- Problem — targeting the wrong audience
- Solution — an entity embedding method
- Problem — underfunding existing customers
- Solution — remarket existing customers with offers they are likely to be interested in
- Problem — losing website visitors
- Solution — remind them to complete the action or nurture them with content
- Problem — copying the strategy of market leaders
- Solution — get industry reports
- Innovative Ideas and Viral Content
- Problem — ideas don’t go viral
- Solution — anticipate new trends
- Problem — copywriters’ fees are too high
- Solution — AI-powered copywriting tools
- Problem — the sales team is too big and inefficient
- Solution — implement chatbots or live chats
- Designing and Programming
- Problem — in-house designers and programmers are expensive
- Solution — pre-designed templates built into automated marketing tools
- Problem — irrelevant offers
- Solution — personalize at scale
- Social Media
- Problem — social media campaigns don’t convert
- Solution — social media automation tools
- Wrapping Up
Major Things You Might Be Wasting Money On — 10 Easy Ways to Decrease CAC
September 2, 2021 11 min. read
AI is reaching a fever pitch nowadays. Companies introduce AI-based tools into their marketing tech stack to reduce the cost of acquiring new customers (CAC) and increase their customers’ lifetime value. Why do we focus on these two? Well, marketing and sales are about customers that come and stay with you. But the problem is that more often than not, companies initiate methodologies that are either too expensive, too time-consuming or simply don’t suit their business.
In this article, we’ll start with your money wasters, followed by an AI-based solution that can help avoid unnecessary costs related to time, budgets and, most importantly, your sanity.
Problem — targeting the wrong audience
Companies are targeting way too broad an audience or audiences that are not interested in your product. Why does this happen? Several reasons: you don’t have accurate enough data, you don’t segment well, or privacy and data sharing policies may be flawed. Whatever the reason, it may be the beginning of a vicious cycle. Without accurate targeting, it is difficult to determine what might be affecting results. Therefore making adjustments to your campaign becomes impossible.
Solution — an entity embedding method
Instead, use the more accurate entity embedding method, which allows AI to detect new warm audiences based on their content consumption. How does it work? The content that you determine as defining the interests of your target audience is input into the system. The system parses the available data and finds customers interested in this content — your target audience. Let us be more specific.
For example, if you are a company selling 100% sustainable goods, your ideal customer might be someone who is passionate about the environment. For AI software, finding your ideal customer is simple. It will look for prospects that watch docu-series and read articles about eco-friendly living. In such a way, you will be able to overcome the extra anonymity and lack of information about leads.
Problem — underfunding existing customers
When chasing new leads, we sometimes forget about existing customers. Logically, if you lose a customer, your acquisition costs automatically go up. An increase in new customer acquisition by 1% increases company income by 3.3%, and the same increase in retention rate results in a 7% increase. As you can see from the numbers, the longer clients stay with you, the more money they bring in, and the less you need to focus on acquiring new customers to compensate for the ones you lost.
So if you leave your existing customers without attention for too long, you may risk losing them forever. But reminding each existing customer about your business by calling or emailing them manually is ridiculous. And let’s be honest, practically impossible. This is where AI comes in handy.
Solution — remarket existing customers with offers they are likely to be interested in
With automated email marketing tools, you can increase the number of loyal customers simply by reminding them about your business. Let’s say you sell hygiene products and a customer ordered a bar of soap and some shampoo that you (the manufacturer) is certain will last no longer than two months. To gently remind this customer that he might be running out of these products, you can set up an automated email campaign that will be released to them two months after the purchase.
One issue we have these days is that there are too many offers online. So even if your customers enjoy your products, they might be forgiven for simply forgetting where they ordered them and go elsewhere. Just a quick gentle reminder will help you keep them around.
It’s also great to remind your existing customers to renew the subscription or that the trial period is coming to an end. It will bring your brand and products to the front of their mind.
Problem — losing website visitors
Imagine that you’ve set up an ad campaign that successfully generated warm leads. They came to your website, went through the pages, maybe read a couple of blog posts and left. They may have even put goods into the basket but left the page before completing their purchase.
Either way, this is bad news because the chance of them coming back is relatively small. This means that you’ve just wasted money that you previously invested into helping them find you online — your lead generation costs.
Solution — remind them to complete the action or nurture them with content
To stop losing customers who have already interacted with your brand, re-engage with them as they move around other web pages so that you remain at the front of their minds over time. In other words, retarget. Retargeting is a very effective tool because it gives you the chance to remind customers about your business and prompt them towards the next step or complete an unfinished action as a new or existing client.
Here are a few examples of how AI tools can be used to enhance your retargeting strategy. First, you can remind them of forgotten information, for example, in the case of cart abandonment, try to bring the product back into the consumer’s inbox. Second, if they were not so close to purchasing, you can continue nurturing them with relevant content until they are ready to buy.
