13 Ways to Reduce Your Customer Acquisition Cost


Research shows that getting a new client can cost a business seven times more than selling to an existing one. This aspect means that your brand may spend anywhere from $7 to $395 on each new client, depending on your field.

High customer acquisition costs (CAC) can lower marketing returns and make it tricky for your brand to grow. Understanding how to lower these expenses will help you simplify scaling, increase your net profits, and streamline your sales & marketing.

Here are 13 practical tips for lowering your customer acquisition cost.

1. Understand your customers' needs      

Learning what your target market wants is vital to reducing customer acquisition costs. This measure helps ensure you present desirable products or services. It also allows you to improve branding and capture the target market in the right channel or time.

Some steps to follow when studying the needs of your customers include:

Create a buyer persona

Developing a buyer persona provides a good idea of your market and its preferences. To get started, try to identify the demographic description of the potential client. Here, consider factors such as age, income, and gender. You should also narrow their preferences, location, interests, and hobbies.

One method you can use to create a buyer persona is referring to your contact forms. These will help you identify the category of people that seek your services. From here, you can determine if the brand appeals to the target group.

Creating a buyer persona allows you to keep the target customer in mind when researching. Likewise, you can use this information to define your marketing strategies.

Get feedback from your customers

Customer feedback gives you more details about the needs of your target market. This information will allow you to alter your products or services and attract more buyers.

Request customer reviews by sending feedback forms via mail. You may also ask clients to rate your brand on Google business pages or social media platforms. Other ways to ask for customer feedback include:

‚󏬆¬†¬†¬†¬†Pop-up surveys

‚󏬆¬†¬†¬†¬†Social media polls

‚󏬆¬†¬†¬†¬†Follow-up emails after a pop-up chat

When requesting feedback, ensure you focus on various aspects. For example, your questions should help you understand the client's functional and emotional needs. Additionally, they should simplify assessing if your brand provides a good customer experience.

Study your competitors

Learning more about your competitors can give you a better idea of your potential customers' needs. You can determine the benefits clients would expect from your brand based on what other companies offer.

Assess how your competitors meet clients' needs by checking their reviews and testimonials. Conversely, look for negative feedback and other aspects that may help you determine what has left customers feeling unsatisfied so you can avoid making the same mistake. Such information may also help you identify a market gap and attract more clients at a lower cost.

2. Reach your target customers on their preferred channels

Switching channels is frustrating for many consumers. If you can't engage leads on the platform they used to reach out, the conversion rate lowers. In the long run, you spend more money recapturing their attention and turning them into buyers.

Cut your customer acquisition costs by reaching your audience on their preferred channels. To do so, identify the platforms consumers regularly use. Afterward, use these sites to boost engagement instead of requiring the lead to shift to a different channel.

Reaching your target market on the platforms they prefer has many benefits. First, it allows you to create a custom buyer journey. This can boost marketing efficiency by leading to more conversions. Moreover, it shortens the buyers' journey, helping you lower expenses.

3. Invest in Search Engine Optimization (SEO)

SEO marketing boosts ranking on search engines, driving more traffic to your pages. Ultimately, you can get more leads and sell your brand without spending so much on ads. Since SEO is a broad field, you should identify suitable strategies for your company.

Some options to consider are:

Keyword targeting

Incorporating keywords into content is a popular SEO strategy. Research the phrases or words consumers regularly use when searching for your services or products. After that, use these phrases in your content to boost page ranking.

While using keywords excessively may be tempting, you should avoid spamming. Instead, apply keyword variations and ensure your content has a natural flow. Likewise, keep up with SEO trends or hire a digital marketing expert to leverage this strategy.


Meta descriptions can determine if your target market visits your pages. They may also influence website ranking on search engines.

Lower your customer acquisition costs by using engaging metadata. Ensure the descriptions are brief and contain relevant keywords. For an added boost, include key phrases in page titles.


Links can boost SEO ranking and reduce acquisition costs in many ways. For example, internal links will increase the time spent by visitors on your site. This aspect may lead to higher conversion rates by improving content usability.

External links will help your brand gain domain authority. Further, they allow you to earn the trust of your target customer and generate more site traffic.

