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Nov, 2024
Customer acquisition costs in digital marketing are on the rise.
And they aren’t cooling off.
Digital marketing acquisition costs have surged dramatically. A study by SimplicityDX reported a 222% increase in customer acquisition costs over the last eight years:
To make matters even more challenging for businesses like yours:
If you’ve been scratching your head for what to do about the wild increase in CAC––you’re not alone.
Which is why we’re going to cover:
In its simplest form, Customer Acquisition Cost (CAC) quantifies the total expenses to acquire a new customer.
CAC = (Total cost of sales + marketing expenses) / (Total number of customers acquired)
In digital marketing, CAC covers costs from your sales team’s salaries and software to paid ads, content production, SEO, marketing automation, and social media strategies.
Here are some examples similar to some clients we work with:
Each example shows how businesses manage and optimize CAC for better digital marketing outcomes and a higher ROI.
Customer Acquisition Cost is the difference between a business barely surviving, thriving, or folding.
If your CAC is higher than your revenue, your business will fold.
Analyzing and improving your CAC prevents losses while driving profitability and growth.
Here’s a high-level formula for how you’d calculate your CAC.
CAC = (total digital marketing expenses) + (total sales expenses) / total new customers or clients acquired
Businesses typically assess their CAC over set time intervals depending on specific sales cycles, marketing activities, and financial reporting periods:
Let’s get into the weeds.
If you’re running the customer acquisition cost formula as you’re reading this, you need to build a complete view of the expenses involved in getting new business.
Let’s look at the combined cost of sales and marketing.
The big buckets for sales expenses normally include:
What about in digital marketing?
Expenses to consider are salaries, freelancers, contractors, and labor costs.
Also, you will need to factor in these expenses:
Now that you’ve got a full picture of costs associated with a company’s customer acquisition efforts, let’s dive into how to lower and manage your costs…
Your sales and marketing funnel are the lifeblood of your customer acquisition process.
Here’s how to optimize it to capture more leads and convert them into paying customers:
Identify leaks: Analyze your funnel using website analytics tools like Google Analytics to pinpoint stages where leads are dropping off. Are they abandoning forms, clicking away from landing pages, or failing to engage with your calls to action (CTAs)?
Diagnose the leaks: Once you’ve honed in on the drop-off points, dig deeper to understand why leads abandon your funnel at these given points.
Fix the leaks: Here are the most common funnel leaks we see with our clients and prospects and how to address them:
Remember, optimizing your funnel or customer journey isn’t a one-time change.
You need to keep monitoring your funnel’s performance, look for new leaks, and use data-driven solutions. You can optimize your lead flow and improve your conversion rates.
Your pricing strategy directly affects your customer acquisition costs and profitability.
Here’s how to optimize your pricing to attract customers and generate revenue:
By weighing these factors, testing, and refining your pricing strategy, you’ll be able to find the sweet spot that maximizes your customer acquisition efficiency and profitability.
Getting the most out of your sales and marketing budget is crucial. Here are some strategies to maximize your return on investment (ROI):
This should go without saying.
But one of the simplest, most effective, and potentially low-tech ways you can improve your CAC is to speed up your response time to new customers, leads, and prospects.
For example, your response time to a new lead or prospect is within 24 hours.
Your primary competitor’s response time is under 15 minutes.
Who’s going to win that business?
Your payback period tells you how long it takes to recoup the cost of acquiring a customer.
A shorter payback period highlights a more efficient customer acquisition strategy.
Here’s how to find and optimize yours:
Calculate your payback period: Divide your customer lifetime value (CLTV) by your customer acquisition cost (CAC). CLTV is the total revenue a customer generates over their lifetime with your business.
Analyze your payback period: Industry benchmarks can give context for your payback period’s efficiency. However, it’s important to consider your specific business model and growth goals.
Reduce your payback period: There are several ways you can work to shorten your payback period…
By monitoring and optimizing your payback period, you can ensure your customer acquisition efforts are efficient and contribute to your business’s long-term growth.
CAC is critical for business survival, improvement, and growth.
Use the above steps as a guide to systematically reduce costs and automate expensive manual processes.
If you’re struggling to lower costs and improve results with your digital marketing channels and campaigns, we can help.
Schedule a free strategy call with our digital marketing and advertising team today.
Generative AI is revolutionizing the marketing world.
It’s also empowering businesses and agencies with tools for all types of content creation. Generative AI is helping us create content and connect with their audiences on a scale (and at a speed) that’s difficult to fathom.
And, it’s only getting better and smarter.
According to a survey by Salesforce, 55% of marketers are already using generative AI in marketing, with another 22% planning on adopting it in the near future.
AI technology is evolving fast.
Marketers can now use AI tools to:
In this article, we’ll explore how generative AI in marketing is changing the game for marketers and advertisers.
Generative AI refers to a subset of artificial intelligence that can generate new content, ideas, or solutions based on input data.
Traditional AI models follow a set of predefined rules.
Generative AI uses machine learning models to create original content, like text, images, video, and even music.
This technology can mimic human creativity and produce outputs that—with the right guidance—are difficult to distinguish from 100% human-created content.
