How to Decrease Your Customer Acquisition Costs (CAC) In 2024

Every ecommerce business knows the importance of acquiring new customers, but not everyone keeps a close eye on what it costs to do so. Customer Acquisition Costs (CAC) can quickly spiral out of control, especially considering how competitive the market is. And keeping your CAC in check isn’t just about saving money—it’s about making sure your business remains profitable and can continue to grow sustainably. 

But how can you do this? There are two ways:

• You can work on reducing your paid ad costs. This will involve optimizing your targeting, personalizing your post-ad click journey, and increasing your Conversion Rate (CVR).
• Exploring alternative customer acquisition methods beyond paid ads.

Let's take a look at the what and how of both these strategies to get your acquisition cost under control.

Strategy 1: Increase CVR in the post-click experience

So, you’ve spent money to get people to your site—now what? If they don’t convert, everything is a waste. Increasing your CVR in the post-click experience is a guaranteed way to make your ad spend go further. 

Here are a few tips to increase CVR in the post-click experience: 

• Use a clean, uncluttered design that guides users toward the desired action. 
• Minimize fields in the checkout form to keep the process easy. You can implement an auto-complete feature to make the process more convenient. 
• Tailor the experience according to the segment’s browsing patterns for better personalization. For example, if a user has shown interest in a specific product ad, make sure their post-click experience highlights that category and shows similar products to them. 
• Design specific landing pages for different ad campaigns and traffic sources, ensuring that post-click messaging aligns closely with user expectations.

For instance, with FERMÀT, you can personalize the post-click experience, and choose what products, collections, and discounts are offered for specific segments, leading to higher conversion and lower CAC. 

Strategy 2: Turn your buyers into affiliates for predictable costs

One of the most effective ways to control your CAC is to turn your existing customers into affiliates. This approach gives you the advantage of predictable acquisition costs, as you only pay commissions for actual sales. 

Plus, your customers referring your brand to their peers works as social proof and lowers your reliability on paid ads.

Often, businesses miss out on this opportunity simply because they don’t have a streamlined process. With Social Snowball, you can easily achieve this by enabling the "turn your customers into affiliates" toggle button on the dashboard. Now, every time someone makes a purchase, they’re automatically enrolled in your affiliate program.

Here are some other ways this strategy helps you:

Set your own commission rates

You can manage your affiliate costs and keep them predictable by setting commission rates that align with your business strategy. This flexibility allows you to control how much you spend on customer acquisition, ensuring it makes sense for your business at any given time.

Save your links from coupon leaks

A significant challenge in affiliate marketing is fraud, particularly code leaks. It can spiral out of control quickly, leading to profit loss and high CAC. 

Social Snowball’s Safelinks feature tackles this problem by generating unique, single-use discount codes and links for each customer who clicks on an affiliate’s link. These links look and function like any other but are designed to be leak-proof, as they can only be used once.

Here's an example of how Safelinks looks:

Tap into the excitement of new customers 

After a customer makes a purchase, you can invite them to become an affiliate right then and there. They’re already engaged with your brand, making this the perfect moment to encourage them to spread the word. Highlight their discount code and the benefits of joining your affiliate program.

Gamify your program with different affiliate tiers

Motivating your affiliates to go the extra mile can sometimes require a little creativity, especially when you want to boost sales without overspending. The key is finding the right incentives that encourage higher performance without breaking the bank. 

One great way to do this is by setting up tiered commission structures. It will make your program more engaging and give affiliates a sense of achievement every time they unlock a tier. 

For instance, with Social Snowball, you can easily create different commission tiers that reward affiliates based on how well they perform. The criteria can be based on the number of sales they’ve generated or the revenue generated through those successful sales. 

Conclusion

With the right tools and strategies, navigating the complexities of client acquisition costs won’t be difficult. Fermat’s highly customizable funnels and Social Snowball’s easy affiliate management features can streamline your customer acquisition process, further cutting down your CAC. Your ads will be precisely targeted and the affiliates and influencers will remain motivated, ensuring all your campaigns hit the bullseye every time!