4. Create a referral program

How to create a customer referral program

Many consumers are more likely to buy a product if they hear about it from their family and friends, so consider creating a program to encourage word-of-mouth referrals. Reduce customer acquisition costs by encouraging your clients to recommend others with incentives. For example, offer discounts for the next purchase if they bring in a new buyer. You may also pay a commission based on the sales income generated from the referral.

Other ways to encourage referrals include:

‚󏬆¬†¬†¬†¬†Offering branded merchandise

‚󏬆¬†¬†¬†¬†Providing a free subscription if you deal with software

‚󏬆¬†¬†¬†¬†Offering loyal customer mentions on social media pages

A referral program will only be effective if your clients have enough information about it. Use email marketing to promote the program and encourage more customers to use it. Try to target your high-value clients since they are more likely to market your brand.

Another strategy to promote your referral program and lower acquisition costs is using share buttons. Let page visitors share your content by incorporating this feature on your website and social media. Track sharing to identify the clients that help you attract more consumers.

Referral programs will improve your sales cycle, simplify generating credible leads, and cut the resources spent on marketing and follow-up. A referral program will also boost brand awareness and help you establish your company as an authority.

5. Use social media marketing

Engaging potential customers is tricky when using traditional marketing methods. This can cause you to lose a lot of leads along the buyer's journey. It may also affect communication and discourage potential buyers.

Social media marketing will cut customer acquisition costs by boosting engagement. Platforms like Instagram and Facebook allow viewers to engage with your posts. They can also lead to more traffic since other people get notifications when their friends interact with your posts. When you leverage social media, you can measure vital metrics and strategize how to entice customers.

Unlike traditional brand promotion methods, social media campaigns allow you to track ad spending, so you can reduce acquisition costs. You may also use metrics like lead generation expense and returns per ad to identify the most effective channels.

Social media platforms provide several options to reach your target market and turn them into clients. For example, you may use photo ads with captivating descriptions, make the image clickable, or attach a link that will direct them to the desired action.

Engaging influencers is an ideal way to cut customer acquisition costs when marketing on social media. If a trusted celebrity in your industry recommends a product or service, their fans are highly likely to buy. This method also boosts your outreach and allows you to increase brand awareness at a lower cost.

Other ways to market on social media are:

‚󏬆¬†¬†¬†¬†Posting videos

‚󏬆¬†¬†¬†¬†Social blogging

‚󏬆¬†¬†¬†¬†Posting stories

‚󏬆¬†¬†¬†¬†Using hashtags

‚󏬆¬†¬†¬†¬†Incorporating clever captions on posts

Leveraging social media will help you make the most of your marketing budget. Since you can incorporate visuals into your content, you will easily capture your audience's attention. Moreover, you can effectively target ads using aspects like search histories.

6. Develop social proof

Social proofing for your brand will help lower customer acquisition costs in many ways, but one of the most notable ways it does so is it simplifies building trust and credibility with interested customers which reduces skepticism, motivating them to make the first purchase.

Some practical tips on developing social proof include:

Getting approval from experts

You can quickly get new customers when experts approve your products or services. Request industry specialists to review your brand and post the information on your pages. Work with them on ad campaigns and other events where you may interact with potential customers, including seminars, workshops, and webinars.

Mention key achievements

Talking about crucial achievements is another effective way to social proof your brand. Mention critical projects you handled before and outline their results. Ensure all the outcomes are measurable and expressed in easy-to-understand terms.

Potential customers can recognize a brand's value when they read about its achievements. They may choose you over competitors after realizing you offer better results.

Showcasing key brand achievements can help you capture the interest of passive buyers. Ultimately, you will avoid spending a lot of resources encouraging them to commit.

Get positive reviews

Most consumers research brands and read reviews before buying services or products. This helps them compare several companies and identify one that will meet their needs. It also gives them a rough idea of what it's like working with a particular brand.

If you have negative reviews, you will spend a lot of money getting customers. This issue can also arise if interested buyers don't get feedback about the company or its products. Other problems that may occur due to negative reviews are:

‚󏬆¬†¬†¬†¬†Losing potential buyers

‚󏬆¬†¬†¬†¬†Damaged business reputation

‚󏬆¬†¬†¬†¬†Losing current clients

‚󏬆¬†¬†¬†¬†Low ranking onsearch engines

Get positive reviews on all your sites by following up with customers. An ideal strategy is requesting feedback several days after purchase. Still, you may wait several weeks if you deal with software or appliances.

