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. However, if there are ways to reduce the cost of lead generation and customer acquisition without undermining any metrics.
To help refine your marketing strategy to reduce lead and customer acquisition costs, here are some helpful CPL and CAC benchmarks from a recent HubSpot survey of hundreds of marketers.
More effective strategies to reduce CAC
Customer acquisition cost (CAC) is the amount a business must spend to acquire a new customer. In our survey we found that CAC varies widely across companies and industries; however, nearly half (48.9%) of marketers we surveyed said CAC has increased in the past year. Another 48.9% said their CAC has stayed about the same, and only 2.2% said their CAC has decreased.
When we asked marketers what they found to be the most effective strategies for reducing CAC, the majority (67.6%) reported that improving customer retention was among the most effective. Other strategies that have been reported to be effective include:
- Implementation of a customer referral/affiliation program (62.5%)
- Sales Funnel Optimization (57.6%)
- Carrying out market studies to better understand the target audience (55.8%)
- Using CRM (customer relationship management software) to streamline your sales cycle (53.8%)
Marketing channels with the highest and lowest CAC
Considering the channels you use and how much those channels cost is another way to reduce the cost of customer acquisition.
Marketing channels with the lowest CAC
In our survey, 59.8% of marketers listed social media as one of the channels with the lowest customer acquisition costs. 55.8% said the same about email marketing, 41.4% said experiential marketing, and 40.8% said websites and blogs.
Marketing channels with the highest CAC
When asked which marketing channels have the highest CAC, 47.4% of marketers cited paid social media, which is the practice of displaying sponsored advertising content on third-party social media platforms. 46.2% said physical events and trade shows are the most expensive, 42.1% said physical ads and 42.9% said print advertising.
More effective strategies to reduce CPL
Cost per lead (CPL) is the amount of money it takes to generate a new lead. Unlike CAC, the majority of marketers we surveyed (56.2%) reported that CPL has remained roughly the same in the past year: only 37.7% said CPL has increased.
However, nearly 70% of marketers still said their company is working to reduce CPL.
60% of marketers told us that optimizing their website to convert leads is one of the most effective strategies for reducing CPL; this usually means taking steps like adapting websites for mobile devices or reducing page load times.
Other effective strategies listed by marketers are:
- Analysis of advertising campaign performance data (55.9%)
- A/B testing (52%)
- Leverage organic search traffic by investing in SEO (52.8%)
- Conducting market studies to better understand the target audience (51%)
Marketing channels with the highest and lowest lead quality
Not all leads are good: Not all have the 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 the channels marketers say attract the highest and lowest quality leads.
Marketing channels that result in the highest quality leads
In our survey, 44.7% of marketers cited social media as a channel that attracts the highest quality leads. This could have something to do with social media apps that rely on targeting algorithms that point users in the direction of content they like to consume.
41.1% of marketers also cite search engine optimization (SEO) as a source of high-quality leads, along with content marketing (37.1%), influencer marketing (37.1% ) and virtual events, webinars and conferences (38.1%).
Marketing channels that result in the lowest quality leads
Our survey found that 38.3% of marketers reported that direct mail resulted in the lowest quality leads. 37.8% also said the same for email marketing and 35% answered with experiential marketing.
Marketing channels with lowest and highest CPL
Similar to CAC, another way to reduce the cost of lead generation is to look for channels with the lowest costs.
Marketing channels with the lowest CPL
45.6% of marketers reported in our survey that email marketing has an especially low CPL. About 40% said the same about websites and blogs and 42.6% said the same about social media. Percentages overlap because respondents could choose up to three answers.
Marketing channels with the highest cost per potential customer
Half of the marketers we surveyed mentioned that influencer marketing had the highest cost per lead, a trend that stems from the fact that influencers with large followings tend to command high rates.
44% of marketers said print advertising had the highest cost, and 42.5% of marketers said physical ads. Virtual events, webinars and conferences were said to have the highest costs for 40.5% of marketers.
Now that you know which strategies and channels are most effective at reducing CAC and CPL, you can confidently refine your marketing strategy to attract new customers and prospects while saving money.