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A Practical Approach to Managing Customer Acquisition Costs in eCommerce

  • Posted on April 28, 2023 by Robert
  • Reading time about 6 minutes
Understand Customer Acquisition Costs in eCommerce

Since any business requires consumers in order to grow, customer acquisition is one of the topics that receive the most attention in the e-commerce world. Customer acquisition can be equated with expensive to maintain, inefficient methodologies like high ad expenses or high prices. However, client acquisition is more than that and may be carefully attained to keep consumers coming back after their initial purchase.

CAC is the sum of money needed to bring in new clients. Overspending on this might be fatal for your business. Some people believe it’s a good idea to spend $400 on each new client, but you might not agree.

The Importance of Customer Acquisition Cost

Many companies and investors consider CAC to be an important business statistic. In reality, a lack of awareness of the cost of client acquisition leads to many businesses failing.

Enhancing Return on Investment 

Analyzing marketing return on investment requires a thorough understanding of the cost to attract new consumers, and a business can gain it effectively by leveraging ecommerce loyalty programs.

A business may ascertain the most economical method of client acquisition by employing CAC. As seen in the above table, social media has the lowest acquisition costs while social events have the highest costs. A business can consider using digital promotion significantly to enhance customer acquisition.

Increasing Efficiency and Profit Margin

A company may properly analyze the worth of each client and increase its profit margins by comprehending its CAC. Consider the scenario where each consumer is worth $60 to a company.

Which channel, using the aforementioned scenario, would you pick? A corporation that doesn’t understand CAC will have lower profitability by leveraging social networking. With the usage of social media and advertising materials, the business’s revenue would raise since the CAC is less than the value per customer.

Assist in Creating the Marketing Strategy

A lower return on investment results from a greater client acquisition cost. It indicates that your company is investing more in client acquisition than it is earning in revenue. You may determine which marketing channel is costing you the most, as well as the areas where spending has to be reduced, by calculating the cost per client acquired through each marketing channel. It assists you in making crucial adjustments to your marketing plan for increased profitability.  

Statistics for Allocation of Marketing Budget

The main overhead costs for a firm are marketing expenses. Consider a business that attracts clients through a variety of social media platforms, for instance. An organization can discover the most economical strategy to gain clients by looking at the cost of customer acquisition. The bottom line, sales, and profit margins all improve as a result of this.  

Below are Some of the Most Effective E-Commerce Client Acquisition Techniques:

Audience Analysis Tools

This tool is a great approach to learning more about your target audience since it enables you to establish your audience type, choose the target demographic from Facebook or your page, and analyze the audience to learn more about their preferences. This data affects how you design a marketing strategy.

Putting Online Influencers into Action

Influencer marketing integrated ecommerce loyalty programs is among the strongest strategies for attracting new clients. Utilize this strategy by working together with social media influencers in your area of expertise and asking them to inform their audience about your offerings. 

Brand Network

Customers desire to feel a sense that they relate to a group instead of feeling like they have been marketed to. This is the rationale behind why so many companies have devoted a lot of time and resources to creating online forums where customers may interact. Customers desire to join organizations with more members, which feeds an endless process of constant acquisition and engagement. 

Customer Referrals

Because consumers trust referrals from their friends more than they do from brands, as you may well know, your current customers are excellent customer acquisition tools. 

Utilizing the effectiveness of personalized and authentic marketing is a terrific method to attract new clients. Implementing the best referral marketing software is the ideal approach to reward client recommendations. Giving loyal clients incentives for recommending your business on social media or by using a special referral link provides them more motivation to do so. Offering prizes or discounts to a new clients is a wise move in the interim to entice them to test your items.

Affiliate Marketing

Affiliate marketing enables eCommerce businesses to collaborate with online merchants who serve comparable demographics but aren’t direct rivals. Getting a client database to target while not paying any fee unless a sale is made is one of the finest aspects of affiliate marketing.

Tips for Reducing Customer Acquisition Cost for E-Commerce Business

Increase On-Site Conversion Rates

One may set up Google Analytics goals and do A/B split testing with new checkout systems to lower the rate of shopping cart abandonment and optimize the landing page, site speed, mobile optimization, and other factors to improve overall site performance.

Better Value to Users

The extremely abstract concept of “user value” is the ability to create something that users will find desirable. Customers could have wanted higher quality or more feature enhancements in this case. It could entail making a tweak to the present product for better positioning or developing new income sources from current customers. 

CRM Integration 

Most successful companies that have devoted clients utilize CRM systems integrated with a customer loyalty software solution. To gauge customer loyalty, this smart sales team may employ automated email lists, blogs, loyalty schemes, and/or other techniques.


CAC is a starting point since it reduces intricate client acquisition techniques into quantifiable metrics that can be contrasted. So, knowing your CAC is the initial move to unveiling a successful business. You may aggressively pursue business development the more precise your CAC measures are. Additionally, get in touch with Novus Loyalty right away to learn more about the course of study for developing an ecommerce loyalty program that will ensure the unlimited expansion of your company.

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