5 Ways to Reduce Customer Acquisition Costs: Use an Investment Mindset
Investors live and die by the saying “you get in what you put out”. Investing is all about putting time, energy and resources into something in order to profit in the future. It’s the little things you can do now that will add up to the huge success down the road. Knowing customer acquisition is an investment is the key to doing it right and reducing the cost of getting new customers.
Below we mention five ways to reduce your customer acquisition costs. But keep in mind that it will take time to achieve an impressive CAC (customer acquisition cost).
1. Think Long-Term: Invest in Planning
We are often compelled to only think short-term. There are times you can't afford to think beyond the week, month or quarter. For anyone that wants customers (and everyone does), this should be an exception, not the rule. Too much short-term planning is a guaranteed disaster. Whether it's cashflow, hiring, marketing or sales, you need to look down the road. All the way down that long, long road.
What you need is a long-term plan to get and keep customers. Create a plan that covers:
- How you'll contact customers initially and keep in contact over the months and years.
- How you'll please them time and time again.
- How you'll deal with the inevitable times you displease them.
- How you'll measure success.
- What your goals are for weeks, months, quarters and years (so you can measure them).
Most of this may be obvious, but there's one thing long-term planning gives you that's often missed - synergy. As marketing campaigns build up, call-back plans can be measured and improved. Your relationship with customers is developed over time. As you carry out a well-executed long-term campaign to get customers, all the moving parts play off of each other and the results improve.
This synergy is like a good return on a stock investment. When reinvested, it generates even more returns. Best of all, since you're thinking long-term, you can evaluate your short-term plans and see how they're working (or not working).
2. Partner: Invest in Allies
Many hands make light work. So team up with people who want similar customers (or a resource you have) and pool your efforts. You could try:
- Guest posting on each other's blogs.
- Establishing sound marketing partnerships.
- Having mutual deals on your products or services.
- Sharing resources.
Share your efforts, save money and time, and get more results.
There are a lot of people and businesses out there right now who want more customers, and whom you can team up with. Do it. Every partner vastly expands your ability to reach customers, some of which you may have never thought of.
Best of all, each partner also brings you a new ally. Your partners will expose you to new ideas, new talent, potential breaks on services or goods, and more. They might even become customers at some point.
It's a good investment and good synergy.
You're probably getting tired of the words "investment" and "synergy" by now, but they fit and I really don't want to sound like a thesaurus.
3. Recommendations: Invest in Relationships
Your new customers want to know why they should trust you, and your honest face and good deals aren't always a good enough reason. Who do they trust? They trust people like them.
They trust other customers.
This is why you ask for recommendations. They're free, they're fast, and they're very, very effective. They're also not leveraged nearly enough by businesses.
Simply check in with your customers and see if they know anyone else that needs your business. It doesn't hurt anyone, it maintains relationships, and maybe you can slip in a good deal or discount to show goodwill. For almost no cost (well, beyond that deal) and just a little bit of time, you get some new customers.
Also, don't forget general recommendations. Ask if you can mention a pleased customer on your website, blog or in marketing material. If they go for it, it only cost you an email and the time it took to publish. The power of those little blurbs of text is incomparable because they are outright testimonials about how good you are. Having someone publicly back you is priceless.
All that time you invested to make them happy returns in connections and new customers.
4. Customer Retention: Invest in Support
One of the cheapest ways to get a customer is to not lose one.
An annoyed customer who stops using your business is bad enough, but it usually doesn't end there. They're not going to recommend you to people. They might even badmouth you to friends or on their blog. There might be annoyed tweets or even an embarrassing moment when they pull their proud announcement of your new product from their blog.
The loss of a customer spreads like a disease and robs you of some of the customers you could have acquired. Annoying a customer is like a bizarre investment. It’s obviously the complete opposite of what you want.
So one of the most cost-effective methods of getting new customers is to not go losing customers you already have.
- Have good customer contact so you can build good relationships.
- Have good support. It doesn't take much to go and open an account at www.zendesk.com or setup some Salesforce triggers.
- Monitor and respond to social media inquiries.
- Prevent problems before they start. Alert customers about issues, bugs, updates, outages, etc.
Good customers are a source of continued business and new customers. Annoyed customers are the reverse and you will pay for it dearly. Decide what you're going to do before it comes up.
5. Customer Partnerships: Invest in Your Customers
Those top customers you have? Team up with them on product development and marketing endeavors. Invite them to company picnics, host events at local shows, whatever. Just get out there and work with them.
By partnering with your customers on anything you can, you're able to:
- Retain their business through good relationships.
- Get your name out there.
- Show your goodwill and get more recommendations.
- Become associated with relatable humans (and not forgotten corporate masks).
- Build relationships with potential customers.
You do all of this while retaining their business. Sounds like a good - yes, I'm going to say it - investment.
Customers are partners anyway. By acknowledging it and working together, you bring together all the advantages of partnering, customer retention and customer recommendations. This is the ultimate combination of the other four points. It’s the ultimate investment: long-term, thoughtful customer partnerships.
When you put the time and money into a customer partnership, it can result in the ultimate payoff. Think how many past business successes resulted from good partnerships (almost all of them). That’s something you want to aim for!
Also, it's cost-effective. One good, well-maintained contact pays off for everyone. It can all start with a 15-minute call from one of your salespeople and it can define your business forever.
That's the advice we here at Onboardly give. Drop all the short-term thinking and spreadsheet-diddling. Think about how all of the moving parts work together, and make a real investment in customer acquisition.