4 Actionable Strategies For Retailers To Reduce CAC in 2024
By Kelie Wong · 15th January, 2024
Every sale is a victory, but as a retailer, it's crucial to not just celebrate the win but also understand the underlying dynamics that contribute to your success.
One key factor that deserves your attention is the Customer Acquisition Cost (CAC). Knowing how much it costs you to acquire each customer is not just a metric; it's a strategic insight that can make or break your profitability.
In this guide, we'll unravel the layers of CAC and offer insights tailored for retailers, spotlighting strategies that align seamlessly with the capabilities of EasyStore.
What is Customer Acquisition Cost?
Cost of Acquisition (CAC) is the total investment a business makes to acquire a new customer. It encompasses marketing, sales, and technological expenses associated with turning a lead into a loyal customer.
Calculating CAC involves dividing the total costs associated with acquiring customers within a specific period by the number of customers acquired during that same timeframe. The formula for CAC is as follows:
What's included in CAC?
- Marketing expenses: Costs related to advertising, promotions, and other marketing activities.
- Sales expenses: Costs associated with the sales team, including salaries, commissions, and bonuses.
- Technology costs: Expenses for tools and platforms used in the customer acquisition process.
- Overhead: Other indirect costs linked to customer acquisition efforts.
Lowering CAC is in the company's best interest, as it directly translates to improved profit margins, a competitive advantage in the market, and sustainable business growth.
4 Proven Strategies For Retailers To Reduce CAC
1. Decode Customer Needs
3. Put Effort Into Organic Growth
Investing in organic growth is a strategic, long-term approach aimed at building authority, a robust database, and an expanding customer base. By prioritizing organic strategies, businesses can reduce dependency on costly advertising and foster sustainable growth. Key tactics include:
- Word-of-Mouth Marketing: Encourage satisfied customers to become advocates, facilitating organic growth through positive recommendations and referrals.
- SEO (Search Engine Optimization): Optimize online content and web presence to enhance visibility on search engines, increase organic traffic and brand awareness.
- Content Creation: Leverage popular platforms like TikTok for engaging content, including videos and live sessions, to connect with audiences and drive organic interest.
- Keyword Research: Conduct thorough keyword research to identify high-volume terms relevant to your business, improving search engine rankings and attracting organic traffic.
4. Automate Repeating and Low-Return Tasks
Implementing automation through integrated marketing and Customer Relationship Management (CRM) tools is a strategic move to streamline operations and enhance efficiency. 87% consumers are more likely to shop with retailers that use technology to enhance the unified customer experience (UCX).
Automation significantly reduces human resource costs by handling repetitive tasks, allowing staff to focus on more complex and strategic activities. Some examples include:
- Omnichannel Workflow Streamlining: Combine online and offline operations seamlessly, ensuring a more synchronized and efficient approach to customer interactions.
- Personalized Marketing: Leverage automation to deliver personalized marketing messages, ensuring a tailored and timely approach to customer engagement including scheduled broadcast messages and automated EDMs.
Achieve Success All At Once
In the dynamic retail landscape, where every sale matters, focusing on Unified Customer Experience (UCX) is a strategic imperative.
- 87% of consumers prefer retailers enhancing UCX,
- 34% increase in average spending
- 90% higher retention rate.
Satisfied customers from a streamlined UCX approach become advocates, contributing to organic growth and lowering the overall cost of acquiring customers. Prioritizing UCX isn't just about enhancing the experience; it's a key driver for cost-effective and sustainable customer acquisition.
The Complete Solution For Seamless UCX
EasyStore is a unified commerce solution designed to unify online and retail customer experiences. Over 50,000 brands have grown their businesses by embracing UCX through EasyStore, providing customers their desired Unified Shopping Experience.
Provide a seamless shopping journey with consistent product and service offerings. Enhance customer convenience, encourage frequent returns, and expand the brand's presence across multiple sales channels.
- Shopping Freedom: Allow customers to choose their preferred shopping environment: app, mobile, or web. Offer a seamless experience across platforms to enhance customer loyalty.
- Passwordless Buying: Provide hassle-free login options with email or mobile number. Streamline the entry process for quicker decision-making and purchases.
- Rapid Shopping Journey: Save customer shipping details for an effortless repurchasing experience. Encourage more frequent orders by valuing the customer's time.
- Deliver Excitement Anywhere: Accommodate customer preferences for home deliveries or in-store pickups. Flexibility in delivery options can be a decisive factor in the purchase decision.
- The Path to Lasting Loyalty: Ensure a consistent experience between online and offline shopping. Build trust by offering a harmonized experience, encouraging repeat business.
- Different Staff, Same Experience: Present a consistent face to customers, whether in-store or online. Elevate the shopping experience and solidify the brand's reputation.
Over 50,000 brands use EasyStore to unify their retail and ecommerce business.Request a demo
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