notch subscription solution. An optimized sales funnel may assist that business in increasing sales by identifying critical areas for improvement.

Case Study 

A business named Sysomos is an excellent illustration of this (recently acquired by Marketwire). Sysomos offers a SaaS service to assist companies in keeping an eye on online discussions that might impact their brand. The service's main component is a network of crawlers that input information into a sizable, growing database. Sysomos searches for intriguing insights on any hot issue using their data and then publishes blog entries. They have discussed issues such as Facebook usage, the oil disaster, social media, the Iranian election, and Twitter usage. These blog articles frequently receive attention from other bloggers and major media outlets like The New York Times because of the popularity of the subjects they examine. The number of visitors to Sysomos' main website, which they convert to free trials and eventually close clients, has significantly increased due to these published articles and blog posts.


Customer acquisition is the platform where every business looks to tone down the cost while making more revenues. As you saw above, you can save money and time in your business with low customer acquisition costs. A firm can post a high number of sales and statistics. Still, the customer acquisition cost is the metric to keep in check as it helps recognize the balance between customer lifetime value and acquisition. CAC helps you to acquire customers with the cheapest and most effective method. If you want to reduce your company's CAC, try the abovementioned tricks.

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Table of Contents

  • What is customer acquisition?
  • What is Customer Acquisition Cost?
  • How to Calculate Customer Acquisition Cost
  • arrow
  • Top 7 tricks to reduce customer acquisition cost with case studies!
  • Conclusion