It’s no secret that during the pandemic, customer acquisition costs (CAC) have been increasing, as businesses struggled to connect with locked down and health-conscious customers in the “new normal”.
Fortunately, over a year into the pandemic, business experts are coming together to tackle CAC conundrums in rebooting businesses.
Analyst site Better Marketing (BM) say CAC ratios are derived from the spend on marketing and sales in a given period (numerator), divided by the number of new customers acquired during that time (denominator). “During the pandemic, traditional offline channels were constrained by the crisis. Therefore, businesses are going to be paying more to acquire the same number of customers. When the numerator grows, costs increase. As for the denominator, firms are winning fewer new customers as a result of the pandemic and companies that sell online are seeing lower conversion rates. Equally, when the denominator shrinks, CAC also increases,” BM said.
That given, the key to re-engaging with customers and decreasing customer-acquisition costs, according to Tech marketing analysts MarTechSeries (MTS), is by responding to how COVID-19 has changed customer interactions. MTS recognises three major actions businesses have taken in order to maximise communication experiences in this evolving climate. The first, and perhaps most obvious, is to go digital.
“Thirty-five percent of consumers surveyed said they will always choose to go paperless with a new provider, compared with 26 percent prior to the pandemic.”
MTS notes that digitally reticent customers are also testing new ways of interacting with their providers. The pandemic has seen first-time interaction types increase, with 36 percent of respondents having made their first online payment, 24 percent making their inaugural online bill or statement access and 23 percent conducting their premiere cheque deposit via a mobile app.
“The pandemic is forcing many companies to accelerate their print-to-digital transformations. The alignment of cost pressures and the necessity for digital communications are shifting company priorities and creating a window of opportunity, therefore the first action to take is to prioritise digital initiatives.”
However, the company said while customers are more open to going digital, it is important for firms to still provide a convenient, engaging and tailored experience.
“Our research revealed that 41 percent of consumers prefer any communication to be simple and intuitive, with 33 percent wanting control of their communication preferences and 29 percent saying they are expecting more personalisation.”
Finally, MTS said it is important for businesses to expand their functionality. “Consumers are communicating in new ways… and companies can engage and retain them in digital channels if they provide optimal experiences.”
With the MTS survey showing 59 percent of consumers will change how they interact with companies over the long-term, embracing new ways of communication is vital.
Businessman Emerald Am, who owns several businesses in Cambodia, said marketing and community outreach has been essential during the pandemic. “I opened Auto Majestic, The Car Wash and Am Tea Teahouse in the fall of 2020 in Chak Angre Krom, Phnom Penh. As with most new businesses with no name recognition, it started off slow. The second [COVID-19] wave hurt us and we saw a dramatic decrease in foot traffic. Walk-ins were near non-existent. We not only upped our efforts in digital marketing, such as offering ‘check-in’ discounts on social media, but we also utilised our employees for grassroots campaigns, talking to local businesses, producing flyers and offering deals on drinks and car wash combos. We also turned to social media influencer Chan Chem and his following on FB [Facebook]. Any place he visits and posts about usually sees an uptick in business,” he said.