Click on your website or your Call to Action (CTA). In other words, it is the expenditure that one needs to undertake to obtain an additional paying customer.
Thus, CPA or Cost Per Acquisition = Total Marketing Cost / Number of Conversations
‘Conversions’ refers to those who click on your website or your call to action. Just by the look of the formula above, it is evident that to minimize your CPA, you will be required to either reduce the numerator (Total Marketing Cost) or maximize the denominator (Number of Conversions), however, from a marketing perspective, it is wise to choose the former over the latter. Yes, it is easier and more efficient to reduce your marketing cost than to maximize the number of conversions, since to maximize the number of conversions, you might be required to spend additional money.
The strategy of reducing marketing cost over maximizing the number of conversions can be referred to as ‘optimizing costs’ which means that you don’t spend either more or less on each conversion.
Today, we will be sharing a plethora of strategies with you that will help you optimize your cost per acquisition or conversion-
- Optimize your Landing Page : What’s the landing page? Well, it is the page that a potential customer or viewer will first see when they click the link that you provide in your CTA. As you can understand, unless the first page they see hooks them onto the thought of making a purchase, there is a high chance that you might lose an acquisition. Landing pages can be generic or targeted and although a targeted landing page is usually more effective, it is not a bad idea to conduct a test to find out which works best for your business. A generic landing page is one that remains constant for all links that you share across your CTAs while a targeted landing page differs from one CTA to another. You could conduct a test to figure out which type of landing page is helping you boost conversion rates and eventually reduce your CPA.
- Make use of Retargeting Methods : We couldn’t emphasize more on this! Retargeting is the process of approaching a potential customer again (through different means), who has previously visited your website. Why does retargeting matter? Well, for starters, a potential customer who has already visited your page has a higher chance of becoming a paying customer than someone who has never visited your page and thus, has not shown interest in your products or services yet.Retargeting works by adding a code to your website that helps you understand who has visited your website. Then, they are added to your retargeting list which you can leverage to showcase similar ads to them.Pro Tip: Although a number of viewers may visit your website, it is a best practice to target those who have abandoned shopping baskets, since they have shown an even higher level of interest in purchasing your products than anyone else. Thus, with certain offers or other strategies, they may just become paying a customer.
- Pause any strategies targeting low sales or no sales locations : As per the Pareto Principle, 80% of consequences arise from 20% of causes which also applies to marketing! In other words, 80% of your sales (or a majority of your sales) may be generated from 20% of the locations (or a particular set of locations). Therefore, unless you have the cash to spend on testing new markets, it is imperative that you focus your resources on the maximum revenue-generating locations until you have the bandwidth to invest in other locations.
Example: If you are currently investing your resources in Delhi, Gurgaon, Noida, Faridabad, and Ghaziabad but 80% of your revenue is generated from just Delhi, it is more prudent to concentrate your marketing investments on Delhi while pausing investments in the remaining 4 cities until you have additional capital.
Above are 3 major ways in which you can optimize your Cost per Acquisition (CPA) by either maximizing the number of conversions or by minimizing the marketing cost. At YNG Media, a Digital Marketing Company in Delhi, we will help you with several additional approaches to optimize your CPA for a wholesome return on investment (ROI).
