8 Simple Ways to Reduce Customer Acquisition Costs

  • 5 min read

It is always a challenge for a company to acquire new leads and customers. Companies use their resources to reach new customers every day. To know the success level of marketing strategies and campaigns, we need to look at customer acquisition costs.

It is in a company’s best interests to lower customer acquisition costs. When customer acquisition costs are high but the customer’s lifetime value is low, the company is not operating optimally. By reducing customer acquisition costs, a company can significantly increase its revenue. The real challenge lies in striking the right balance.

The customer acquisition costs for different companies will differ depending on the prices of products and services offered. It may cost more to acquire corporate customers for a call forwarding service than to get individual customers. Customers require different levels of convincing, and their lifetime values will vary, creating the need to discover new ways to reduce customer acquisition costs for your business.

What is Customer Acquisition Cost?

Customer acquisition costs (CAC) refer to the approximate total cost required to get a new customer. This cost will consider the salaries of marketers or salespeople, the amount spent on marketing campaigns and social media strategies, and advertising costs. To identify your customer acquisition costs, take the sum cost of the mentioned resources and divide it by the total number of customers acquired. 

Find out your customer acquisition costs with this formula:cutomer_adqusition_cost

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How to Reduce Customer Acquisition Costs

Many companies offer valuable products and services to the public. A lot of time goes to conducting market research, product placement, and other strategies made for sales success. 

Those strategies add to your customer acquisition costs. Below is a list of simple ways to reduce your customer acquisition costs and continue making sales.

1. Prioritize Appropriate Audiences

It is important to use marketing strategies and resources for the right audiences. Outline the target audiences that want your products and services. After this, it will be easier to engage with them on the best terms. A user that has already signed up on your company’s membership site may not benefit from content targeted at new website visitors. 


In today’s digital spaces, customers look to brands to provide them with unique, personalized content and interactions. It is a challenge to offer customers the right information and content in ways they want or expect. Companies can define their ideal customers before targeting them. Use tactics like buyer personas to give clear targets that will benefit new customers. 



2. Retarget Customers

Retargeting is a helpful tactic for companies that want to maintain a presence in front of potential customers. Customers often leave incomplete actions on websites and applications. Customers choose not to buy from a company for many reasons. Sometimes, a gentle nudge in the right direction can encourage the customer to complete a purchase they may have left behind.

Retargeting is a way for companies to convince customers to reconsider the value they offer. The customers that come to a company website and stay are interested in the products on offer. Retargeting can generate a trademark search lift of up to 1,046% within four weeks of exposure. Retargeting, among other strategies, can effectively improve customer conversion rates.

Retargeting is a beneficial strategy because it helps companies generate highly targeted campaigns for prospective customers. To successfully retarget your leads, gather as much data on your customers as possible. You need to know their behaviors, preferences, motivations, and more. With this information, it will be easier to retarget prospects and convince them to buy from you.

3. Improve Customer Retention

Customers that happily invest in your products tend to spend more on a product than new customers. On average, repeat customers spend 67% more in the third year of their relationship with a company than they do at prior stages. It is easier to convince existing customers of the value a company offers, than to convince new customers who have not yet interacted with the company.

Companies can lower their customer acquisition costs by increasing their repeat customer rate, purchase frequencies, and average order values. Utilize strategies like customer feedback loops, add loyalty programs, and add customer education programs. On top of this, keep a watchful eye on your churn rates.

Forbes noted that it costs five times more to acquire a new customer than it does to retain current ones. What’s more, Small increases in customer retention can lead to 25%-95% increases in profit. Increasing customer retention and lowering churn can vastly improve a company’s revenue and acquisition costs. Add value that keeps customers happy and continually returning for more.

4. Try Affiliate Programs

Affiliate partner programs are an effective way to lower your customer acquisition costs. Affiliate partners use their influence to engage with possible clients. As a company, this tactic reduces CAC because you only pay affiliates percentage-based commissions after customers buy. A company can leverage an affiliate’s ability to boost sales without any up-front costs.

Similar to affiliate marketing, influencer marketing programs are becoming increasingly popular. Some social media influencers have built wide-reaching audiences that may be interested in your company’s products and how to use them. For example, technology influencers can use their social media platforms to tackle technical challenges like a VoIP troubleshoot or how to improve internet speeds.

5. Create Content and Assess the Effectiveness

Customers with high engagement rates reflect a connection that goes deeper than products and services. Companies use content to offer valuable information to their customers. A digital communications company could have an exciting communications solution using call disposition codes. For new customers, the solution could be daunting and seem complex.

By providing meaningful content, you can educate customers and build trust with the brand. However, content does not always perform as well as expected. Assess your online presence against the strategy. How can you optimize specific factors? Check your content for tone, focus on features and benefits, and offer clear calls to action. Test different factors that will make your content perform and lower CAC.

6. A/B Test and Optimize Your Pages

It is essential that marketers A/B test different parts of their landing pages. Customers with a more positive user experience (UX) with your website will show higher levels of customer satisfaction. As better UX design can result in higher customer satisfaction, it indirectly leads to higher sales.

A/B testing helps a company find out what their customers want to experience. Optimizing a website’s landing pages may include A/B testing product titles, forms, buttons, layout, and more. A/B testing allows companies to check how minor changes could impact click-through rates on their website. 

When deciding to implement changes on the company website, avoid making drastic changes that impact the user experience. eBay once discovered that drastic website changes could lead to disgruntled customers. It is important to consider how the results of your A/B testing will lead to higher rates of completed tasks. With more customers completing tasks, a company could see higher conversion rates.

7. Improve the Sales Funnel

An effective sales funnel helps a company efficiently manage a customer’s buying process. The funnel is how a company guides customers from being leads to becoming paying customers. Sales funnels are essential when trying to reduce customer acquisition costs. A great sales funnel provides ample information and gives the company an insight into the thoughts of its potential customers. 


It is possible to understand the motivations and reasons for customers dropping a purchase. Data analytics software helps companies pinpoint any underperforming stages of a sales funnel. A SaaS company may offer an excellent subscription service to the market. An optimized sales funnel can help that company increase sales by informing critical factors for improvement.

8. Marketing Automation

Lower your customer acquisition costs by utilizing marketing automation in conjunction with customer relationship management (CRM) tools. Marketing automation already reduces costs because fewer staff members need to focus on menial tasks. 

A company can think of ways to collect contact details for targeted marketing down the line. A communications software company may publish gated content and write topics such as “call dropping”.

Through gated content, customers can accept to be on email lists in return for the value of learning something new. Automation improves conversion rates and reduces acquisition costs because it spares other resources.


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Reduce Customer Acquisition Costs and Boost Successes

A company can post impressive sales numbers and statistics. At first glance, that could make a company hugely successful. Companies seek ways to reduce overhead costs and improve their sales numbers at the same time. Customer acquisition cost is a metric that can help you recognize the balance between customer acquisition and customer lifetime value.

Customer acquisition is an area where every company can look to reduce costs but improve on results. By lowering customer acquisition costs, you can save time and money for other aspects of the business. Try the eight tips suggested in this post and see how they positively impact your revenue. 

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