How to reduce your Customer Acquisition Cost in the face of difficult economic times
I know for a fact this article will be valuable to everyone in this group seeking to grow their subscription box while keeping their costs under control
As we all know prices for everything are going up…
That means your own product costs have likely taken a hit which puts pressure on your business to survive in the current climate
On top of that issue is, it’s now even harder to get people signed up as the grip of inflation is hitting our customers’ pockets and whispers of an impending recession
All of this is having an effect on consumer confidence, which slows down sales as people anticipate harder times. When investing in advertising this means someone who would have signed up for your box 3 months ago is now hesitating
This leads to higher advertising costs due to more difficulty in convincing people to join your box or membership
The sad thing about it is, there’s pretty much nothing you can do to control the macro-economic environment any more than you can control the weather
So let’s focus on what we can control…
Here’s my top 3 things you can do to reduce your Customer Acquisition Cost even when things are looking bleak for everyone
1. Focus on your conversion rate
Your conversion rate is one of the most effective levers you can pull to improve the results for your business without spending another cent on ads.
If you can convince more people who visit your website to become a customer, you will be well on your way to increasing sales and reducing advertising costs per subscriber.
Here’s what you can do right away to increase your conversion rate:
- Make sure the imagery of your box is in high res and makes your box look amazing (I mean really amazing)
- Edit and remove any unnecessary words – use as little text as possible while still making sense
- Offer a guarantee – the increase in sales will cover any customer returns 10X over
- Have strong social proof – happy customer reviews WITH images
- Come up with a killer offer – something to get customers REALLY excited about signing up
2. Get serious about email marketing
If you can capture an email address from everyone who visits your website, you’re building a new sales channel for yourself.
Not to mention, emailing a list doesn’t cost anything and you can contact them over and over again. So if you want to increase your sales and reduce the cost you’re paying to get a customer, you need to get as many emails as possible from your website visitors.
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One of the best ways to do this is to create a signup flow, which is a simple survey that asks your customers some information about themselves and then suggests the most appropriate subscription for themselves.
A cool thing about a signup flow is you can match their answers with their email so if they say they have a 10 year old kid and your box is for children of ages 3-15 then you can tailor your messaging to the different segments of your lists EG by age. You can send emails appropriate to that child’s age group, making your emails much more targeted & effective.
A sample signup flow for a snack subscription box would look like this:
- Q1 – what’s your name?
- Q2 – are you a vegan or non-vegan?
- Q3 – Are you trying to lose weight or gain muscle?
- Q4 – What’s your email address?
- Q5 – Choose your subscription
- Q6 – Would you like to get our premium snack box?
After entering all of this info they are redirected to the checkout to complete their purchase. This setup is in use by some of the biggest subscription boxes in the world including BarkBox, KiwiCo and Dollar Share Club.
If you don’t have this set up, you’re missing out on a TON of extra sales, emails and revenue for your business.
3. Blast your SMS list
If you have your customers’ phone numbers from shipping their boxes to them, you can consider doing a one-time SMS blast to them. For your current customers you can run a promotion to your online store to make some extra money from your subscribers.
Even more exciting is to send an SMS to your cancelled customers to get them to re-join. Some of you may have seen we recently did this and signed up 100 people in one day! The good thing is because you won’t be paying any advertising costs to FB for these, you can get a bit more generous with your SMS offer to really entice people to re-join.
Another thing about using a signup flow is you can actually collect phone numbers too and run a weekly SMS campaign to the most recent leads to give you a weekly sales boost, Friday is a good day to do this. This is our latest test we’re trying to see if we can open up another sales channel for our box.
I hope this was helpful for you to get started and you can put some of these tips into action today.
Feel free to ask any questions below and I’ll get back to you