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Ecommerce Growth

25 (really specific) ways to reduce customer acquisition cost in eCommerce

Is acquiring new customers getting too expensive? Here are 25 tested ways to reduce the customer acquisition cost of your eCommerce business.

25 (really specific) ways to reduce customer acquisition cost in eCommerce

In research as recent as 2022, it was shown that customer acquisition costs (CAC) for eCommerce businesses have been steadily on the rise. 

In 2013, if merchants lost $9 for every new customer acquired, in 2022 that number had leapt to $29. 

Quick math says that’s a 222% increase in just a window of 9 years. 

In this atmosphere, the only way ahead is to put  tested measures around reducing CAC to action. 

Having worked with over 500 businesses across the world, we’ve put together a list that has come in handy for our clients. 

Here we go!

1. Figure out the top locations your customers are from

If you can narrow down on the topmost locations where your brand and products are doing well, then your battle is half won. 

It is then obvious that the cultural, social and financial demographics of these regions are aligned with what you’re selling/promoting. 

To find out your top locations, go to:

Google Analytics > Audience > Geo > Location

Once you’ve rounded up these locations, you can:

- Study your target audience more closely

- Research the competition you have there (& their tactics)

- Scope out the trends the audience seem to be responding to/ are interested in

Scanning and analyzing your top locations will ensure you’re not looking at locations (and spending all that money) that will eventually have lesser yields. 

2. Narrow down on top categories and products

Like figuring out top locations is key, so is figuring out the categories and the products your brand is performing really well. 

Phasing out products and categories that aren’t doing well over a period of time, is a decision you must take to keep production & storage costs low. 

Getting clarity about top categories and products can help you channel your marketing & sales efforts in an already promising direction – helping you reduce CAC. 

To find out your top categories and products, go to:

Google Analytics > Conversions > eCommerce > Product Performance

If you find you have multiple categories and products that haven’t been doing well, you could announce a clearance sale – position it as a sitewide sale where you offer a deep discount.

Here’s an example from Casper

casper clearance sale example

3. Analyze the top sources of traffic for your website 

Taking a similar approach, you could also reduce customer acquisition costs by focusing on the traffic sources that bring your eCommerce website the most views & reads. 

To find out your top traffic sources, go to:

Google Analytics > Acquisition > All traffic > Source/Medium

Once you figure out which sources are bringing you the most interest in terms of visits, you can figure out how to engage with the traffic there. 

For example, if you find out that your blog has been bringing you the most visitors, you can then think of how to refresh, improve and enhance the content there. 

You could look at ramping up the categories under which you post content, add videos linking to your Youtube brand channel or even bring in experts for guest posts. 

Revenue on your mind? Read 11 Guaranteed Ways to Boost Revenue per Visitor (eCommerce)

4. Incorporate decoy pricing in your pricing strategy

Clearly, making your existing customers more confident about their purchases, will lead to them sticking around more. 

One proven way to get existing customers to keep buying from you is the decoy pricing effect. 

The decoy effect is meant to drive customers towards a higher valued product as against one that's cheaper. 

And this is done by introducing a third product – this leads to customers subconsciously rejecting the cheapest product as well as the most expensive one. 

Here’s a quick example:

Apart from giving customers the impression that they’re getting a better deal that’s neither too cheap nor expensive, decoy pricing has a positive impact on Average Order Value (AOV). 

Here are a few ways to apply decoy pricing in your eCommerce store:

- Offer multiple alternatives from the same brand

- Offer similar products within a certain price range from different brands

- Offer varied product bundles focused on a spectrum of similar customer needs

5. Bundle slow selling & fast selling products together

When you ‘smart bundle’ fast selling products and slow selling products to give it away at an attractive (discounted price), it’s a win-win. 

For the business’ sake, the sluggish stock is able to find a way out. 

For the customer’s sake, there’s savings on the total price. 

