1880 S Dairy Ashford Rd, Suite 650, Houston, TX 77077

Using Segmentation Strategies to Improve Conversion Rates and Reduce Customer Acquisition Cost

Companies that wish to stay top-of-mind with potential customers can benefit from retargeting. Customers tend to abandon half-completed tasks on web and mobile apps. There can be many causes for a customer to decide against making a purchase. A customer who has started but not finished a purchase may be prompted to do so by a friendly prod in the correct direction. Conversion rate optimization is very important to achieve higher sales.

The customer acquisition costs (CACs) of your paid channels are a strong indicator of their effectiveness. Lower CAC equals more customers = more ROI, hence it’s a good measure of marketing success in general.  A good or terrible CAC cannot be determined by any universal criteria. Multiple variables affect CAC, but your industry and your customers’ lifetime value are the most essential. If your company’s CAC is significantly higher than desired, you could benefit from the following approaches to reducing CAC:


Retargeting (remarketing in the Google Ads platform) is one of the simplest ways to attract users back into the funnel and have an ideal CAC. The Google Display Network and Facebook Ads can be used for this purpose. Combining the two methods maximizes your chances of converting your audience at every stage of the buying process.  Retargeting can be an efficient technique to acquire new clients at a low cost per acquisition (CAC) if you lack the resources to run intent-based ads. 

Create Powerful Ad Words Ad Campaigns

A search campaign can be constructed in any number of ways, but there are some best practices that will yield the best results in terms of user experience and conversion rates.  Using certain phrases in ads and on landing pages is one example. Rather than just using the phrase “crm” as a keyword, “crm free trial” might be more effective in promoting a free trial of a customer relationship management system. You should use the terms “free trial” in the headline and description of your ads, and you should also put this phrase somewhere above the fold on your landing page. All of this works together to form consistent communication, which is crucial for attracting new clients.

Accurately determine the cost of acquiring new customers

Total advertising and promotion expenditures as a percentage of net customer acquisition is your CAC. Establishing a target CAC is the first step towards realizing a profitable return on investment. Your marketing and sales activities can then be measured against this standard.  If you’re starting a firm, it’s important to research typical CACs in your field and figure out what sort of Customer acquisition cost is feasible for your operation to turn a profit.

Put Ad Text to the Test

Even if you have good results with one version of your ad content, you can get even better results by optimizing your copy. Compare the CTRs of your best-performing ads to those of your worst-performing ads to determine what makes the former so successful. Put ads that aren’t doing well on hold while you create new ones that use similar language and style.  Reducing CAC over the long term requires persistent tweaking and fine-tuning of your paid media approach. 

Try Out Some Creativity

Examine your Facebook ad’s CTR, conversion rate, and post engagement if you’re utilizing it as part of your marketing strategy. Using these figures, you can experiment with your marketing approach by using several versions of the same creative, for example, by comparing and contrasting graphics with lifestyle photographs. 

Conversion Rate Optimization

The use of Google Ads’ themed ad groups has been shown to increase conversion rates. For clarity, let’s divide the keywords for “crm free trial” and “small business crm” into two different ad groups.  Depending on your budget, adding negative keywords to your Google Ads once or twice a week might have a significant impact on your conversion rate. 

Raise the percentage of repeat customers

If you’re able to gain new customers without losing any old ones (as measured by your customer retention rate), your CAC won’t go up.  In order to increase the percentage of returning customers, you can use a few various approaches. One in particular is conducting in-depth research on customer churn to see why customers are leaving and what can be done to retain them

Implement Marketing Automation

The use of marketing automation, such as an email drip or lead nurture, can also aid in lowering CAC. You can use sponsored media to promote a free trial or white paper, and then use the email addresses you collect to carry out lead nurturing. Consider the benefits you can provide to these potential customers. You already have them in the works. Those leads are more likely to become paying customers if you have a solid lead nurture workflow in place. 

Run Split-Tests on Your Landing Pages

You can compare two versions of your landing page with the help of an A/B test. Using Google Analytics data on bounce rates and exit pages on your landing pages, you can run tests to see how different elements, such as button color or call-to-action wording, affect conversion rates and, in turn, CAC.  Allowing an A/B test of a landing page to run for two to four weeks, depending on the volume of visitors, is often recommended. 

Final Words

The prices of goods and services offered by various businesses will determine their respective client acquisition costs. Corporate customers for a call forwarding service may be more expensive to obtain than individual consumers. Customers’ thresholds for persuasion and lifetime values vary, so you’ll need to find novel approaches to lowering your company’s customer acquisition expenses. It may seem like a lot, but if you adopt them gradually, you may increase your return on investment and cut down on client acquisition costs.