Customer Acquisition Cost (CAC) is a marketing and sales metric that indicates the average cost a company has to acquire a new customer. In other words, CAC measures how much it costs to convert a consumer into a customer.
In e-commerce, this is one of the most important metrics, as it allows the manager or owner of the virtual store to draw conclusions about cost reduction and improvement of Marketing and sales processes, among other things.
Then you will learn how to calculate the CAC. In addition, you will know some ways to reduce this cost in your e-commerce. Keep reading and stay in the loop!
HOW TO CALCULATE CUSTOMER ACQUISITION COST?
To calculate the CAC you must use a very simple formula. Just divide the amount of your investment in Marketing and Sales by the number of new customers in a period.
The investment mentioned by the formula can refer to several factors. Professional salaries, sales commissions and training, for example, are included in the account.
In addition, it also includes the rental of software and apps used in the promotion and sales processes, paid and organic media to generate traffic on the website, Digital Marketing resources in general.
Furthermore, the investment includes support and telephony costs, expenses in the product and administrative sectors, among other things. The bigger the company, the bigger the investment.
As an example, let's say your e-commerce company has spent BRL 8.000,00 and obtained 100 new customers in the last month. Thus, dividing 8.000 by 100 we will have a Customer Acquisition Cost of R$ 80,00 in the period.
You can finally set a Key Performance Indicator (KPI) for the next month in order to lower this cost. A KPI is a goal to be achieved over a period of time. Stipulate a KPI and create actions to achieve it.
HOW TO DECREASE THE COST OF ACQUISITION OF CLIENTS IN E-COMMERCE?
To reduce CAC, it is necessary to make your dissemination and sales processes more efficient. The more you do with less resources, the better the CAC. In this context, try performing actions such as:
Improve conversion in your online store
Make your online store faster, because the shorter the loading time , the higher the conversion rate. The layout also greatly influences purchases, so I recommend running A/B tests on your sales pages to find the format that sells most efficiently.
Decrease Churn Rate
Churn rate indicates the percentage of customers who have abandoned their product subscription within a given period. Therefore, you should monitor it to understand the causes of the churn. Then, you can create and implement containment measures.
Reduce cart abandonment
Shopping cart abandonment , that situation where a consumer selects several products in your online store and then decides not to complete the purchase, wastes marketing resources and increases CAC (Customer Acquisition Cost). Just like churn rate, identify the causes and address them.
Improve your sponsored links campaigns
Maximize your sponsored link budget . Create high-quality ads to get a better return. If possible, invest in Performance Marketing , which will allow you to measure the impact of your campaigns and optimize them in real time.
Invest in Inbound Marketing
With Inbound Marketing, it's possible to attract qualified consumers and, in addition, qualify visitors who enter your e-commerce site. Qualifying means preparing consumers for purchases. This process can optimize the conversion rate and reduce your CAC (Customer Acquisition Cost).
Finally, make CAC a metric of your e-commerce. Start measuring this right now. Define a period, which can be monthly, for example, to apply the formula. At the end of each month, do your analysis, draw your conclusions and make the optimizations you can for the following month.
Access and read the post “ 10 Digital Marketing Metrics for You to Monitor ” and, in this way, read a complementary post!
