In today’s competitive ecommerce landscape, Customer Acquisition Costs (CAC) are climbing; industry data shows an average increase of 15% year-over-year due to ad saturation and rising costs. But what if you could slash those expenses without sacrificing growth? The answer lies in retention marketing. By focusing on keeping existing customers, you can reduce reliance on expensive new customer acquisition and boost your bottom line. Here’s how.
Why Retention Beats Acquisition
Acquiring a new customer can cost 5-7 times more than retaining an existing one, according to Harvard Business Review. Retained customers also spend 31% more on average and are more likely to refer others. For ecommerce brands, this means retention marketing, more specifically through email and SMS offers a high-ROI strategy to lower CAC while driving revenue.
3 Proven Retention Tactics to Cut CAC
1. Launch a Win-Back Campaign
Target inactive customers with a personalized email or SMS series. Offer a 10% discount after 60 days of inactivity to re-engage them. Data from our work with 300+ brands shows this can recover 20% of lost customers, reducing the need for new acquisition spend.
2. Optimize Post-Purchase Follow-Ups
Send a thank-you email within 24 hours, followed by a product recommendation. This lifts repeat purchase rates by 15%, as seen with a health brand we supported. Fewer new customers needed means lower CAC.
3. Reward Loyal Customers with a VIP Program
Create a points-based email program for repeat buyers. A fashion client saw a 25% increase in retention after launching this, cutting acquisition efforts by 30%. Loyal customers are cheaper to market to than new ones.
Turning Retention into Revenue
These tactics shift your focus from costly ads to profitable retention, potentially slashing CAC by 30% while boosting lifetime value. The key? Tailored execution and data-driven insights.
Ready to lower your CAC? Partner with EcommerceBoost.io, where they’ve driven $50M+ for 300+ brands with expert email and SMS strategies. Book a free Klaviyo or Omnisend audit here to get started.