Best Ways to Optimize Cost per Acquisition in the Startup Environment

Optimize Cost per Acquisition

For startups and small businesses, acquiring new customers is vital for their business growth. 

Still, have you ever measured the success of your customer acquisition campaigns? For starters, you need to calculate your Cost per Acquisition (CPA). This metric tells you how much money you spend to aggregate one paying customer. 

If your CPA is high, don’t worry. You can reduce it using the following tactics.

Track your Customer Acquisition Costs

There is a simple formula to use when calculating your CPA: dividing the total cost of marketing by the total number of customers. For example, if you spend $1500 on your marketing tools and strategy and you acquire 50 new customers, your acquisition cost will be $30. In other words, this means you are spending $30 on each customer you acquire.

To understand your customer acquisition cost, you also need to measure:  

  • The average purchase value tells you how much your customers spend on average when buying from you. It is calculated by dividing your total revenue by the number of orders.
  • The average customers’ life span indicates customer loyalty. It is measured by dividing the sum of each customers’ lifespans by the number of customers.
  • Customer lifetime value tells you how much money each customer spends on your business during their lifetime. You can calculate it by multiplying customer value by their average lifespan.

Keep your Content Targeted and Relevant

Always keep in mind that the one-size-fits-all approach to sales and marketing doesn’t cut it anymore. Your customers expect your content and offer to be highly targeted and relevant. And, this is an immensely important thing to know for young companies wanting to minimize their cost per acquisition.

Namely, the longer it takes to turn a lead into a customer, the greater your customer acquisition cost will be. Above all, you risk attracting low-quality leads that won’t convert into paying customers or even brand advocates.

The key to attracting the right leads and converting them lies in building detailed buyer personas. Start by collecting customer data through website analytics, online surveys, polls, quizzes, chatbots, and social listening. Then, use their demographic data (geolocation, age, marital status, profession, salary, education) and psychographic data (their hobbies, interests, problems, frustrations) to segment your audiences into smaller groups and develop personas.

Segment your newsletter audiences.

Sending a single, uniform email doesn’t work for online users. To grab their attention in their overcrowded inboxes and get them to click on your subject line, you need to offer something valuable to them. Focus on addressing their needs and preferences. There are many ways to segment your email newsletter lists, such as by their geolocation, previous purchases, browsing habits, interests, activity/inactivity, etc. By investing in a reliable email service provider like MailChimp, Constant Contact, or AWeber, you will do so easily.

Target relevant keywords.

Your target audiences dictate many aspects of your SEO strategy, from choosing link building prospects to your UX elements. However, they play a particularly important role in your keyword research process. You should always optimize your pages for relevant keywords that will support your prospective customers at each step of their journey.

For starters, you need to focus on search intent. For example, if someone is visiting your website for the first time, they will want to learn more about you by reading your blog posts and news. On the other hand, people at the bottom of the sales funnel already know what they want to buy from you. To convince them to do so, you should provide them with targeted incentives, case studies, customer testimonials, discounts, etc.

The idea is to optimize your website for the right keywords, based on the user’s intent. Apart from optimizing for exact-match keywords, you should also use conversational and long-tail keywords to stay competitive. To learn what your audiences are really searching for, you could also use People Also Ask or Google Suggestions.

Educate customers through diverse content.

Content marketing is the backbone of brand-customer relationships. Diversify your content to make it relevant to different audience segments. For example, you could create powerful company newsletters to deepen customer relationships. Comprehensive guides and how-to articles to offer actionable tips. Customer testimonials, case studies, and demo videos will gain their trust. Provide self-service options, like a detailed knowledge base or a FAQ page that will solve their problems fast.

Optimize Cost per Acquisition

Build a Sold CRO Strategy

When attracting customers, you cannot expect them to convert overnight. You need to have a solid, well-defined CRO strategy to convert your prospective leads into paying customers.

Prove your website is safe

This is particularly important to companies that require users to provide their sensitive information. With the rise of cybersecurity threats, customers are concerned about the security of their data. According to some recent stats, 17% of shopping car abandonment rates are caused by security concerns. Therefore, before purchasing from you, they will want to know that they are buying from a trustworthy store. For starters, invest in SSL certificates and add trust badges to your website.

Show social proof

Many customers rely on online reviews when making purchasing decisions. Precisely because of that, social proof is a fundamental part of your CRO strategy. Here is how to use it:

  • Enable customer reviews and ratings on your website. 
  • Leverage social proof software. Use a CRO tool to provide your website’s visits, leads generated, and conversions in real-time. Third, encourage customer testimonials and display them on your website. Finally, create detailed case studies that show your previous customers’ problems and explain how you solved them.

Make your site easily navigable

Complicated website architecture frustrates customers and prevents them from converting. To prevent that, you need to optimize your website navigation. Start with your navigation menu. Reduce the number of categories and subcategories – include the most relevant ones. The categories should be logical and informative, helping customers find the right content faster. For those customers that already know what they are searching for, you should also offer search and filtering functionalities.

Turn Customers into Brand Advocates

In today’s highly competitive digital marketing landscape, acquiring a customer is only half the battle. The other half is increasing their brand loyalty and turning them into a raving fan base. Even though retaining customers and building a growing community of brand advocates takes lots of time and effort, the results are amazing. You will get tons of positive word-of-mouth marketing, boost sales, and help you regain your acquisition costs faster.

Now, there are many ways to nurture your leads and sales into loyal customers.

Show you care about their opinions

Listen to your customers on social networks and monitor your brand and product mentions to understand what they feel about you. You could also create customer satisfaction surveys on your website, social accounts, or email. Use their feedback to improve your customer support, marketing, and your products and, in this way, increase their satisfaction.

Build a customer loyalty program

A customer loyalty program rewards customers that are continuously buying from you. The more they buy from you, the more they are incentivized. This practice keeps your shoppers satisfied, as it shows them that you value their loyalty. There are different types of loyalty programs, such as point programs, tiered programs, value-based programs, and you should always choose ones that resonate with your target audience.

Have a social responsibility strategy

Your startup is more than just a product. Customers would always choose to buy from companies that share their values and missions. Precisely because of that, you should inject your core values into a corporate social responsibility program. Give back to the community. Make your products more eco-friendly. Those are just some of the numerous ways to build trust with your audiences and inspire them to stay loyal to your brand.


Attracting new customers and yet, reducing acquisition costs is any startup’s priority. To do so, you first need to measure your CPA and know how much you spend to acquire a new customer. Based on this data, you will formulate your customer acquisition and conversion rate optimization strategy. Those are just some of the numerous tactics that may serve as your solid starting point.

Emma Miller

Emma Miller

Emma is a digital marketer and blogger from Sydney. After getting a marketing degree she started working with Australian startups on business and marketing development. Emma writes for many relevant, industry related online publications and does a job of an Executive Editor at Bizzmark blog and a guest lecturer at Melbourne University. Interested in marketing, startups and the latest business trends.

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One thought on “Best Ways to Optimize Cost per Acquisition in the Startup Environment

  1. Avatar

    Well done with another mega post!
    I really liked this as it’s a topic close to my heart, and I’m not from the Google Zoo.