To ensure your ‘smart bundles’ sell really well, you’ll have to ensure:

- One or more products are of a higher price (and hence to be perceived of great quality)

- The products fit together in a relevant way (for example, bundling a tongue cleaner with a toothpaste and toothbrush is way more relevant than bundling a torch)

- Introducing labels that are relevant & attractive (for example, when you place a smart bundle under the “bestsellers” section and also give it this label, potential customers experience greater trust & confidence)

- Featuring price anchoring (to drive the benefit of saving)

One eCommerce brand that’s known for their super-valuable bundles is Vanity Planet. 

(To make it easy for customers to find these smart bundles, they’ve introduced a separate category named “bundle & save”). 

vanity planet uses price anchoring to make their smart bundles more attractive

6. Leverage the “buy more to save more” bundling approach

The other way you can make sure your bundles draw attention is to give price benefits in alignment with the quantity bought. 

So the idea is simple: the more the customer chooses to buy, the deeper the discount they qualify for. 

This approach works especially well during peak holiday season, when people are willing to spend but also looking for some great deals – because well, there’s a lot of spending to do. 

From a bundling strategy perspective, you could try this approach by applying ‘pure bundling’. 

Essentially, there will be a number of products in your bundle, but none of them will be available independently to be bought. 

Here’s an example of pure bundling from Kylie Cosmetics

Kylie Cosmetics uses pure bundling to drive sales of their bundles

What makes it attractive is that they label this bundle as “limited edition” in their product description. 

Want more actionable advice? Check out: 13 product bundling examples that convert (& 10 proven ideas)

7. Pay more attention to HOW you upsell and cross-sell

While traditionally a lot of focus has been placed on what products you offer for upselling and cross-selling, through our experiments we’ve noticed that the HOW is also equally relevant. 

There’s research out there already that effective upselling and cross-selling can increase up to 30% of a business’ revenue. 

Alongside, it’s been seen that repeat customers fall back on upsells and cross-sells frequently. 

If you’ve been upselling and cross-selling already, here are a few more considerations that can help you optimize your CAC further:

- Limit the number of upsell choices (the point is to have customers not experience choice paralysis and instead add more products to their bag)

- Explore channels with higher CTRs (for example, SMS has shown to be a big grosser in terms of customers engaging with upsell & cross-sell content sent by businesses)

- Highlight upsells & cross-sells with maximum reviews (this can have an immediate impact on how confident a customer feels about the suggestions being made to them)

- Offer context through a short label or highlight (for example, if you’re promoting a better battery, say something like “lasts 5 times longer than…” – context helps customers decide faster)

8. Analyze reasons behind drop-offs from different pages of your website

Not knowing where a customer is in the conversion funnel, could potentially lead you to overlook where they are dropping off from and why. 

For example, primary navigation on your homepage could be a reason behind drop-offs from that location. 

On the product page, you may not display reviews in an instantly accessible way – and that could become a reason for drop-offs from the product page. 

Here are a few tested measures we’ve applied time and again to deal with drop-offs:

- Check the “behavior flow” report on Google Analytics (this shows the number of drop-offs across each page on your website)

- Go through the click & navigation data gathered from each page using heatmaps

- Use a dedicated tool like ScreamingFrog to find & fix broken links

- Use heatmaps to identify which fold(s) of a page has most engagement 

- Use heatmaps to also identify form fields that cause friction

- Assess your pop-ups and exit intent communication to find out what’s not working – is it the CTA, the langage, the offer or when it’s being shown

Dive in deeper with: How to reduce bounce rate: 7 surefire techniques + examples

9. Find out customer experience gaps across your website & mobile site

‘Purchase friction’ is a real problem in eCommerce. 

And to ensure potential customers buy from you or bookmark you as an option for later, you’ll have to remove these points of friction. 

