We all hope that we can get new customers on the fly with as little spend as possible. 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
Customer Acquisition Cost (CAC) has been (rightly) called the startup killer. New entrepreneurs often have an unfounded optimism in whatever they’re offering. In doing so, they end up greatly underestimating how expensive getting a customer can be.
Those that have been in business know that acquiring a new customer can cost seven times more than selling to an existing one. And, depending on the industry, it can cost you between $7 to $395 to get a new client.
Sounds discouraging, right?
Indeed, customer acquisition is hard. But, the real devil’s in the details here. Much of what we know here comes from statistics that average out much of the results.
In other words, there are plenty of companies that are just doing customer acquisition wrong. So, here are a few ways you can decrease your CAC while increasing client satisfaction.
Follow a Customer Onboarding Process
Your sales and marketing might be misaligned. Your customer success team might end up dumping all the info on them at once. Or, you may not have a repeatable process in the first place.
There’s just too much that can go wrong with client onboarding which can drive up your acquisition cost.
Building a better customer onboarding workflow will help you reduce customer acquisition costs and increase retention. Think of how you can help your customers get the best out of your product.
A good onboarding process should include —
- An easy account registration process.
- A succinct, but well written welcome message.
- Reminders for clients who haven’t logged in a while.
- A step-by-step guide to product setup.
- Educational material to help clients leverage your product as effectively as possible.
- Milestones for each task completed by the client in the onboarding process.
- Robust after-sales support.
You can even consider creating customized solutions for clients if need be. Your onboarding workflow should make sure your client never has to sit and wonder what to do next.
Don’t Forget Email
In their quest to become social media stars, many brands end up ignoring email to no end. Big mistake. Unlike the clunky clutter of a social media feed, the inbox is deeply personal.
Says Brian Greenberg, CEO of True Blue Life Insurance, “The power of email is that it goes directly into a consumer’s inbox. Then it stays there. Most people don’t delete things out of their inbox, so if they need to pull up a thread you’ve had together or want to find your latest offer, all they have to do is search their inbox real quick. I’ve had people contact me at True Blue Life Insurance using a seven-month-old email.”
Some ways you can use email for customer acquisition —
- Use the reciprocity principle. Offer your prospects something free in return for their email.
- Try cold emailing. A good cold email is a personal message and solves a problem.
- Send follow-up messages after your first ones.
- Don’t spam, though. Really, don’t.
The popularity of email continues to grow, so, consider adding them to your marketing arsenal. If you’re strapped for time, then you can use a service like Designmodo that offers tested, high converting email templates.
Gifts have an advantage over other promotional methods — they forge a deeper emotional connection. And customers with such a connection with a brand have a 306% higher LTV than those that don’t.
Most marketers today stick to electronic gift items. Redeemable coupons, gift cards, feature upgrades, etc are all popular giftable items.
For example, EarlyBird, a new Fintech service for helping parents invest in their children’s future adds $15 to every new account opened. This is a great strategy for new SaaS companies.
That said, don’t write-off the humble old direct mail gifts just yet. Nothing can quite beat a direct mail gift item. They’re memorable and are more visible than their digital peers.
No one page on your website can answer all of your prospect’s questions. And, most of them don’t have the time to find what they are looking for anyway.
This is where Chatbots can really come in handy. Now, they can’t replace a human and have had us lol with their answers at times. But, chatbots have come a long way today.
They can answer most general questions and can even direct users to desired resources. They also don’t take breaks and are present 24/7.
Their acceptance rate is also climbing. For example, twice as many consumers were willing to engage with a chatbot in 2019 than in 2018. Likewise, 74% of users actually prefer to use chatbots to find answers to simple questions.
They have also been used very successfully. JoyOrganics uses a highly customized chatbot that not only offers chat but has links to FAQs right in the chatbox itself.
Unfortunately, many companies mistakenly think customer acquisition through the internet is all about going big. The world’s their oyster, after all.
But, don’t forget about your local market space either. The people in your immediate vicinity can relate to your product better than those living half a world away.
Besides, local SEO is better suited to small businesses such as restaurants, dry cleaners, home repair, etc.
Local SEO helps slash your customer acquisition costs in a few ways. Firstly, having an office in a city helps your clients see your presence upfront. Secondly, you can forge better relationships with people you actually meet. Your local following can also help you build a better brand (think KFC).
Customer acquisition gets hard and expensive when you’re more concerned with the sale than with helping customers. All the methods described above work best when used to forward as much benefit as possible.
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