Generative AI in marketing enables brands to create personalized and engaging content at scale.
It helps marketers automate repetitive tasks, optimize campaigns, and generate insights from massive amounts of data.
Businesses using generative AI can triple their marketing efforts, increase efficiency, and improve customer experiences.
Generative AI can assist sales teams by:
This technology can analyze customer data to tailor messages that resonate with individual prospects, increasing the likelihood of conversions.
For example, using a tool like Mailchimp with its AI-powered Content Optimizer, you can generate personalized email content tailored to individual recipient preferences.
The AI analyzes past interactions and behaviors to suggest subject lines and body text that are more likely to engage each specific user.
In advertising, generative AI can create hyper-targeted ad campaigns by analyzing consumer behavior and preferences. It can generate
This leads to more effective and cost-efficient personalized marketing campaigns.
Using Facebook’s AI-driven ad platform, you can create campaigns that target users based on detailed behavioral and demographic data. AI can identify users most likely to be interested in a new product based on their past interactions with similar products.
Generative AI can produce a wide range of content, from blog posts and social media updates to video scripts and product descriptions.
By using generative AI to create content, marketers can focus on strategic planning and creativity. This gives the power, tools, and resources to keep a consistent and engaging brand voice across all channels.
Jasper.ai can generate blogs, social media posts, product descriptions, and so much more. You can provide Jasper with a topic and some key points, and it will create a structured blog post that’s ready to publish.
AI-powered marketing automation tools can
Generative AI can enhance marketing tools by creating personalized content, predicting customer behavior, and providing actionable insights to improve marketing strategies.
Marketo Engage uses AI to analyze campaign performance and provide actionable insights. For instance, it can identify which segments of your audience are responding best to your campaigns and suggest adjustments to improve engagement.
AI can analyze vast amounts of customer data to uncover insights into consumer behavior, preferences, and trends.
This information helps marketers segment their audience more effectively, personalize their messaging, and make data-driven decisions to enhance their marketing strategies.
Salesforce Einstein segments your audience based on detailed behavioral and demographic data. It can create segments for high-value customers, frequent buyers, or customers at risk of churning, allowing you to tailor your marketing efforts accordingly.
AI can automate video creation by:
It can personalize video content based on viewer preferences and behaviors, making video marketing more effective and engaging. AI can also analyze video performance data to refine future content.
Magisto uses AI to edit and produce videos from raw footage. You upload your footage, select a theme and music, and the AI creates a polished video by picking the best clips and arranging them into a cohesive story.
Generative AI offers dozens of benefits for marketers:
The greatest benefits of generative AI in digital marketing are increasing growth and scalability at breakneck speeds. And, it’s only getting faster and better.
While generative AI offers many advantages, there are also concerns to consider, such as:
It’s best for companies, agencies, and marketers using generative AI to stay informed with the latest innovations, as well as the response from state and local municipalities.
Integrating generative AI into your marketing strategy can seem daunting, but with a structured approach and a little guidance, you can get so much more out of it.
Here’s how you can implement generative AI for marketing:
Start by pinpointing areas in your marketing operations where generative AI can make the most significant impact. Common use cases include:
Select AI tools and platforms that align with your identified use cases and business objectives. Some effective AI tools for marketing include:
Evaluate these tools based on their features, ease of integration, cost, and support services.
Start with trial versions to test their effectiveness before committing to a purchase.
Next, make sure your marketing team is well-equipped to use AI tools by providing comprehensive training. This can include:
After you implement AI tools, continuously monitor their performance to make sure they’re moving you toward your marketing goals.
Key metrics to track may include:
The field of AI is rapidly evolving, with new developments and best practices emerging regularly. Stay informed by:
By staying current with AI advancements, you can continually refine your strategies and maintain a competitive edge in the market.
By leveraging generative AI, marketers can create more personalized, efficient, and impactful campaigns––at lightning-fast speeds.
Want to take your business’s marketing and advertising results to the next level?
Contact OppGen to expand your brand’s marketing campaigns and get your business the best possible results.
Our team has over a decade of experience creating successful advertising and SEO campaigns.
We stay up-to-date with the latest in AI marketing tools and techniques, stacking those on with our years of experience to produce the best possible results for our clients.
When a prospect looks at an ad, they expect to see something that represents your brand. So when a prospect comes across an ad with a distorted image, they are not likely to have a good impression of your company. They might think the advertisement was done too quickly; that it looks unprofessional; or maybe a scammer is trying to use your business for their own gain.
It can be difficult to keep track of the accepted digital ad sizes and file types because there are so many different places to advertise online and different ad types. But we’ve made it easy for you with the following guide where we cover the best practices for digital ad sizes in 2021.
Note: All ad sizes are measured in pixels (px) unless otherwise noted.
If keeping up with all of the changes in digital ad sizes, such as the ever-changing recommended ad size and formats, it may be a good idea to contact a digital advertising agency to create ads for you. Not only does OppGen create ads for clients, but we also manage digital advertising accounts and spend. Our strategies have helped hundreds of companies generate more leads and revenue at an improved ROI.
Contact us to learn more about what we can do for your business.
