Cost Per Acquisition tips

Acquiring new customers can​​ be expensive for digital marketers.​ The cost per acquisition (CPA)​ is​​ a critical metric for businesses​​ of all sizes,​ as​​ it directly impacts profitability.​​ A high CPA can eat into your margins and make​​ it difficult​​ to grow your business.

That’s why it’s essential​​ to find ways​​ to reduce your CPA.​ By doing so, you can stretch your marketing budget further, reach more qualified leads, and convert them into paying customers​ at​ a lower cost.

In this article, we’ll share seven simple tips that you can use​​ to reduce your CPA. These tips are easy​​ to implement and can make​​ a big difference​​ in your bottom line.

What​ Is Cost Per Acquisition?

CPA​ is​ a marketing metric that measures the average cost​ of acquiring​ a new customer. To calculate cost per acquisition, divide your total marketing spend​ by the number​ оf new customers acquired during​ a specific period.

For example,​ if you spend $10,000​ оn marketing and acquire 100 new customers, your CPA would​ be $100.

What’s a good CPA? The answer depends on your industry. In the tech space, the average CPA is $182. In travel, however, it’s just $7.

Why​ Is It Important​ to Reduce Your CPA?

There are several reasons why it’s essential​ to reduce your CPA:

  • Improved profitability: When you reduce your CPA, you improve your profitability. This​ is because you’re spending less money​ to acquire each new customer.
  • Increased ROI: Reducing your CPA also increases your return​ оn investment (ROI)​ оn your marketing spend. This​ is because you’re getting more value out​ оf each marketing dollar.
  • Sustainable growth:​ A low CPA makes​ it easier​ to scale your business sustainably. This​ is because you can acquire new customers without breaking the bank.

7 Simple Tips​ to Reduce Your CPA

Now that we’ve covered the basics​ оf CPA, let’s share seven simple tips. Stretch your marketing budget by using these strategies to lower your costs per acquisition and grow your business.

1. Prioritize Your Audience

One​ of the best ways​ to reduce your CPA​ is to focus your marketing efforts​ on​ a niche audience. When you target​ a specific group​ of people, you can create more relevant and effective marketing campaigns. In practice, personalization can cut CPA costs by 50%.

For example, you can tailor your ad copy to resonate with an audience’s pain points. This will lead​ to higher conversion rates and lower CPA.

Take action: Dive deep into demographics, interests, and pain points. Conduct surveys, analyze website traffic, and join relevant online communities to truly understand your ideal customer. You could even try careful negative keyword selections like ‘comparison’ and ‘reviews’ to appeal to potential customers who are still on the fence.

2. Retarget Customers

Bringing back existing customers is often easier and cheaper​ than acquiring new ones. That’s why retargeting​ is such​ a powerful tool for reducing CPA.
You can retarget customers who have abandoned their carts, visited your website but didn’t convert,​ оr signed​ up for your email list but haven’t made​ a purchase using Google ads, Facebook ads, and other online advertising networks.

Take action: Craft personalized email sequences and optimize your ads based on customer behaviour by curating ad groups.

3. Improve Customer Retention

Repeat customers are your best customers. That’s why it’s important​ to focus​ on improving customer retention.​ By providing excellent customer service and offering loyalty programs, you can encourage customers​ to come back for more.

Take action: Reward loyalty with tiered programs offering early access to sales, exclusive product features, or personalized birthday gifts. Go beyond transactions and build genuine relationships through customer success programs or dedicated support channels.

4. Create Content and Assess Effectiveness

Content marketing​ is​ a great way​ to attract new customers, strengthen relationships, and reduce your CPA.

By creating high-quality content that your target audience will find valuable, you can establish yourself​ as​ an expert​ in your industry and build trust with potential customers.

Take action: Analyze content performance beyond just views and click-through rates. Create search terms reports and track conversions, shares, and engagement metrics to identify high-performing topics and formats. Conduct user surveys to get direct feedback on the value your content delivers.

5. A/B Test and Optimize Your Website

Conversion rate optimization (CRO)​ is the process​ of improving your website​ to convert more visitors into customers. One​ of the best ways​ to do this​ is through A/B testing.

A/B testing allows you​ to test different versions​ of your website​ to see which one performs better.

Take action: Don’t limit testing to just headlines, buttons, and landing pages. Experiment with different website layouts, navigation structures, and even checkout processes. Use heatmaps and user recordings to understand where visitors drop off and optimize the conversion journey.

6. Streamline the Sales Funnel

Your sales funnel​ is the process that leads potential customers from awareness​ to purchase.​ If your sales funnel​ is too complex,​ it can discourage customers from converting.​ Streamlining your sales funnel can make​ it easier for customers​ to buy from you.

Take action: Identify unnecessary steps and eliminate friction points. Offer guest checkout options, simplify forms, and provide clear calls to action at every stage. Implement live chat to answer questions, and guide customers through the purchase process. You could also allocate leads a quality score and focus your resources on optimizing and tailoring the sales funnel for those more likely to buy.

7. Take Advantage​ оf Marketing Automation

Marketing automation can help you streamline your marketing efforts and save time.​ By using marketing automation tools, you can automate tasks such​ as email marketing, social media marketing, and lead nurturing. Examples include Mailchimp for email automation, Hootsuite for scheduling and managing posts across various social media platforms, and HubSpot for nurturing leads through the sales funnel.

Take action: Automate repetitive tasks to focus your energy on strategic initiatives like campaign analysis, content creation, and building valuable partnerships.

Reduce Your CPA tо Maximize Your Marketing Budget

By following these seven simple tips, you can reduce your CPA and improve the ROI​ оf your marketing spend. This will allow you​ to stretch your marketing budget further, reach more qualified leads, and convert them into paying customers​ at​ a lower cost.

Remember, reducing your CPA​ is​ a continuous process. It’s important​ to track your results and make adjustments​ to your marketing campaigns​ as needed.​

Unsure which CPA strategies are right for your audience? Schedule a chat with our marketing team today.