Reducing Customer Acquisition Cost (CAC)


Customer acquisition is vital for your business for multiple reasons. It helps your business expand and generates revenue for ongoing growth. However, according to Harvard Business Review, “acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.“ This means that reducing the cost to acquire new customers is critical if you want to maintain a profitable bottom line. But how?


1. Improve website UX continuously

Work towards a faster load time, lower bounce rates, mobile and tablet responsiveness, optimised landing pages, effective call to action buttons, bold aesthetics and good copy. Perform comparative and exploratory usability testing and use A/B testing. Based on the results, you can modify your customer acquisition strategy appropriately as you will know where to concentrate your energies. You’ll figure out what’s bringing you the most leads, retaining customers and improving conversions, all of which lead to a lower CAC (Inc.). The takeaway: “failure to realize what works for you would result in a wastage of time and money, causing high customer acquisition cost. In order to reduce it, use your energies where the result is good.” (Forbes)

At QoboWEB, we pride ourselves on transforming creative output into fully-functioning, high performing, dynamic websites that convert.

2. Find a balance between client acquisition and client retention

Research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows increasing customer retention rates by 5% increases profits by 25% to 95%. (Harvard Business Review). One way of understanding whether your company is retaining customers is by calculating customer churn rate, i.e. working out the percentage of customers that opt out of a relationship with your business over a particular period, and then identifying why. In terms of a website or app, churn is often attributed to a subpar user experience (UX), poor user interface (UI), cost, competitor-driven churn, poor customer service, product problems, and more. The why is critical in terms of damage control because a dissatisfied customer can very quickly destroy your business’ reputation, particularly in a world where most consumers live online and where negative comments become viral hits almost instantly. And when negative bias sets in about your business, trying to acquire new customers becomes almost futile, no matter how heavily you invest in the exercise.

The takeaway: happy customers and positive testimonials = lower CAC. QoboWEB’s creative team are a vibrant group of people with a passion for producing extraordinary results. They will bring your website to life in a way that not only drives new customer acquisition but also retention so that customers keep coming back for more.

3. Invest in marketing automation

How we market to customers today has evolved significantly. Marketing efforts are becoming personalised to target specific audiences and most marketing strategies make use of digital platforms to be able to reach those audiences where they are. Marketing automation tools offer several benefits across industries, for example, an innovative CRM system can help you execute varied marketing campaigns that can be segmented to specific groups of customers quickly and effectively, it can improve lead generation, it can monitor which marketing campaigns generate the most enquiries, it can generate multiple reports, and more. But how does this reduce CAC? This Forbes article suggests that, “for any average business, salaries can roughly account to about 75-80% of overall expenses. Now let’s say if converting a single customer requires, say, five minutes of human input, the cost that goes into those five minutes (the employee’s salary) may buy you up to three days of marketing efforts done through an automated marketing software. This way, you will reduce the CAC since you’re spending less.”

Let our team design you a website that sets you apart from the competition and that helps you acquire new customers (and retain existing) in a way that doesn’t hurt your bottom line.