Offering high-quality services and products can help generate more positive reviews. Determine if current buyers are happy with your services by sending feedback forms. After that, address the raised issues and notify all customers. This can alter negative opinions and show customers you care about them. It also solidifies your online reputation and simplifies attracting buyers.

7. Optimize the sales funnel

A sales funnel can affect the result of your marketing efforts. It also influences the resources spent acquiring valuable customers. Optimize your sales funnel by ensuring leads spend the least time possible in the first stages: awareness, interest, and decision.

One way to speed up decision-making and optimize the sales funnel is using case studies. Like reviews, these allow the interested parties to measure your business's value. Case studies also convince customers that they’ll get the desired results by buying from your company.

 Other ways to optimize the sales funnel are:

‚󏬆¬†¬†¬†¬†Posting engaging content

‚󏬆¬†¬†¬†¬†Responding to inquiries quickly

‚󏬆¬†¬†¬†¬†Defining your audience

‚󏬆¬†¬†¬†¬†Using a clear call to action

Providing interested buyers with irrelevant details can negatively affect the sales funnel. Customers may spend too much time analyzing messages to find what they need. They might ignore the information and opt for a brand with straightforward communication.

Simplify your sales process by providing consumers with the needed details. For example, if they want to know the price of a specific item, avoid sending the entire catalog. Instead, quote the price while including available discounts and packaging options. This will prevent confusion and frustration among potential consumers and reduces the time spent serving one lead, lowering your costs. Simple and clear communication speeds up buying decisions.

8. Automate marketing

Some marketing processes are time-consuming and repetitive. This aspect slows down your team, leading to high customer acquisition costs.

Embracing marketing automation is the best way to simplify work and avoid repetitive tasks. This step also allows your team to focus on other tasks. Some common ways to automate this process are:

Using chatbots

Responding to customer inquiries is stressful, especially with a small team, and can cause you to miss some messages or respond to them late. You may also lose potential customers due to poor support.

Automate marketing by using chatbots to respond to inquiries. These will reduce response times and allow you to address and respond to more messages at once. Not only that, but you can avoid having to hire multiple customer support agents for your contact center, effectively helping you keep staffing costs low.

Schedule social media posts

Posting on social media often can help you get more clients at a lower cost. Still, this process is stressful, especially when your business is active on multiple platforms.

Simplify customer acquisition and boost consistency by scheduling posts. Marketing solutions will allow you to set posts for uploads at a specific time on all your pages.

You may also customize them to upload different ads on each platform. Scheduling social media posts has several key benefits. First, it simplifies achieving the goals of each campaign. Likewise, you can reach more target customers with less effort.

More benefits of automating marketing with scheduled posts include:

‚󏬆¬†¬†¬†¬†You can target customers when they are most active on social media

‚󏬆¬†¬†¬†¬†You will dedicate more time to engaging potential buyers

‚󏬆¬†¬†¬†¬†Scheduled posts simplify marketing planning

Simplify lead management and nurturing

Managing and nurturing leads can waste resources for your business. You may sabotage marketing efforts if you don't get a high conversion rate. The company may also incur losses if the investment exceeds the generated sales.

Automating lead management will boost efficiency and cut costs. Use software to track potential customers and identify where to focus marketing efforts. With suitable tools, you can view communication histories and streamline outreach. You may also manage interaction on all platforms without confusion.

Nurturing leads allows you to create good relationships with potential customers. This measure can lead to significant sales, boosting marketing returns. Automate nurturing by getting a solution to send emails at specific buyer stages. For example, use the tools to notify leads about free product trials. These may encourage them to sign up for your services quickly.

9. Ensure you generate high-quality leads

Low-quality leads will lead to high customer acquisition costs. You must revise your methods if you have a high-engagement rate but rarely convert interested buyers.

Several methods you can use to generate high-quality leads are:

Ensuring contact forms gather the necessary information

Contact forms help you gather data about page visitors. Filtering potential customers based on their quality can be tricky if you don't request the correct details. When creating contact forms, use the mandatory fields to understand the lead's demographics. Ensure that these sections allow you to get the vital information you may need later, like phone numbers, emails, and locations.

Requesting personal details can filter out low-quality leads, allowing you to personalize customer service and boost the chances of conversion.

