Significant business growth requires a delicate balance between acquiring new customers while remaining focused on existing customers. Over the last few years, the cost of revenue has increased by almost 60%. This has put tremendous pressure on marketing departments to optimize the cost of customer acquisition.
The Customer Acquisition Cost (CAC) includes the cost of audience acquisition on marketing platforms and cost of audience conversion on the owned properties, like a website. Both have a strong correlation as well: If you try to lower the cost of audience acquisition, it results in a reduction audience quality, which can directly affect conversions and revenue.
Likewise, lowering the cost of conversion lowers customer engagement, and significantly diminishes the expected return on spend value acquiring high-quality audiences.
A critical step to increase the efficiency of customer acquisition spend is to identify and acquire the right customers. The most efficient way to achieve this is with a holistic strategy with equal focus on:
The audiences that value your offering and have high likelihood to convert
The audiences that have high loyalty and repeat purchase propensity
The audiences that are in the market or have interests that align or are closely adjacent to the value offering
Such a strategy requires both the contextual and behavioral understanding of your audiences.