The most common problems across website & mobile site CX happen to be:

- Poor navigation (making product discovery a problem, including poor search that does not show up alternatives or related categories)

- Lack of personalization (be it in the products that are displayed on the site or the recommendations that are made through email)

- Generic emails (the more a brand contributes to this, the more its perception suffers in the eyes of the customer – the latter need good reasons to open one email from the hoards they get everyday)

- Ineffective product descriptions (which are either too vague or demand too much from the customer to arrive at the highlights around features & benefits)

- Too much scrolling (can be a problem across both desktop & mobile, the latter being more susceptible – antidotes include quick bulleted lists, short paragraphs and relevant headlines for each content section)

10. Improve support & resources across touchpoints to improve CLV

Combining the aspect of AOV and the frequency with which a customer purchases, eCommerce businesses arrive at the crucial metric of CLV. 

According to some critical research by Bain & Co., when customer retention rates increase by just 5%, the profits are likely to rise anywhere between 25% and 95%. 

To improve CLV, customer experience needs to improve dramatically. 

Here are a few ways you could consider:

- Start incentivizing engagement with your brand (if they purchase from you, ensure to offer them a discount here & a coupon there; for every two/three times they hit your “refer a friend” CTA, offer a free gift in line with their preferences)

- Ensure quick responses over email & on social media comments (email automation that covers a wide range of email communication can be helpful)

- Offer content that customers will find useful & refer to frequently (along with purchase-driven content, also focus on what they may find interesting or what can create awareness)

Make the most of: 14 underutilized strategies for increasing customer lifetime value in eCommerce

11. Design landing pages that will bring in the conversions

Landing pages are known to be 123% more effective in comparison to other forms of sign-up. 

Businesses that happen to have 10-12 pages end up enjoying 55% more leads. 

Put simply, effective landing pages help potential customers to move towards a purchase. 

So, when designing landing pages, here are some key factors you’ll need to consider:

- Feature ONE bold CTA 

- Make the message compelling and actionable 

- Make the message appear above-the-fold

- Make the content easily scannable 

- Use minimum text and compressed images for super quick loading

- Bring in grid flexibility & make room for mobile-responsiveness

- Introduce checkboxes & drop-downs to enable access across devices

One brand that takes its landing pages very seriously is Marley Spoon (Martha Stewart’s meal kit delivery service). 

Notice how they’re all for clean layouts, self-explanatory images and no-nonsense copy. 

In the mobile version, they ensure their primary navigation is sticky and only one CTA is featured (in contrast to the desktop version). 

Marley Spoon focuses on creating good CX across their web and mobile sites
Marley Spoon focuses on creating good CX across their web and mobile sites

12. Design a loyalty program by prioritizing deeper engagement

The old belief that loyalty programs are only meant to retain customers so that they can come back for purchases, is not as relevant anymore. 

While repeat purchases are important, the idea of a relevant loyalty program is to make it rewarding for customers to keep engaging with your brand. 

This is probably the reason why 90% customers are likely to buy from brands that clearly show they know personal engagement preferences & buying behavior. 

Here are a few considerations that can enrich the way you design your eCommerce loyalty program:

- Start incentivizing non-transactional engagement (for example, if you find a customer mentioning you on social media, have them come back by offering a discount on products they’re likely to consider; similarly offer discounts to those who finish surveys and quizzes etc.)

- Communicate alignment of brand values with life choices of target audience (this may apparently appear as non-transactional, but buyers have been seen to prefer brands that reflect their personal values around living & buying. A fashion brand like Allbirds is a good example.)

- Convey the benefits of joining the loyalty program clearly (anything that’s difficult to understand or relate to can potentially create cognitive load for your customers)

One brand that’s known to clearly communicate the advantages of joining their loyalty program is Ikea

Ikea clearly states he benefits of joining their loyalty program

13. Make it easy for shoppers to share authentic feedback

One way to increase trust in your customers is to make it easy for them to share feedback about their browsing/ buying experience. 

With shoppers already trusting you, you’ll need to spend much less in gaining their confidence in your brand in the first place. 

