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How To Reduce Cost Per Acquisition

By on July 17, 2014 in Success Strategies with 0 Comments

When operating on online business perception is everything.  The internet is a free network for people to share information and sell products and services.  Minus the cost of accessing the internet via an ISP of course.  A high number of individuals and companies and willing to sell their products and services at rock bottom prices due to the low barrier of entry to the internet marketplace.  Everything is fighting for the user’s attention and trying to sell them something.

The underlying problem with this model is called hit and run.  They hit they customer once and never really build a long term relationship with the customer.  This business model is not a viable long term strategy.  When a new competitor comes into the marketplace, they usually drive the prices down, as a result the perception of value for the product or service starts to diminish.

As a result of this ongoing problem on the internet, businesses are realizing the importance of building brand equity.  Most businesses are not aware how to do this.  They actually cut at their bottom line and long-term strategies while trying to build brand equity.  Here are some ways businesses hurt themselves:

1) They think increasing advertising spending will help however, this only cuts into profit margins when done incorrectly.

2) They reduce the price of products and/or services, however this also cuts into profits and reduces their budget to market.

3) They alienate customers by a lack of uniqueness to appeal to the masses.

This behavior tends to lead to a brand becoming boring and irrelevant.   It tends to begin a spiral dive and in the end have a negative impact on the business and its ability to be agile.  The brand itself suffers as well.

A proper balance is needed here.  Being too passive allows more aggressive firms move in and sweep up market share.  While being too aggressive gives the impression that the business is over compensating.

How can a business reduce CPA without diminishing brand equity?

1) Control over Quality. A business who delivers real value with a product and/or service will become the clear choice among consumers.  This is backed up by testimonials, case studies and proper branding techniques.  Promote happy consumers to share their positive experience and help spread the word of their experience.  This is a great way to reduce your cost of advertising and it is a very effective conversion method.

2) Focus on your businesses unique selling point.  Really focus and stress your brands unique selling point and story.  Explain and demonstrate why its different and better than the competition.  Focus on the benefits for the end user and perhaps compare them to the competition.  As many may know, a compelling story goes a very long way.  What’s your businesses’ story?  Perhaps it was how it was formed or how you do business.  Give it life and allow your unique side of your brand spread in viral organic method.

3) Its all about the Customer Experience.  Always keep the customer experience in mind.  It needs to blow away the competition.  This alone can build a positive image for your brand. A happy customer is more likely to tell their friends about the experience when they excited about their purchase.  Image the reach if every customer was incredibly happy with their experience and starts telling their close network of friends or family.  They essentially do the marketing for you in a much better fashion.  Its a real, factual testimonial from a trusted source.  You just can’t match that no matter how much you spend on marketing.

In conclusion, deliver high quality products.  Make it easy for the customer to purchase them and stand behind your product or services with bar none support.


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