Do you feel like your customer acquisition cost (cac) is too high? You are not alone. The cost of acquiring new customers has risen by more than 50% in the past five years. The reason behind such a sharp increase is the fact that consumers are losing trust in ads and traditional channels of marketing. In as much as technological advancements have brought much efficiency in the business arena, they are majorly to blame for the business trust erosion. There rise of the internet in the recent past has brought lots of information in front of the consumers. Unfortunately, only a little fraction of the information is factual and worthy of trust. Consequently, the targeted customers feel taken for a ride. They no longer trust businesses easily.
High CAC and reliance on ads can kill a startup
According to Hubspot Research Trust Survey conducted in 2018, 55% of the customers who participated in the survey said that they don’t trust the companies they buy products or services from, as they used to. This is an indication that businesses have to do more to win trust from their target customers. They need to spend more resources on their marketing strategies to stay afloat and grow.
Things are even harder for startup businesses. How do you convince a customer who has at one time bought a contraband product posed as authentic that you are different from the quack seller? You can use the most eloquent, most convincing and the smartest salespeople or most viral ads, but still find yourself struggling to gain a reasonable customer base. In fact, the survey by Hubspot shows that 65% of its respondents don’t trust business advertisements while 71% of them don’t trust sponsored social media ads.
Therefore, if you solely focus on sponsored ads to increase your brand, business or product awareness, you might end up spending huge chunks of money on the marketing strategy and still fail to get the desired results.
Unfortunately, high customer acquisition cost (CAC) can kill your business , especially if the customers that you get don’t generate consistent and long-term revenue. This is because your return on investment (ROI) will be low and at some point, it may not be sufficient to keep the business running.
Organic and sustainable growth is paramount
Don’t throw in the towel yet, even if you are feeling like your business is sinking due to high CAC. You can still salvage it by cutting on the amount you spend on customer acquisition. The best way for reducing your CAC is to focus on the organic growth of your business. You can achieve this by enhancing the business’ internal sales to increase its output. This can often take place by making each and every customer touchpoint a shareable moment.
Although there’s no single formula for the generation of organic growth, virality has been reported by many businesses from various sectors and industries as one of the best approaches. Virality is the tendency of a piece of information/content to be spread rapidly as people communicate. While making something go viral is difficult to achieve, shareability is something that’s easier to implement. For users to start sharing your product or services online, you need to provide them with a great experience filled with shareable moments. This could be providing them with shareable badges, achievements or even quotes.
Use your existing customers well to drive down CAC
People trust people. Your customers can make or break your business, depending on the level of satisfaction your business provides them. You treat them well and they reciprocate with gratitude and loyalty. Otherwise, your reputation will be at stake.
Your potential clients are more likely to trust their friends and family members who’ve had an experience with your product or business than your marketing representatives, commercial ads, your assertions about it or any other information on the web regarding it. Therefore, you should take anything they say about you very seriously.
It is not only important to ensure that you do your best to satisfy the needs of your customers, but also get them to talk about your brand experience on social media. Their feedback can bring lots of referrals that could see your conversion rate hit levels you’ve never imagined of. For that to happen you need to provide your community with opportunities and tools to talk about you with their friends and family online.
Although social media is vast, your presence should not miss on Instagram. It is like everybody, including your existing and potential customers, is on the platform. So, you have million-dollar opportunities to exploit there.
Pukket Is Ready To Help You!
It has never been easier to identify, evaluate and reward customer advocacy at scale. Pukket’s will automatically take care of all those tasks for you to reward your customers (or employees) for their advocacy. This is often called community marketing. Your community of customers and employees are four times more likely to share their opinion about your brand if they are rewarded in return.
Pukket is the perfect social rewards platform, enabling you to encourage your community to start sharing their related experiences on social media. On that note, Pukket is set to walk with you until you get the desired results. Together we’ll encourage people who’ve used your products or services to share their experiences and increase awareness about your brand.
Forget the costly influencers. Work with Pukket to achieve higher customer loyalty without breaking the bank for organic and sustainable business growth. Click here for more details about our product.