There are a number of ways you can make this possible:

- By introducing a separate feedback widget ( this way you’re able to collect a lot more information on the reasons behind drop-offs. You could bring in subsections like on-site experience & customer service experience etc.)

- By featuring a feedback link on your live chat feature (this can create more ease and transparency for customers looking to give feedback right away, without going through a separate long-winded live chat conversation)

- By running a 24/7 real-time customer support helpline or chat feature (this can enable you to lose less time reverting to customers’ grievances)

Amora Coffee highlights their 24/7 support for customers. 

Amora Coffee offers information about their 24/7 customer support helpline on their eCommerce website

14. Create the right target personas (ensure you’re selling to the right audience)

While everyone would love to sell everywhere and to everyone, having a really broad target audience shoots up your CAC in the long run.

Your conversion rate may also seem very low – because you’re trying to sell to a market size that’s too large. 

This is why coming up with the right target personas within your target audience becomes so crucial.

Here’s a quick checklist of to-dos:

- Track the campaigns you run closely (tracking can help you see how your target market is evolving in terms of preferences & behaviors)

- Create a target persona document (it needs to carry region, demographic, occupation, goals, motivations, lifestyle preferences, challenges etc.)

- Find the right channels to connect with your target audience (Open up your Google Analytics and check out the top sources of traffic: Acquisition > All Traffic > Source / Medium)

- Analyze which channels are driving the maximum conversions (take note of what’s working, who are buying and why they’re likely buying from you etc.)

Here's a super relevant read: The Founder's Guide to Customer Journey Map (eCommerce)

15. Introduce video content through inexpensive formats

87% video marketers have revealed that their efforts through this medium have brought them positive ROI. 

So, using video content can be beneficial if you’re trying to reach out to more people while spending less in securing their interest to buy. 

Here are a few aspects you need to pay attention to while leveraging video:

- Use a snackable format (we’d say something like YouTube Shorts works well because you can highlight only the most important features/ benefits/ uses of a product – it cuts out a lot of information clutter customers are otherwise exposed to)

- Keep the length short (anything around a minute and a half or less has shown to engage shoppers and impact their choices – with mobile phone technology becoming so evolved, it’s possible to shoot effective short videos through this medium)

- Use customer shot videos (while not as slick as professionally shot videos, UGC videos often convey the real-time experience around a product)

- Explore various kinds of topics (from new launches to the styling/uses of a product to boxing/unboxing, the more variety you have, the more value you could drive through video)

Take the example of TruWood Watches – known for their iconic wooden watches, TruWood mostly keeps their videos around 30 seconds long. 

However, on their YouTube Channel the brand ensures a featured video on the BTS making of a wooden watch, which autoplays. 

TruWood Watches showcases a BTS video on their YouTube channel to create awareness
Want more video inspiration? Check out: eCommerce product videos: 30 brand examples to learn from

16. Don't splurge on influencers (look inward)

Experts have already predicted that micro influencers will continue to aid the growth of brands that want to grow authentically in the eyes of their customers. 

If you run a small to mid-sized brand, what can bring you the best traction is engaged customers.

And micro influencers from your own customer base may have greater power to achieve this. 

The reason is simple: they’re likely to be closer to your target audience in their social status and would be more easily related with and believed. 

One brand that has leveraged the power of micro influencers to the hilt is ASOS

Through their Insiders Influencer program, the brand handpicks stylish people from their own customer base – and features their visuals & tips for customers around the world. 

ASOS uses content generated by their own network of micro influencers

17. Prevent cart abandonment (focus on solving it like a mad scientist)

It’s not news that the amount a business has to spend on acquiring new customers is 6 to 7 times more than retaining the ones that exist. 

This makes a cart abandonment strategy a need of the hour. 

