As a marketer, you know you have to spend money to make money. This is especially true when you are trying to generate leads and acquire new customers. But what if there was a way to reduce the cost of lead generation and customer acquisition without compromising either metric.
To help optimize your marketing strategy to reduce the cost of acquiring leads and customers, here are some useful CPL and CAC benchmarks from a recent HubSpot survey of hundreds of marketers.
Most Effective Strategies to Reduce CAC
Customer Acquisition Cost (CAC) is how much a company has to spend to acquire a new customer. In our survey, we found that CAC varied widely between companies and industries—that is, nearly half (48.9%) of the marketers we surveyed said CAC had increased over the past year. Another 48.9% said their CAC remained the same, while only 2.2% said their CAC had decreased.
When we asked marketers they found the most effective strategies to reduce CAC, the majority (67.6%) reported that improving customer retention was one of the most effective strategies. Other strategies that have been reported to be effective are:
- Implement a client referral/affiliation program (62.5%)
- Optimize the sales funnel (57.6%)
- Conduct market research to better understand your target audience (55.8%)
- Use CRM (customer relationship management software) to simplify the sales cycle (53.8%)
Marketing channels with the highest and lowest CAC
Paying attention to the channels you are using and the cost of those channels is another way to reduce the cost of acquiring customers.
Marketing channels with the lowest CAC
In our survey, 59.8% of marketers ranked social media as one of the channels with the lowest customer acquisition cost. 55.8% said the same about email marketing, 41.4% listed experiential marketing and 40.8% said the same about websites and blogs.
Marketing channels with the highest CAC
When asked what marketing channels have the highest CAC, 47.4% of marketers cited paid social, the practice of displaying sponsored ad content on third-party social media platforms. 46.2% said brick-and-mortar events and trade shows were the most expensive, 42.1% said brick-and-mortar advertising, and 42.9% said print advertising.
Most Effective Strategies to Reduce CPL
Cost of leads (CPL) is the money needed to generate new leads. Unlike CAC, the majority of marketers we surveyed (56.2%) reported that CPL has remained largely unchanged over the past year—only 37.7% reported an increase in CPL.
However, almost 70% of marketers still say their companies are working hard to reduce CPL.
60% of marketers tell us that optimizing their website to convert leads into customers is one of the most effective strategies for lowering CPL – which often means making strides to adapt to mobile devices or reducing page load times
Other effective strategies listed by marketers include:
- Analyze campaign performance data (55.9%)
- A/B testing (52%)
- Capitalize on organic search traffic by investing in SEO (52.8%)
- Conduct market research to better understand your target audience (51%)
Marketing channels with the highest and lowest quality leads
Not every prospect is a good prospect—not all of them need or desire to buy a product or service from your company. To make sure you’re reaching your target audience, here’s a breakdown of what marketers say are the channels that drive the highest and lowest quality leads.
Marketing channels that bring the highest quality leads
In our survey, 44.7% of marketers mentioned social media as a channel for attracting the highest quality leads. This could be related to social media apps that rely on targeted algorithms to direct users in the direction of content they like to consume.
41.1% of marketers also use search engine optimization (SEO) as a source of high-quality leads, in addition to content marketing (37.1%), influencer marketing (37.1%) and virtual events, webinars and conferences (38.1%) )
Marketing channels that lead to the lowest quality leads
Our survey found that 38.3% of marketers report that direct mail brings in the lowest quality leads. 37.8% also reported the same for email marketing, and 35% responded to experiential marketing.
Marketing channels with the lowest and highest CPL
Similar to CAC, another way to reduce the cost of lead generation is to find the lowest cost channel.
Marketing channels with the lowest CPL
In our survey, 45.6% of marketers said email marketing has a particularly low CPL. About 40% felt the same about websites and blogs, and 42.6% felt the same about social media. The percentage overlap is because respondents can choose up to three answers.
Marketing channels with the highest cost per lead
Half of the marketers we surveyed mentioned that influencer marketing has the highest cost per lead—a trend stemming from the fact that influencers with large followings tend to have high rates.
44% of marketers say print advertising is the most expensive, and 42.5% say brick-and-mortar advertising. 40.5% of marketers say virtual events, webinars and conferences cost the most.
Now that you know which strategies and channels are most effective in reducing CAC and CPL, you can confidently improve your marketing strategies to attract new and potential customers while saving money.