Smart AI-based software helps you to react at the right time — by setting triggers. A trigger can be any event that is considered significant — leaving the website, unsubscribing from the news or leaving emails unopened for a long time. Thus, you will minimize the chance of losing your potential customers forever.
Problem — copying the strategy of market leaders
All too often, companies try to apply the innovations and strategies of industry giants. Companies like Google and Amazon have massive budgets, thousands of staff and a host of other unlimited resources. That’s why what works best for them may not be suitable for startups or even comparably smaller companies at relatively lower costs. The good news is that there’s a much better way to discover more applicable business insights and relevant industry trends.
Solution — get industry reports
Today AI has access to a lot of data, including market trends, business strategies and innovative technologies. Combining big data, the work of human researchers and AI, they can quickly identify consumer insights, business opportunities and cutting-edge innovations to help you stay one step ahead of the competition.
Perhaps even more importantly, since reports are data-driven, they can be clustered for any industry and any company size, thus becoming a reliable and specific source of information. In this way, you will save yourself days, if not months, of research and thousands of dollars spent on testing.
For the latest business and emerging trends in markets, check out Trends.co, which also has a strong community where you can network and collaborate with over 15,000 experts, investors and business owners.
Innovative Ideas and Viral Content
Problem — ideas don’t go viral
Are you sick of trying to go viral and not succeeding? Lost in the flood of numerous news stories and conversations online, but missing the hot topics? Discovering hot trends before they fade out and run their course can be pretty challenging. Relying on expert data is crucial to saving time and more when it comes to catching viral trends.
Solution — anticipate new trends
Today there are numerous ways to find trends before they go viral so you can stay at the top of the game and ten steps ahead of your competitors. For example, Signum.AI will discover what is trending online: memes, popular threads, hot topics and influencers gaining popularity. Then they’ll deliver these insights straight to your email twice a month.
Problem — copywriters’ fees are too high
Writing juicy copy that aligns with the brand’s voice along with specifically targeted audiences can be time-consuming and challenging, especially if you are a startup with a limited budget and staff. However, there is no getting around the fact that you have to promote your product. And of course, you should do it head and shoulders above your competitors so that your product catches their eye and delivers the best experience possible.
Whether it’s short marketing copy for a Facebook ad, an Instagram post, an email or website copy, it can be quite challenging for a non-professional. Surely you can hire professional copywriters that have heaps of experience in your niche. But they also cost a lot, even if they work part-time.
So you might feel like you’re caught between a rock and a hard place — on the one hand, being in need of good quality copy that sells the product, while on the other hand, not wanting to spend the entire budget on a copywriting team or struggling to create that level of copywriting by yourself. Don’t worry, we’ve got you covered.
Solution — AI-powered copywriting tools
With AI-based software, writing decent copy is more manageable than ever. There are many tools to choose from, but the algorithm basically works the same — neural networks use existing content to create new plausible content. In other words, they take your thoughts and turn them into words that are always in the brand’s voice and specific to the audience. Thus, this content boosts the overall engagement levels generating more clicks, likes and shares. You might be wondering how. Let us break it down for you.
You input short information depending on the sort of text you want to create. AI analyzes a vast dataset (your and your competitors’ content). Then, it uses this data to examine what words and phrases impact your marketing campaigns’ performance and picks the parts that receive a higher level of engagement. And, finally, it generates high-conversion copy for you. Wait a minute. It can generate several versions of the text for, let’s say, different segments of customers.
But there’s more. For example, using the algorithm described above, Signum.AI can create a turnkey Facebook ad including both text and images.
Okay, you got it — AI-powered text generation software can help with short copy like headlines, emails, social media campaigns, and more. But what about long pieces of text like blog posts? Well, for now, it can’t do that, but it certainly can brainstorm ideas for blog posts that will help your efforts resonate with your target audience.
This sort of technology saves lots of time and can be crucial for the success of a small team so that everyone can focus on what they are best at.
Problem — the sales team is too big and inefficient
If your sales reps need to contact every lead individually, either by calls or email, and respond to inquiries from existing customers or remind them to renew their subscriptions, you’re missing out.
First, you waste their time making them focus on routine tasks that don’t guarantee any results. Second, if done manually, all the information they get and need to pass to other teams might be messy, unstructured and easily lost. And finally, even if they somehow manage to be effective (which is quite unlikely), you probably have an enormous management team whose wages massively blow out your budget.
Solution — implement chatbots or live chats
Prospects simply won’t wait days (even hours) for your reply. They need answers instantly, and if they don’t get them, they are likely to find solutions elsewhere without delay. The faster your lead response time, the higher your conversion rates will be. That’s where chatbots and live chats come in handy.
A chatbot can smoothly handle multiple conversations at a time, easily find any information needed and provide it in greater detail. So that both your team and your prospects benefit from it — customers feel like you care about them rather than constantly being treated like a checkbook, and your sales will be received more positively.