The cart abandonment rate across industries in eCommerce is almost 70%

Here are a few considerations you’ll have to think of while coming up with a cart abandonment strategy:

- Assess what additional costs are necessary (off a cost split-up in the cart itself and if you can’t offer free shipping across the board, look at an attractive free shipping threshold) 

- Clarify shipping charges & other details (feature a shipping charge calculator by the delivery partner so that customers can key in their location and find the exact shipping charges. In case of different expedited and standard shipping rates, mention them)

Here’s an example of how clearly Nordstrom declares shipping details in their cart page:

Nordstrom clearly states all shipping details to help customers avoid confusion

- State your return & refund conditions with zero ambiguity (this includes the return window, steps to return the product, under what conditions you’ll release a full refund etc.)

- Make checking out super simple (if it’s a return customer, see if you can make it possible in just a couple of clicks without needing re-entering of information etc. even for a first time customer ensure only the most necessary form fields are mentioned and all other distractions are removed)

- Introduce email follow-ups without being intrusive (talk about the products in the cart, offer a discount if necessary etc.)

Want deeper insights? Read: Prevent Shopify Cart and Checkout Abandonment: 24 Tested Ideas

18. Collaborate with other brands (always look out for strategic opportunities)

Amplifying brand presence and awareness is one way to ensure more potential customers get to know about a brand. 

To keep customer acquisition costs low, it’s ideal for one brand to stop stretching its resources and opt for a strategic brand collaboration instead. 

Here are a few ways to make eCommerce brand collabs a reality and success:

- Align on values and objectives (the more aligned two brands are in how they’re seen by the world, the better it – this way, the collab won’t look forced)

- Assess the customer base that each brand brings (while assessing the outcome of the collaboration, it’s important to understand which parts of the customer base you’ll be precisely targeting)

- Find a strategic topic/event to collaborate on (it could be a specific calendar day, a cultural milestone or a seasonal highlight that the collaboration will revolve around)

- Use appropriate channels to spread the word (social media, PR, advertising, shares through micro influencers etc. – be clear about the channels that’ll help you gain the traction you need)

Two brands that have successfully collaborated in the past are Warby Parker and Arby’s, the famous sandwich shop. 

To mark April Fool’s Day in 2018, they launched the WArby Collection – and this enabled customers to buy Arby themed goodies like T-shirts and sunglasses from Warby Parker, 

Meanwhile, Arby’s featured the WArby logo across their food packaging – with some boxes carrying the label “onion ring monocle”. 

Warby Parker and Arby collaboration strategically tapped into both brands' customer bases

19. Don’t just send drip emails – make them inspiring

According to a study a while ago, 61% shoppers liked the fact they received promotional emails weekly from brands. 

However, times have changed and with almost every business sending out email communication, most customers feel less and less convinced about them – all the reason why YOU need to make them feel like they WANT TO ACT. 

This is why setting up an automated drip email campaign with carefully crafted messaging can help you nurture both existing and potential customers. 

Here are a few key considerations:

- Assess the intent with which you’re setting the campaign (is it to nudge customers towards a new product launch or reminding them to checkout with products left back in the cart?)

- Make the introductory email trustworthy (so ensure the copy is welcoming and you’re using certain supporting factors like social proof, how many people have already bought from a particular product range etc.)

- Offer incentives if you want the customer to act fast (for example, if you’re trying for them to close the checkout process, you may want to declare a limited-time discount)

- Offer alternate suggestions to improve brand awareness (if you’re nudging customers look at certain products, you might as well introduce another section on alternate suggestions saying “try these instead”)

One brand that’s known to create inspiring drip emails is Patagonia. 

Here’s an example of one of their newsletter sign-up welcome emails. 

(Pay special attention to the aspects they’ve highlighted through the copy.)

Patagonia uses information strategically in their email campaigns
More food for thought: 15 amazing drip email campaigns that actually drive sales

20. Bring in UGC to reduce the cost of Facebook ads

Compared to other forms of promotional communication, UGC certainly has more influence on the purchase decisions of buyers.  

