💬 The pursuit of continually optimising and finding ways to reduce CAC is the aim of the game in the land of eCommerce.
As eCommerce marketers/founders, we know the importance of reducing CAC to help improve scale potential. Main areas of importance that I think/remind clients often...
The list goes positives goes on... (I don't need to go into greater detail - you most likely know already :)).
I created this CAC checklist with some of the top initiatives/tactics I've used/seen over the years - I've also stated reasons why from personal experience working with numerous brands (and what I've seen top brands do) over the years. :)
Before diving in to the rest of the points I make, achieving a good overall CAC which is consistent and reducing overtime does come down to ensuring you are bringing in the right traffic in the first place via your key channel sources.
- This includes ensuring targeting (especially cold audiences) are well-defined and make sense for your business/category/product.
- It may seem a somewhat obvious point here, but bad traffic leads to overall poor conv. rates, which in turn leads to CAC potentially blowing out.
- Similar to the above points I made, you need to check your analytics via GA/Shopify (or whatever tools/CMS you use), and see the performance of your landing pages, key product pages, and overall paths of how people check out.
- You need to try and aim for a conv. rate of around ~3% - this is at least a standard average.
- Some pages/flows will perform better than others - it just comes down to whether or not they're you're top performing products/categories.
- Another key factor that plays a role in good conversion rates, which I touched on above, are good quality traffic sources - which includes paid traffic and organic (intent-based) searches. Naturally, if you bring in traffic audiences which aren't the right quality, this is going to affect your overall results.
- Naturally, new audience that come across your brand aren't going to convert from the first browser session. So that's why you need to really dial in on your remarketing strategy across email flows and ads.
- The good part of this strategy is that you're leveraging low-cost channels - well, email is free, and remarketing, especially when setup right and triggering ads at the right time, is also an affordable activity.
- Plus use pop-ups, notification and other methods to engage them through email - the goal here is to capture an email, as there's a lot you can do when it comes to behavioural targeting.
- Most of you reading this (especially if you're on Shopify), would be using Klaviyo, or a similar ESP which has a good integration. You can easily setup custom automated behavioural flows based on certain activity. You can then also setup Facebook Ads integration with Klaviyo/Shopify to highlight key messaging themes along the journey until they convert.
Ensure to have a really good welcome series (and prompt engagement along the journey).
- Speaks for itself, but all eComm stores need to have a cart abandonment strategy in place. Yet, many stores just do 1-2 emails within 48 hours as "reminders" and call it a day.
- Rather than just sending 1-2 reminder emails (and assuming they haven't unsubcribed), send emails that personalise potential barriers, such as social proof, typical Q&As, and even shipping.
- To take it further, consider doing personalised, plain-text emails to give them a "personalised" offer (this can work pretty well)
- I personally believe many stores don't utilise good upsell UX strategies enough.
- I'm a big fan of 1-click experiences and there are many solutions that can help with this (many on the Shopify App Store)- Focus on providing top-rated products and most popular SKUs.
- As a recommendation for upsells, you can do both 1-click upsells either before AND/OR after checkout. I recommend testing both out, as long as not too intrusive on the customer experience.
- Alongside implementing 1-click upsell experiences are also cross-selling strategies, such as product recommendation embeds, "frequently bought together", and others.
- First, I'll touch on bundles. They're awesome for highlighting great value (everyone loves a good deal when they see one). - Especially for first-time customers, one of my favourite strategies are starter/welcome kits, which work a treat. If it doesn't make contextual sense for your business offering, certainly consider doing a "welcome" bundle strategy or special offer.
- When it comes to free-shipping thresholds, it's one of my top recommend strategies for CRO and AOV.
- In simple terms, it's when visitors are recommend complementary/related products that can they quickly add to their cart, and qualify for free shipping.
- A great example is an app called Aftersell, which makes it super easy for you to implement a cart experience, which highlights what the user has added, and then highlights other related or complementary products they can add - it's super slick and love the UX.
- Affiliate strategies are a "hot" new strategy I believe now for eCommerce brands, especially in a digital world where advertising costs are getting more expensive
- It's a powerful strategy, when combined with a good influencer strategy, that can really catapult more quality audiences.
- Plus, the traffic in most cases is good quality, as traffic is coming on behalf of those who want to recommend your products (and have done the selling for you from a more 'neutral' angle).
- I touched on this above, but brands/influencer collabs are already heavily used as a strategy by many brands, and it's going to become so even more. - The simple reason why is that it works - especially through creating UGC-style content videos such as IG/TikTok.
- Another key reason why it works well is that brands/influencers can leverage off each other's audiences for greater reach and sales/commissions - it's a win-win for both sides.
- Referral programs are something that is critical that most stores should have (as long as price and offer makes sense). - The reason why I love referral programs so much is because of the customer behaviour flow - people who love (or at the very least interested) in your products, want to refer their friends, and receive an offer.
- Naturally, the cost of acquire a customer through an offer through a free channel such as referrals, typically is lower than the cost of acquisition through channels like paid media ads.
- Typically, I recommend stores to do two-sided referral programs - where both referrers and the referred are incentivised.
- Loyalty/rewards programs are great and should be implemented (if you haven't already got one). - The good news as well is that in the past they used to be quite difficult to setup, but now there are so many good 3rd-party solutions (which are also quite cost-effective) which can save you a lot of time.
- Having rewards/points system in place can really help motivate customers to purchase time and time again, which in turn increases LTV, and bring down the initial CAC you paid to acquire them in the first place.
- When this happens at scale, you really start to see a material difference.
- The last point I'm making here in many ways relates to what I said earlier with remarketing audiences, however, this matters across the board when it comes to audiences.
- Get granular around segmenting and understand how your customers/visitors interact with your business.
- When you get really confident, it can help immensely with creating new products, improving offers, new messaging across the CX, and so much more.