Target the decision-makers

Another way to boost lead quality is by targeting the decision makers. For example, if you sell software, aim your efforts at the business owner or project managers. If you market kids’ products, focus on parents or guardians. You get the idea.

Aiming your marketing content and efforts at the decision-maker helps you connect with the right people and prevents delays in the buyer's journey. In the long run, you'll avoid wasting resources and generate more returns.

Remove time-wasters from your list of leads

Improving the quality of leads may involve removing time-wasters. This includes people who regularly ask about your services but don't buy. They may also be leads that provide their contact info but never respond to calls or emails.

Filtering out such parties will help your marketing team focus on credible leads, effectively saving time and resources that would otherwise go into a never-ending inquiry cycle. 

Some competitors may sign up for your emails to track your activities and to see how you capture your target market. As you filter your leads, watch out for impostors like competitors and remove them.

Use leadscoring

Lead scoring allows you to rank prospects based on their value to your brand. This simplifies identifying those highly likely to buy and those with less interest.

Use scores to improve the quality of your leads and cut customer acquisition costs. The best way to create these points is by identifying the factors that qualify a consumer as a good lead. After that, assign scores to each item and add them for each prospect.

Since many aspects may determine the quality of a lead, calculating the scores may be time-consuming. Simplify this process and boost your acquisition efforts using technology. With tools like customer relationship management (CRM) software, you can more easily generate lead scores. This will help your teams identify leads to focus on and save time.

10. Track marketing performance

Observing your marketing performance can help identify what you need to change, reducing the money and time required to get a new customer. It also lets you understand market fluctuations and how they may affect lead generation.

The tools used to measure performance can vary based on the marketing strategy, however, there are plenty of techniques that are ideal for most business types and advertising methods.

Some ways you can lower CAC by tracking marketing performance include:

Using conversion tracking in Google Analytics

Google Analytics is an effective tool for measuring some metrics. Set up your marketing goals on the Google admin panel. Next, select the goal type and describe it. You can then add more details about the target and verify it.

Once you set the goals, turn up conversion tracking. This helps you identify how page visitors interact with your site. Likewise, you can alter or update your site to meet the needs of your target market.

Other benefits of using conversion tracking in Google Analytics are:

‚󏬆¬†¬†¬†¬†Tracking returns on pay-per-click (PPC) spending

‚󏬆¬†¬†¬†¬†Measuring SEO results

‚󏬆¬†¬†¬†¬†Assessing user engagement

Tracking key metrics on social media

Another way to track performance and cut CAC is by monitoring critical social media metrics. For example, measure the lead conversion rate to identify the best sites for marketing. Use unique URLs on the call-to-action posted on social media. These can help you determine the pages generating more traffic and leverage them.

Return on investment (ROI) is a crucial aspect to monitor on social media platforms. Calculate the difference between the amount spent and generated by marketing on each platform. After that, factor in other costs, such as:

‚󏬆¬†¬†¬†¬†Hiring an agency

‚󏬆¬†¬†¬†¬†Implementing social media tools

‚󏬆¬†¬†¬†¬†Creating social media campaigns

Calculating and tracking ROI while considering these factors gives a clearer picture of the returns. Additionally, it allows you to revise your strategies and make informed advertising decisions.

Measuring the customer lifetime value (CLV)

Measuring CLV is an effective way to lower acquisition costs. When you understand the value of each client within a given period, you can balance short and long-term goals. This will allow you to focus your efforts on methods that bring in high-value customers.

Aligning marketing goals with financial objectives is challenging for many brands. By tracking CLV, you can ease this process and get more leads at a lower expense.

It's also possible to understand how different segments contribute to your revenue. This information improves market targeting and allows you to spend more resources on niches with better returns.

11. Retarget lost customers

Since getting a new customer is costly, consider targeting leads you lost in the past. Before creating strategies to win back potential clients, determine why you lost them. Some common issues include:

‚󏬆¬†¬†¬†¬†Slow customer feedback

‚󏬆¬†¬†¬†¬†Requesting too much information

‚󏬆¬†¬†¬†¬†Giving up early

‚󏬆¬†¬†¬†¬†Failure to follow up

‚󏬆¬†¬†¬†¬†Spamming their email

Understanding the primary causes of lead loss and high bounce rates will help you lower CAC in the future. The methods you use to retarget lost customers often depend on the grounds. The most effective techniques include:

Sending an email immediately

Emailing a user immediately after they leave your website is ideal for various situations. Perhaps they were shopping and abandoned their cart or they bounced when the page had an error causing slow load speed. 