In fact, more than 93% of buyers think UGC is crucial in helping them make buying decisions. 

You may want to look at introducing the UGC factor into your FB ads. 

It’s been proven that this leads to:

  • 50% lesser cost per acquisition
  • 50% lesser cost per click
  • 300% higher click-through rate

Here are a few things you could do to make your UGC led FB ad strategy work better:

- Use a filtering system to cull out the most relevant UGC material

- Alongside FB ads, feature the same UGC across your product pages (for better recall)

21. Create a niche vertical in your existing business

More niche companies are seeing slower CAC growth as compared to only five years ago.

research shows niche segments can reduce customer acquisition costs in eCommerce

Since most small and mid-sized eCommerce establishments can’t sway the competition of international mammoths like Amazon, it makes sense to find niches in your current business. 

Here are a few key considerations you may want to look at:

- Use the Google Keyword Planner to focus on decently searched keywords (very high volumes would mean higher competition)

- Round up niches that are aligned with your current business 

- Find out problems you’d like to solve (given you already have a business, you’re already solving some problems – see what else aligns with your current offerings)

- Perform a competitive analysis (assess what both primary & secondary competitors are doing – and what you’d need to widen into a new niche)

- Figure out pricing and margins (considering niches that will give you less than 20% margins can become burdensome on your bottom line in the long run)

22. Monitor your retargeting campaigns closely

Most advertisers update their retargeting campaign only once: when setting it up.

You have to continually optimize the campaign and remove customers who have already converted.

Why? Because they’re no longer interested. They’ve made the sale and completed the action.

Here are a few things you could do to keep your retargeting campaigns effective:

- Remove the customers who have already checked out in regular intervals (Do it on a 7 - 14 day basis, and it’ll go a long way in helping you make the most of your marketing dollars)

- Add converted customers to another retargeting campaign (one that encourages upselling, cross-selling, or even downselling)

- Leverage event-based retargeting (for example, a product that was out of stock becomes available – retarget those who recently purchased products just like this one)

- Analyze customer objections as you retarget (for example, some customers might be abandoning the journey after getting confused between two similar products – see if you can retarget with clarifying information)

Here's a valuable read: 20 behavioral targeting ideas for 2023 (+ some inspiration)

23. Invest more time in creating valuable gated content

When an eCommerce business offers valuable gated content, it’s a win-win scenario:

The business potentially gets access to many more new leads and potential customers. 

The customers find more reasons in continuing to engage with the brand. 

Here are a few key considerations if you do decide to feature gated content:

- Assess conversion rates to take next steps (pages where conversion rates are already poor, gated content may not work – however look at where shoppers are converting more often and check what kind of gated content could work)

- Consider what content can be repurposed (if you’ve already noticed shoppers expressing interest in certain kinds of content, you may want to repurpose parts of it by deepening research, introducing more insights etc.)

Here's a read you'll find relevant: Gated content: 8 do’s & don’ts that ecommerce founders must know

24. Optimize your A/B split tests by avoiding crucial mistakes

A/B tests aren't one and done efforts. It requires constant revisits. 


During the acquisition phase of any sales journey, the first couple of touchpoints are crucial in getting the visitor interested hooked to your brand.

This in turn will make the later sales stages much easier and require less investment.

Here are a few split test mistakes you may want to avoid:

- Running too many split tests at the same time (too many assets being tested at the same time can create results that are difficult to interpret and come to conclusions about)

- Running a test for a short time and then giving up (there’s a reason why they talk about achieving the 95% confidence rate in A/B testing – how long you will need to run a test will depend largely on the results you expect to see)

- Changing parameters in the middle of the test (parameters include the amount of traffic that is being observed, other variants to the original list on which the test is being performed, split testing goals being altered from the original plan etc.)

