How Your Marketing and Sales Teams Can Help to Lower CAC

Both your marketing and sales teams can work to help lower CAC. Using a combination of market research, product endorsements, content marketing and minimizing “touch”, your organization gain tighter control over how much it costs to acquire new customers.

Correct Features and Service Level Specifications

Product Marketing is responsible for correctly specifying the minimal set of features that must be built into the solution to meet customer needs and expectations, and to be competitive with other solutions. For upgrades, make sure to avoid building in redundant or unnecessary development efforts. Marketing must also correctly specify levels of operational service in the same way.

 

Strategic Marketing Partnerships

According to statistics from Eloqua Corp, using a market influencer to endorse your product or service can help generate six times the amount of traffic and twice the number of conversions than it would without endorsement. Publishing good customer references and case studies may avoid the need for a trial and consequently increase the rate at which customers’ sign up and subscribe to your service. Other strategic partnerships and cross-promotions can accomplish similar sign-up multiplication at a lower cost.

 

Content Marketing is King

Relevant, useful content helps build relationships with your target market. For instance, blogging on subjects of interest in the industry that concern you and your customers can boost customer awareness about your product without a substantial financial outlay. All you need to do is provide content deemed to be valuable in the eyes of your target readers. Simply write unique, interesting articles in order to establish yourself as a thought-leader in the market. Avoid the temptation to “sell, sell, sell” at this stage, as a hard sell may deter more readers than it attracts. Once people are interested, they’ll be happy to leave you with their details. Then, let your sales team take the reins and make the hard sell.

Reducing Customer “Touch”

“Touch” refers to the intervention of sales representatives in the sales process. More expensive or more complex services are likely to require a higher level of touch. With additional touch, CAC goes up because people cost an enterprise more. In fact, the progression is often exponential. A “light touch” solution using phone sales will cost 10 times a “no-touch” solution, and a “high-touch” approach with a conventional field sales force will cost 10 times the “light touch” solution. Today’s technology has made it possible for many companies to dramatically reduce the level of touch; something that customers favor, at least in the early stages of their decision process.

Technology makes it possible to dramatically reduce the level of touch; something that customers favor, at least in the early stages of their decision process. Click here to Tweet

What Results Can You Expect?

It depends. Clearly, the reductions in CAC that your marketing and sales teams can achieve will depend on the type of solution you offer. Some no-touch, low-cost strategies achieve impressive results. Eric Albertson of Albertson Performance Group cites the case of Reach Technology, Inc. who achieved 30% annual growth and 60% margins with no sales personnel, a part-time marketing manager, and only a modest pay-per-click budget. Elsewhere, profitable SaaS solutions may require sales development with correspondingly higher CAC to generate business. Business models vary between a relatively higher touch approach, like online CRM vendor Salesforce, and a lower touch approach, like SaaS accounting service FreshBooks.

Some no-touch, low-cost marketing strategies achieve impressive results, like in the case of Reach Technology, Inc. Click here to Tweet.

How are you calculating your CAC? The most popular CAC calculation includes both marketing and sales costs –sales and marketing expenses are lumped together and divided by the number of new customers. However, sometimes it’s useful to isolate marketing expenses to get a more precise picture. To this end, use the Marketing CAC Calculator below to find out how efficient your marketing department is.

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Bo Amidor
Head of Corporate and Marketing Communications at WalkMe and Contributing Author to SaaS Addict blog.