Retargeting customers promptly can help you change their perspective of your brand. It may also prevent restarting the buyer's journey, reducing costs.

Retargeting during special occasions

Offering lucrative deals and discounts during holidays is ideal for retargeting customers. Use this strategy to reach out to visitors who only viewed your page once or repeat customers who no longer buy from your brand.

Enticing deals can help you attract the attention of such consumers. After that, you may encourage a purchase or find out why you lost them initially. Retargeting leads on special days may convince buyers who found your past selling efforts intrusive. It also presents opportunities to redeem your reputation and get loyal clients.

Contacting leads before products or offers expire

Contacting past prospects before the offers or items they wanted expire can help you regain them. Review abandoned carts to identify whether the customer included an item with a low shelf life. Also, check if they want to subscribe to services or programs that are running out.

When you contact leads interested in such items, you can nudge them to purchase before expiration. This measure could avoid product wastage and lower CAC.

Basing retargeting efforts on customer demographics

Using the wrong method when retargeting leads can cause you to lose them forever. Before approaching customers, review their demographics to understand what they like. After that, create a personalized message to boost the possibility of conversion. For example, if you want them to upgrade a phone, mention the previous model they bought and explain that the recommended type is a better version. Ensure that the suggested item matches their preference and income range.

12. Test your landing pages

The design of your landing pages can convert page visitors into buyers. Further, it influences the efforts and resources needed for each lead conversion. Test your landing pages by changing the headings regularly. After that, track the leads you get from each option and stick to the most effective one.

Other practical techniques for testing your landing pages are:

‚󏬆¬†¬†¬†¬†Reformatting the content

‚󏬆¬†¬†¬†¬†Using different CTAs

‚󏬆¬†¬†¬†¬†Altering page button size, position, and color

‚󏬆¬†¬†¬†¬†Including directional clauses

‚󏬆¬†¬†¬†¬†Decluttering the landing page

Another way to assess your landing pages is by altering the lead contact form. Change the design of these documents and the information required in each. You may then identify the option that gathers helpful details, lowering the customer acquisition cost.

13. Bundle your products

Product bundling allows you to lower CAC by marketing and selling several items simultaneously. It also boosts awareness of new products by pairing them with popular ones.

Understand your customer's needs to bundle products strategically. During this process, identify the items they may need based on their search history and buying behavior. After that, send a personalized marketing email or pop-up including those products.

Bundling items shows potential customers that you understand their needs and introduces them to items they didn’t realize they needed. Ultimately, you can trigger many buying decisions and avoid a lengthy marketing or follow-up process.

Contact Smith.ai to reduce your customer acquisition costs

Lowering customer acquisition costs will allow your brand to scale. Still, identifying the best strategies can be tough without the right tools. Likewise, you may lack the talent or time to implement each method.

At Smith.ai, we offer your business the support it needs so you can focus on lowering CAC. Our solutions will:

‚󏬆¬†¬†¬†¬†Improve communication with lead screening and intake and outreach campaigns

‚󏬆¬†¬†¬†¬†Engage website visitors with 24/7 website chat

‚󏬆¬†¬†¬†¬†Manage your sales outreach campaigns with 24/7 live receptionists and email and SMS follow-up

Our virtual receptionists can provide website chat interactions on your behalf, and later, give you detailed summaries and chat transcripts. In addition, Smith.ai was recognized by Clutch as a top sales outsourcing provider. You can chat with us live on the site 24 hours a day. Book a free 30-minute sales consultation to find out more.


Business Education
Sales Tips

Elizabeth Lockwood is the content marketing associate at Smith.ai. She focuses specifically on writing and editing engaging articles, blog posts, and other forms of publication.

Take the faster path to growth.
Get Smith.ai today.

Affordable plans for every budget.

Sign up for our newsletter

By signing up, you agree to receive news & updates from Smith.ai.
Thank you!
Your submission has been received.
Yikes! Something went wrong while submitting the form.

Take the faster path to growth.
Get Smith.ai today.

Affordable plans for every budget.