25. Use targeted CRO techniques to make your digital touchpoints more seamless

Unique visitors aren’t worth much if your funnel isn’t converting traffic into profit, and there’s no point in spending all those dollars acquiring customers if it doesn’t translate into revenue.

That’s exactly why CRO is crucial. 

Here are a few ways CRO can make your digital touchpoints more seamless:

- By improving functionality, usability and accessibility of your eCommerce website

- By breaking your customer journeys into acquisition and retention touchpoints

- By applying scientific strategies like behavioral principles into optimizing various touchpoints 

However, CRO is a complex world of data and analytics that requires a thorough understanding of user behavior, statistics, and UX — one that’s best to do with external expertise.

If you've been thinking seriously about CRO, you've got to read this.

FAQs about Customer Acquisition Cost

1. What is eCommerce customer acquisition cost (CAC)?

To put it very simply, it's the cost of acquiring every new customer.

It paints a picture of how effective your marketing efforts are and what kind of traction it can bring.

More importantly, it gives an idea of the probable profitability and investment requirement you would need to grow your business.

So the lower the customer acquisition cost, the better the profit, the longer you last and the more you grow. 

2. How do you calculate CAC?

To calculate the CAC for your eCommerce business, follow this formula: 

how to calculate customer acquisition cost in eCommerce

To calculate the total sales & marketing costs, here are some of the items to consider: 

  • Advertising costs
  • Cost of your marketing team
  • Cost of your sales team
  • Creative costs
  • Technical costs
  • Publishing costs
  • Production costs
  • Inventory upkeep

3. What makes a good CAC?

While this wildly varies based on the industry you’re in, in eCommerce it is directly decided by how good your AOV is.

Let’s say you have a low CAC but also a low AOV - in this case, it’ll be tough to label your CAC as good because the ROI might be quite low as well. 

This is the main reason why many eCommerce businesses now choose to benchmark their CAC against their CLV.

In this regard, a commonly accepted CAC:CLV ratio of 1:3 is considered good but it’s always relevant to go deeper into researching your industry and category for finding more precise answers. 

4. What factors affect costs around customer acquisitions?

There are various factors that have a direct bearing on customer acquisition costs, including:

- CLV: The lifetime value of a customer has a direct impact on the cost in acquiring them.

If the CAC is high but the CLV is higher it indicates a higher chance of profit making.

It’s mostly agreed that if a company’s CLV is 3 times its CAC, then its bottom line will be impacted positively. 

- Customer success costs: These typically include COGS and spends on sales & marketing.

Cost of Goods Sold (COGS) implies the cost a company incurs to creating, delivering and innovating on a product.

Spending on sales & marketing ensures potential customers get to know about a brand, its products, its offers, its improvements and also why they should buy from them.

Typically, increased customer success costs indicate a higher CAC. 

- Customer churn: When the customer churn rate of a business is high, it shows that within a given period, more customers are stopping purchases and closing down their accounts.

This can also suggest that the CAC has been high, especially if their lifetime value has been low.

This is why it’s significant for a business to onboard more new customers during a given period than lose old ones.

5. What are the ways to increase CLV to make up for CAC?

It’s a given that it won’t always be possible to reduce CAC.

So along with attempting to reduce CAC, it might be worthwhile to increase CLV - or the total amount you earn from a customer over time.

Here are five steps you can take to increase CLV while making your CAC reducing efforts:

- Offer exciting incentives

After all, brand loyalty and product quality won’t always inspire customers to part with that extra buck.

However, well-timed discounts, free products and exclusively personalized offers can create that impetus in them. 

- Ensure consistent customer support across channels

In an increasingly omnichannel existence, you’ll need to anticipate customer anxieties before they actually happen.

One easy way to do this is to combine human and AI capabilities to create seamless customer support. 

- Focus on creating high quality content

Yes, the idea is to make your customers buy more but also to remember that they especially will if they’re convinced you care.

Make your content brand-aligned, awareness-generating and genuinely oriented to solve very specific problems. 

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