6 Insider Secrets to Lower Customer Acquisition Costs

Your customer acquisition cost (CAC) is the amount of money your company spends on marketing and sales to acquire a new customer. It’s pretty all-encompassing; to calculate CAC, you include everything from salaries to ad spend to monthly rent to event swag.

Because it covers so much, customer acquisition cost is often one of the first places upper management looks to find cost-saving opportunities. This can be complicated because marketing and sales teams both want (and usually need) significant resources to operate, and the last thing you want to do is cut corners and hurt performance.

The good news: there are proven ways you can lower your CAC without directly slashing costs or making your marketing and sales teams unhappy. It takes some strategic thought and commitment, but the tools and resources you need are already there for you to leverage.


  • Being informed about your current customer acquisition cost and having clear CAC goals is critical.
  • Optimizing your sales funnel can shrink the time customers spend there and increase your marketing and sales ROI.
  • Targeted marketing optimizes resources by pursuing the leads most likely to convert.
  • Retention and referral networks are two of the most accessible and impactful ways to drive revenue and lower CACs.
Set Your CAC Goal

Is this one obvious to you? If it is, that’s great. Believe it or not, setting clear CAC goals is not a given at every company.

Your CACs aren’t fixed. With the right strategies (we’ll cover them here!), you can lower your customer acquisition costs while gaining valuable insight into your customer journey, sales cycle, and marketing ROI.

To start, you need to know your existing CAC. The simple equation for calculating customer acquisition cost is:

(Sales Expenses + Marketing Expenses) / # of New The benefits of calculating your CAC are twofold: first, you now know exactly how much you’re spending on marketing and sales. Second, you can make an informed decision based on those costs about what you want your CAC goal to be.

Optimize Your Sales Funnel

Even if you think you know your sales funnel inside and out (and maybe you do) there is always room for improvement and further optimization. When your sales cycle is streamlined and your sales and marketing efforts are aligned, you can shrink the time and number of touchpoints between buyer awareness and purchase to lower your CAC.

Here are ways you can continually optimize your sales cycle:

  1. Map your customer journey – Take an in-depth look at every stage of your sales funnel and ask questions about how your customers interact with your company during that stage. Talk to your sales and marketing teams to get a clear idea of how their efforts are allocated during each stage, too. Look for opportunities to streamline.
  2. Optimize your content – Audit your website, social media, advertisements, and any other content you publish to analyze which stage of the sales funnel it aligns with. Assess the channels through which you’re sharing the content and rework your strategy however needed to ensure your customers are getting the right content at the right stage. If there are gaps, create content to fill them.
  3. Provide clear lead standards – Significant time and financial resources can be spent on hopeless leads if your company isn’t clear with your sales team about how to qualify viable leads. Ask yourself first, “Does my company have clear lead qualification standards?” and second, “Are the qualification standards effectively communicated and understood by our sales team?” If the answer is no to either question, it’s an opportunity to improve.

Target Your Marketing


Another way to avoid spending time and money on leads that never materialize is to get as targeted as possible with your marketing and sales. This requires some work up front.

If you follow the steps to optimize your sales funnel, you’re already part of the way there. You’ve taken time to map your customer journey, optimize your content, and create specific lead standards.

Now, it’s time to collect buyer insights so you can target your marketing to the leads most likely to convert. Sound complicated?

Actually, all it takes to start using buyer insights is a willingness to talk to your customers — current and former, won and lost — you get the idea. Anyone who was ever a customer or prospective customer of your company can give you valuable insight into which leads are most likely to convert and what’s working (and not working) about your marketing, sales, and retention strategies.

Once you have a substantial data set, you can identify trends that help you identify the traits of your highest-converting, most satisfied customers so you can target leads that fit their profile. At the same time, you can use feedback to improve your sales and marketing strategies for best results.

Implement a Content Strategy

Content marketing attracts leads through the consistent creation and publication of high-value, relevant industry content. It’s 62 percent more cost effective than all other types of marketing and yields a conversion rate 3x higher.

If you’re not already leveraging content to generate leads, the time is now.

Content marketing drives organic traffic, which is driven by search engine results. When you implement an SEO-optimized content marketing strategy, you increase your SERP (search engine results page) rankings and drive traffic to your website at minimal cost.

At the same time, you publish content that helps establish thought leadership in your industry and build your brand reputation. It’s a win-win.

Focus on Retention

Did you know that retaining your current customers is 5-25x more cost-effective than acquiring new ones? If you’re looking for an easy way to lower your customer acquisition costs, here it is: refocus your sales efforts to increase retention.

Here are some ways to do it:

  1. Implement a Customer Feedback Loop – Do you know how your current customers would rate their experience with your company? If not, it’s time to find out. Put a system in place to collect current customer feedback, share it with your internal teams, and generate solutions using the insights it provides.
  2. Treat Current Customers Like New Ones – Don’t assume that your customers will stick around just because they made a purchase in the past. Allocate sales resources to current customers to create a positive experience and proactively address new needs or challenges.
  3. Offer Loyalty Rewards – It’s nice to feel appreciated, and offering loyalty rewards like nice giveaways, discount perks, or occasional freebie services makes your customer feel like they matter to your company (which they should!).
  4. Build a Community – Providing ways for your customers to interact with you and other customers builds a sense of community and connection for your current customers. To do this, you can utilize social media or discussion boards, host events (both in person and online), and share customer success stories.

Create a Referral Program

According to Nielson, 92 percent of consumers trust referrals from people they know. In the B2B world, 83% of customers are willing to refer to a company after a good experience and 78% of leads generated from referrals become viable leads.

It’s a big opportunity, and you can capitalize on it by creating a referral program. This might sound complicated, but it’s not very difficult if you’ve already put in the work we talked about up top to make your current customers feel appreciated.

When you have strong relationships with your current customers, you can ask them for referrals. To do so, you must be totally confident that they are happy with their experience, and the best approach is a direct and honest one.

Put a system in place that is convenient, accessible, and easy to use for current customers to submit referrals or share your information with peers. Then, be sure you have strategies in place for strong, targeted referral follow-up.


If you came looking for a snap-your-fingers fix for lowering customer acquisition costs, you might be disappointed. It certainly does take time, effort, and commitment.

If you were feeling overwhelmed by the prospect of lowering your CACs, we hope you’re thrilled to see that all of the tools and resources you need to do it already exist in your own organization. All you have to do is leverage them.

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