Cost per click has increased significantly over the years, with inflation at record highs in 2022 the conversion rate also decreased with an average of 19%
Ways to mitigate for the high inflation could be examining your costs and profit margins and finding ways to cut costs, making use of free and low-cost methods of marketing, evaluating your cash and debt, and raising prices if you need to. In this blog we will share more on cutting cost and profit margins for your online store!
In this blog we will go into:
- How to use Analytics to optimize customer acquisition cost
- Focus on retention rather than acquisition.
How to use Analytics to optimize customer acquisition cost
To spend your marketing budget in the best fashion its important to get insight into what the actual benefits of your effort are. We see in the market that many stores do no incorporate returns in the marketing data - although its easy and important to do so. You want to know the net-revenue percentage that is acquired rather than the revenue itself. You can calculate this by subtracting the returned revenue from the revenue - this way you will see how much of the revenue sticks.
Enhancing Customer Retention: A New Approach
While leveraging ongoing promotions is a well-known method for boosting customer retention, there's another vital aspect that might be overlooked: the returns process.
Customers often return products, not out of dissatisfaction with your brand, but because a particular item didn't meet their needs. If they opt for a cash refund, it often signals the end of their relationship with your brand, resulting in churn and escalating customer acquisition costs.
So, how can you turn this around? Focus on transforming the returns process into a retention opportunity. Encourage product exchanges and store credit instead of refunds. With a platform like Loop, you can facilitate effortless exchanges within your store, even for items unrelated to the original purchase. Since customers won't have to go through a new shopping cart transaction, even if the exchange costs more than the original item, they're more likely to find something they love. This not only maintains their connection with your brand but also fosters increased loyalty.
Remember, customer acquisition cost is a critical factor affecting your brand's profitability and sustainability. By crafting a robust customer acquisition strategy that combines both organic and paid methods to connect with your target audience, you'll lay the groundwork for a resilient and cost-efficient marketing approach. Moreover, by fine-tuning the post-purchase experience to turn returns into exchanges, you'll have the essential tools to enhance your customer retention rate from the inside out. Find out how Returnista can help and talk to an expert