What is CAC and how to decrease it? See 5 tips!

Customer Acquisition Cost

What is CAC?

Summary

  1. Customer Acquisition Cost: After all, what is CAC?
    • Now that you know what CAC is, let’s calculate it?
  2. You can reduce your company’s CAC
    • Inbound Marketing: invest in quality content
    • Know your customer well
    • Loyalty is important
    • Good strategies: planning and measuring results
    • Use a sales CRM that really helps you

Understanding what CAC is and reducing the so-called Customer Acquisition Cost is a goal that your company needs to pursue at all times. After all, you agree that the ideal scenario for any company is to sell more and spend less, correct?

The fact is that reducing the cost of acquiring customers is essential for your business to grow and your company to develop in a sustainable way. That’s why it’s so important that your team is aware of this factor (is it?).

Otherwise this article is perfect for you. In it, we’ll talk about what CAC is, how to calculate and optimize it, and how a sales CRM is a valuable ally in the mission to reduce it within your company.

Come on?

Good reading!

Customer Acquisition Cost: After all, what is CAC?

It is the cost that your company has to attract new customers. It is the average of investments made directly in the task of attracting these buyers. In this, it is especially taken into account how much is spent on the marketing and sales team – which are usually the sectors that manage to prospect leads to be converted into new sales. But, of course, this varies from company to company.

You, understanding what CAC is, you need to take into account many aspects, such as

  • Salary and commission of your sales, marketing and/or other team;
  • Monthly cost of software such as CRM and Marketing Automation;
  • Spending on online or offline media to attract leads;
  • Between others;

You, knowing the reality of your company well, know better than anyone what costs go into this account, right?

Now that you know what CAC is, let’s calculate it?

In order to calculate the cost of acquiring a customer, you need to know how many customers enter your base per month – consider not only those who have already purchased your product or service, but also newly generated leads.

Taking into account the expenses mentioned above, we can make a reasonably simple calculation. Add up all the expenses and divide by the amount of new customers obtained in a given period (it could be a month or a bimester, for example).

Speaking of numbers, let’s say you got 500 new customers in a two-month period. Its expense in these 60 days was 6 thousand reais. So it’s easy: Divide 6,000 by 500 and you’ll know your company’s CAC.

How do you know if your CAC is high or low?

Overall, you can see if your customer acquisition cost is too high and your business model isn’t working when your CAC exceeds your company’s Life Time Value (LTV) . The first must necessarily be much smaller than the second.

You can reduce your company’s CAC

Selling more and better and reducing costs is what you’re after for your company right now. That’s why you understand that reducing the cost of acquiring customers is important. However, for this to happen, adjustments and improvements in the day-to-day practices of their businesses are necessary. That’s why we’ve separated below 5 tips for those who want to remain competitive in the segment in which they operate.

What is CAC?

1 – Inbound Marketing: invest in quality content

Betting on content marketing is essential for companies in several aspects. Anyone who invests in quality content – ​​whether on a blog or website – that delivers answers and/or solutions to potential customers’ pains becomes a reference in the area in which they operate. Building credibility is fundamental for the potential customer to end up trusting your brand and, ultimately, purchasing your product or service.

From there, with the correct use of SEO , with a well-optimized content, you increase the organic reach of your content, as a result of your brand, and thus attract flow into your site. The result? Leads . The cost of this? Zero.

For this mission, however, it is necessary to know who you are writing for, if the content created is really meeting the pains of your target audience.

In fact, in addition to mastering the meaning of what CAC is, do you really know your client?

2 – Know your customer well

It may seem obvious and you will say “yes, of course I know my client”, but the reality is not always what it seems. To optimize your CAC you need to have “on the tip of your tongue” who your customer is, what he needs and why he is looking for a particular good or service, for example. In this way, it is possible to understand their behavior during the buyer’s journey and distribute relevant content for each step of the sales funnel .

Knowing well who your audience is and also where it is, you can channel your investment in online media, directing you to the correct social network with the proper segmentation.

3 – Loyalty is important

One of the main strategies to reduce CAC by companies is to retain customers. Strong customer management, in addition to keeping them within your business, ensure indications for future opportunities. This, of course, will benefit your average ticket and, consequently, your LTV which, as mentioned above, is directly linked to your company’s customer acquisition cost.

4 – Good strategies: planning and measuring results

When we talk about sales, any detail can be decisive for the lead to become a customer. That is why it is vital to plan before executing and measure the results obtained to know what can and cannot be done anymore.

Test. Text, layout, approach, sales technique, everything possible. Document, record what went right. Knowing what works, you know your customers better, act assertively and, of course, lower costs.

5 – Use a sales CRM that really helps you

Does your sales CRM help you reduce CAC? If not, you’d better rethink it. A good CRM provides vital data for that mission.

It gives information about the current customer base so you can target, for example. You can also customize marketing actions for an audience that will be interested in what you’re selling.

In addition to periodic reports to monitor the indicators of your teams, it is essential to have both the record of trading history.

You have features like  You Can Book Me-style public calendar  for that. With these actions, you will have the time of your commercial team, which will be able to worry about what really matters: selling more.

So, now that you know what CAC is, let’s reduce it?

Be sure to read our article that talks about the importance of CAC and LTV in your business and another that discusses how to reduce costs within companies.

To have a sales CRM that helps you reduce your customer acquisition cost, talk to a consultant right now .

To the next!

A hug from PipeRun, your sales CRM. #RunPipeRun

 

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