How to Improve Customer Acquisition Cost:
5 MOST Effective Strategies in 2023

Customer acquisition cost is one of the essential metrics for your business. If you haven’t optimized it yet, you haven’t tapped into the full potential of your business.

(or you might even spend more on acquiring customers than you make.)

…and slowly kill your business.

Let’s prevent that today!

In this post, you will discover everything there is about customer acquisition cost and how to lower it so you can maximize your profitability.

What is Customer Acquisition Cost?

Customer acquisition cost (CAC) is the amount a company has to pay to acquire new customers. It includes the whole process of acquisition – from advertising costs to final purchase.

It’s very useful and can help you calibrate your investment and ensure you’re making the right decisions.

Customer Acquisition Cost vs. Cost Per Acquisition

These two metrics are similar, but they are not the same.

The main difference between the two is that the cost per acquisition metric measures how much resources you have to spend to acquire a lead, not a customer.

A lead can mean a registration, filling in an email form, or signing up for a demo – with no purchase.

(unlike CAC, which refers to customers that made a purchase.)

Also, customer acquisition cost gives you an average cost of acquiring new customers for your whole business, as opposed to CPA which is usually campaign-specific.

How to Calculate Customer Acquisition Cost

To calculate the customer acquisition cost, you need to first select a period of time you’re evaluating for. This can be very helpful as you can compare multiple time periods together and determine whether your CAC improves or not.

The next step is to sum up the marketing and sales costs and divide it by the number of new customers.

Source: Paddle

You should definitely calculate your customer acquisition cost and compare it with customer lifetime value if you haven’t already.

If you want to make your business profitable, your LTV must be higher than CAC.

How to Lower Customer Acquisition Cost

If you’re looking to scale up and grow your business, you need to make your company as profitable as possible. One of the ways to do this is to improve customer acquisition cost.

Here are the 5 best strategies that will help you minimize customer acquisition cost.

#1: Provide Tailored Experience

This tip alone can help you increase your revenues by over 40%. That’s the power of personalization and making your customers feel special.

Source: Exploding Topics

If you are not providing hyper-personalized experience, you are missing out on a big sales potential.

Source: Startup Bonsai

The easiest way to integrate personalization in your business is to:

  1. Segment your audience
  2. Chat with leads in real-time
  3. Add personalized content

You can do that by capturing customer’s data and creating multiple target personas for your business. There are a lot of methods that can help you capture data like asking for feedback, market research, or interviewing existing customers.

#2: Increase AOV

Average purchase value (AOV) refers to the number of dollars customers spend on a purchase. If you can increase this number, each of your customers will become more profitable.

(which will lead to better customer lifetime value, allowing you to spend more on acquisition.)

The way to achieve this is to leverage upselling and cross-selling opportunities. In fact, 73% of marketers say that upsells and cross-sells increase their revenue by 30%. That’s a crazy boost. These two work great because customers are already in a buying state of mind, which makes them more susceptible to your new offer.

Source: Zapier

If you can convince customers that for just a slightly higher price, they can get a lot better results, they might as well give it a shot.

And if they don’t or don’t want to continue with a purchase, you can offer a down-sell.

Source: Shift Shop

The most common objection with buying products is price. If your customers are ready to buy but they decide to back up at the last second, you have to act. There is a very high chance you can still sell to them and save a conversion. You just need to suggest a more reasonable offer.

We allow our customers to create one-click custom upsells to add an extra $20, $40, or $50 per order.

Or save a conversion with down-sells (improving your customer acquisition cost). In fact, that’s one of the main reasons we were able to achieve these incredible results with our customers.

And our customers love it!

Your business deserves the same results too.

Book a demo with us today and start getting the conversion you deserve right now.

#3: Retarget Customers

Retargeting ads allow your business to show targeted ads to the users who visited your website but did not make a purchase.

They can massively improve your conversions and lower customer acquisition cost.

Source: Stable WP

This is mostly because customers need around 7 interactions with your business before they make the final decision to purchase.

You can see exactly what the process of customer retargeting looks like.

Source: Turnkey

To perform this, you need to pick a platform like Facebook or Google Ads and start a new retargeting campaign.

It’s definitely worth it since you’re getting at least 2X in revenue if you know what you’re doing.

#4: Leverage Split Testing

Split testing is a strategy where you divide your customers into multiple groups and run multiple variations of your campaigns simultaneously to see which one performs the best.

It’s the only sure way to know what works best for your customers and business.

Source: Optimizely

…and if you’re consistent, it can lead to significant changes.

Source: Blogging Wizard

Here are five steps to follow for running a successful split test.

  1. Stick to one variable
  2. Set clear objectives
  3. Choose your audience
  4. Run a split test
  5. Take action based on results

That’s it.

Checkout Champ can allow you to get your split testing to the next level by offering a four-way split test. This gives you an opportunity to compare up to 4 different variations at the same time.

This can help you get better results, speed up the whole process, and save you a lot of resources.

Book a demo with us today and minimize the customer acquisition cost right now.

#5: Maximize Customer Retention

Customer retention is critical for maximizing your revenues and helping you make your business more profitable in the long run.

This is mostly because it costs 5 – 25X more to acquire new customers compared to retaining them.

Source: Talon

Think about it – if a customer were satisfied with your product or service, why would he or she not repeat the purchase?

They would, and that’s why selling to existing customers is extremely effective.

Source: SuperOffice

Here are a few ways you can improve customer retention with your customers.

  1. Improve customer support
  2. Start a customer loyalty program
  3. Send a discount after the first purchase

This might not help you directly improve customer acquisition cost. But it will definitely help you increase customer lifetime value, which allows you to spend more on acquisition.

Overall, making your business more profitable and delivering the best customer service.


You need to improve your customer acquisition cost to make the most out of your business. There are a lot of strategies you can use to achieve this. We’ve shared some of the best tactics we used that helped us drive massive results.

It’s time for you to get the same benefits for your business too!

Checkout Champ allows you to do exactly that with features like upsells, cross-selling, 4-way split testing, and tailored experience for your customers.

Book a demo with us today, lower your CAC, and get the conversion you deserve right now.

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