Nowadays talking to a chatbot does not feel like talking to a doddering robot that has no clue of what’s going on or even considers who it is talking to. Chatbots and live chats give you a great mix of speed, accuracy and personalization. Plus, you can leverage these tools across your sales team — software will determine if a manager’s help is needed and efficiently pass them on to the right professional.
As you can see, chatbots help you do everything a decent sales team does in significantly less time and with minimal effort while reducing costs. If you want to learn more about chatbots and make the right choice to suit your business and budget, check out our article.
Designing and Programming
Problem — in-house designers and programmers are expensive
A poor design might keep you from getting the desired level of email engagement, positive response to ad campaigns, and higher traffic to your website. Imagine opening an email from your inbox or checking out a website that looks amateurish — texts, buttons and images are a mess. Would you trust this company? We doubt it.
In today’s era of visual consumption, customers expect beautifully designed emails, are more likely to respond to catchy social media ads and strongly favor user-friendly websites. Additionally, all of your design efforts should be aligned with your brand and be consistent with the corporate brand identity.
Having an in-house team of experienced designers and programmers that can create user-friendly and innovative communication with your potential customers can be quite an expensive way to get the job done. Even if you decide to hire a couple of freelance workers to work on projects from time to time, it can still stress your budget as such high-quality specialists are expensive and in high demand. Luckily we have a hack to help you meet this challenge.
Solution — pre-designed templates built into automated marketing tools
With pre-designed email templates, website builders and basically any AI-based products offer either ready-made templates or a simple drag-and-drop interface that can be used without specific technical knowledge. You don’t need to bother with colors, fonts and other elements. Everything has already been carefully selected, tested and put in a user-friendly format so that none of the elements will be lost. As a result, you can easily scale your brand identity to any form of communication with your prospects.
But even if you already have a team of in-house designers and programmers, this does not mean that you need to fire them. On the contrary, a set of smart software will make their work easier and help them align all your campaigns with your brand identity.
Problem — irrelevant offers
Way too often, companies use one and the same message to communicate with different segments. The problem is that your prospects are at various stages of the decision-making process, or their wants and needs are different. For these reasons hitting them with the same offer will not be fruitful.
But imagine the amount of time and money needed to manually create offers for hundreds if not thousands of individual clients (especially if you have a huge client base and generate thousands of new leads regularly). Using a human-only-based approach to achieving this level of segmentation and personalization is not very realistic.
Solution — personalize at scale
Because AI solutions are data-driven, they can easily track, analyze consumer behavior, and adapt precisely. With all this information, they can create personalized journeys and adjust future communications accordingly. Using all your target audience data, AI will create messages that will communicate a problem-solving offer and include any number of personal variables from more standard ones like names and job titles to highly customized fields such as previous orders etc.
In other words, you will always send the right content to the right people at the right time of the day.
Problem — social media campaigns don’t convert
Have you ever experienced spending a lot of money on an advertising campaign with no conversions? There are several reasons for that.
First, you might not have planned your campaign well enough. Meaning that you haven’t taken the time consider the scheduling and content preferences of your prospects.
Second, even though some campaigns can be relatively successful and get many likes and shares, they may still fail to convert into actual purchases. This happens because users are often uncomfortable switching to another window to complete the purchase. As simple as that, they just don’t want to leave the application they are using. But you don’t need to worry because the latest AI-powered social media tools are a game-changer.
Solution — social media automation tools
These will take a load off your mind because they can solve both of the problems listed above (and more).
With AI-powered social media software, you can take the guesswork out of scheduling your posts. It will analyze your content to find the right time to share it for maximum engagement. You just need to set the time and platform you want to publish on, and the post will be added to your calendar and published automatically. Additionally, it has a built-in library of pro photos so that you don’t need to waste your time picking or creating images by yourself.
Turning your followers into customers also becomes much more manageable. You can create a mini-website that will be built into your Instagram profile. So now, users who find themselves uncomfortable switching windows in order to complete purchases can shop directly in the app — each post is clickable and shoppable.
Plus, most social media automation tools integrate across all popular platforms (Facebook, Twitter, LinkedIn, Instagram, Pinterest), offering a one-stop shot application, eliminating the need to jump between windows and separately prepare campaigns for each social media channel.
The result — you will enjoy a steady stream of converting content without spending all day setting up your social media advertising campaigns and planning your posts manually. For more tools for social media automation, check out our blog post.
If you are not investing in AI-based software, now is the time to change your strategy before it’s too late. These tools improve the lead generation process, reduce the number of human resources required, categorize data and make more accurate predictions. And doing so, almost every member of your team benefits from having more time freed up to deal with more complex issues and more important customers. And as a result, you save the bulk of your expenses on your customer acquisition costs. After all, why not test them out?
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