Have you ever asked yourself – What is a Holistic Digital Marketing Strategy? The word holistic is thrown around a lot these days. We’re used to seeing holistic referenced with medicine or wellness. And now, it’s become a buzzword in marketing. Depending on who you talk to, you may get a different definition of what holistic marketing is. This article aims to break down OppGen’s approach to holistic digital marketing, as well as our definition of it.
Let’s start with the most basic definition of the word. According to the Merriam-Webster Dictionary, holistic is defined as “relating to or concerned with wholes or with complete systems rather than with the analysis of, treatment of, or dissection into parts.”
So how does that definition apply to a holistic digital marketing strategy?
A holistic digital marketing strategy is a type of digital marketing strategy that focuses your marketing strategy as a whole. Digital marketing strategies, or at least the most effective ones, utilize multiple marketing channels at the same time.
OppGen’s holistic digital marketing strategy primarily focuses on the goal of generating leads for our clients through several digital marketing channels. We then determine which channels are most effective and pay close attention to how they feed into one another and progressively bring leads in through the marketing funnel (we’ll go into more depth on the marketing funnel further down in this article).
When we bring all of these channels together and use them in the most effective and efficient ways, our clients benefit from the leads generated from these channels. Contact us to find out how OppGen uses a multi-channel approach to generate more leads.
Using a holistic multichannel approach to digital marketing allows us to reach more people in places where clients may not be able to find them using just one marketing channel. That said, there are many marketing channels out there. OppGen excels at working with, including:
Search ads come in a couple of different forms:
As you can see, these search ads work better in certain contexts and can help cover more ground and find more prospects.
Social media ads are excellent for targeting very specific or niche audiences. Facebook in particular is one of the best sites to use for marketing. Their advertising program features a wide array of powerful targeting tools. You can push ads to prospects based on demographic information (sex, age, job, location) and psychographic information (their interests, hobbies, things they care about or prioritize).
Facebook offers more types of advertisements than most search engines do. They have single image ads, carousel ads, video ads, and more. Facebook ads are arguably effective at every level of the marketing funnel, as the social media platform lets you create ad campaigns based on your business’s goals, from visibility to getting them to convert from prospect to lead to client or customer.
Search engine optimization, or SEO, is a marketing strategy with the goal of getting your website to rank high on search engine results pages for certain keyword searches. Unlike search ads, there is no cost per click. It is an organic strategy, which means it doesn’t require you to pay Google or Bing or any other search engine for advertising. But it does require a bit more time and effort than search ads do. It’s well worth investing the time and effort, though, as it can bring more traffic to your site and more foot traffic into your business.
An effective SEO strategy needs to cover the following four items:
Certain marketing channels are more effective at different points in the marketing funnel. Those points and their most effective digital marketing channels are as follows:
Education starts with attracting the ideal audience. You want to be able to make sure prospects know about your business’s existence. Though they may not know what you do or what you offer, making sure they know your business exists is the first step.
This is where creating Facebook ads and search ads can really come in handy. You’re putting your business in front of prospects who are either interested in a service or product you offer or are actively searching for that product or service.
SEO can also be useful here, particularly from the local SEO standpoint. Setting up a Google My Business page can make it easier for businesses to show up when a prospect searches for something relevant to its offerings. As long as you show up on the first or second SERPs page, you’re more likely to be seen by prospects. And that’s an important first step!
We can help you set up a Google My Business page and keep the listing up to date by sharing any news or blog posts written by our content writer. Contact us to request more information about our SEO program.
Once prospects are aware of your business, we can start to get them more interested in what you do. They may start to research your company by checking your reviews and ratings from other clients or customers to get an idea of what they can expect.
From there, prospects will go to your business’s website, and this is where having rich content can come in handy. Once prospects visit your website, they need to be impressed by what they experience. Your website (or landing page, depending on the route they took to find your business) should look clean and professional. Your content needs to be in-depth, informative, and relevant to their needs.
Once a prospect has visited your site, you can begin to utilize display ads to keep nudging them back to your business’s website or certain landing pages on your site.
OppGen builds beautiful websites and landing pages that have been tested continuously for optimum conversion rates, and we continue to test and make sure your website is truly at its peak performance. We also have plenty of experience with display ad campaigns, so we can keep prospects interested and returning to your site as they determine whether or not you’re the best fit for them. Contact us to learn more.
At the bottom of the marketing funnel is where the prospect’s journey ends, with them converting to your newest client or customer. A conversion is that desired action mentioned earlier — it could be anything from making a purchase or scheduling an appointment or consultation or even getting them to sign up for your business’s email newsletter.
Whatever your goal is, OppGen will nurture leads through a holistic digital marketing strategy to take that action and keep more coming through the marketing funnel.
As you can see, our holistic digital marketing strategy is built to strengthen your business’s marketing plan by using multiple types of digital marketing channels. When we utilize multiple channels for a client, our client tends to see an overall improvement in conversion rates and their return on investment.
To learn more about our holistic digital marketing strategy, contact OppGen today, or fill out our free digital audit so we can determine which channels would be most effective for your holistic digital marketing strategy.