How To Lower Customer Acquisition Cost (CAC) in a Saturated Digital Market
Customer acquisition costs have risen by 60% in the past five years. That means your organization now has to pay significantly more, but you’ll still acquire the same number of customers. For small businesses and startups working with lean marketing budgets and competing with larger organizations, costs have gone from inefficient to practically unsustainable. So what can you do to lower customer acquisition costs?
First, it helps to understand the bigger picture. For instance, the cost of digital ads, often a key component of customer acquisition cost, is also climbing. Growing companies attempting to capture audience attention are finding that it’s now more highly distributed across a range of platforms than ever before. And with more companies entering the market and vying for the same ad opportunities, they all become increasingly expensive. Current forecasts suggest global digital advertising spend will reach $836 billion by 2026. More companies are fighting to spend their share, meaning prices will continue to rise.
Next, your team will have to take intentional steps to lower customer acquisition cost (CAC). But here’s our inside scoop: reaching a lower customer acquisition cost doesn’t necessarily mean slashing your budget. Instead, your team will need to make carefully planned marketing decisions guided by analytics and adaptability.
By shifting away from rigid, one-size-fits-all marketing models and toward performance-focused strategies, startups and small businesses can lower customer acquisition cost without giving up growth.
Let’s see what that looks like.
Why CAC Is Getting Out of Control
If your team is struggling to lower customer acquisition costs, you’re far from the only one. In the current digital environment, three major challenges are driving up CAC:
1. Increased Competition on Ad Platforms
Popular platforms like Google, Meta, and LinkedIn are pay-to-play tools, especially for tech and B2B companies. As more companies allocate their advertising budget to these platforms, you’ll likely find that the CPC your team budgeted for last quarter has now doubled due to keyword inflation. Your team might have started out with an efficient paid strategy early on, but with costs rising, your plans can start to break down.
2. Fragmented Audiences
Another factor impacting CAC is the proliferation of platforms and touchpoints. Users switch between websites, apps, and social platforms constantly, so reaching your target audience with the right message at the right time now takes an interconnected strategy and consistent marketing testing.
3. Short-Term Thinking
Quick-win acquisition tactics can feel like the best default approach for startups and small businesses. These typically include paid search, sponsored content, and boosted social posts. While they help expand your reach temporarily, you’ll still need a cohesive long-term plan designed to nurture, convert, and retain leads to connect with the right users and avoid burning through your ad spend.
The High Cost of One-Size-Fits-All Marketing
To bring in the expertise needed to lower customer acquisition cost, many companies explore two main options: building an in-house team or hiring a traditional marketing agency. However, it’s important to note their limitations:
Expensive In-House Marketing Teams
While bringing on full-time hires and building your own team might sound appealing, the reality comes with a few challenges. It can be expensive to recruit, train, and retain internal hires, especially if your needs fluctuate from one quarter to the next. Companies with limited resources might not be able to create a team of professionals with the necessary experience across paid media, content, analytics, and strategy all at once.
For startups and small businesses, the end result is often marketing spend that doesn’t drive performance and CAC that continues to rise.
Rigid Retainer-Based Agencies
Many marketing agencies operate with baseline requirements that demand a minimum spend and lock your team into a fixed scope of work. While this comes with a few issues, one of the most glaring is that your contract might not even align with your company’s position, needs, and goals. That misalignment often leads to wasted budgets and underwhelming results.
Marketing Models Built to Lower Customer Acquisition Cost
But not all agencies take the same approach. Möve Marketing offers a points-based model built to help small businesses and tech startups remain lean while embracing flexibility and focusing on results.
Here’s how it works:
- Buy points to choose from a full range of services that you can use whenever you need them, whether it’s building landing pages, email campaigns, or ads.
- Allocate points flexibly each month depending on your latest performance, goals, and priorities.
- Track progress transparently in Möve’s client portal to see exactly what work is being done and how you’re driving results.
This cost-effective approach helps you focus on just the marketing initiatives you need. Over time, it can help your team lower customer acquisition cost without prohibitive overhead expenses.
CAC-Focused Tactics That Actually Work
A points-based model is an adaptable and efficient upgrade to the typical agency approach. It allows your team to experiment with channels, tactics, and messaging that you might not have tested before so you can double down on what performs and cut what isn’t working. Here are a few tactics we often use to lower customer acquisition cost:
SEO & Blog Content for Inbound Traffic
Organic traffic is still one of the most cost-friendly ways to drive acquisition. Producing high-quality, optimized blog content that builds user trust and brings in search traffic will help your brand build up awareness and authority over time without the recurring costs of running ads.
Email Nurture Sequences
Leads not converting right away? That doesn’t mean you should throw them out. Gradual, informative lead nurture campaigns help guide your prospective users down the funnel with carefully selected content. Our email campaigns have helped clients improve their email marketing metrics, including a 20% increase in marketing email open rates quarter over quarter, and achieve more conversions across the board. With an increased overall conversion rate, our clients also see lower customer acquisition cost metrics.
Conversion-Focused Landing Pages
We build and optimize landing pages that can help you convert traffic from email, search, or paid campaigns. Testing small adjustments like benefit-driven CTAs and copy or mobile-optimized designs can significantly improve conversion rates—and lower customer acquisition cost.
Lowering CAC = Learning, Not Just Cutting
Some companies try to lower CAC by cutting spending. But without new learnings along the way, you won’t see real CAC improvement.
Here’s what we recommend:
- Use a/b testing to refine messaging and creative
- Track CAC by channel, campaign, and time frame—then use key takeaways to reallocate your budget
- Work with strategic marketers to overcome growth-stage challenges
Final Thoughts
Achieving a lower customer acquisition cost in a saturated market requires thoughtful strategy and spending. Here’s what the right approach can help you accomplish:
- Inbound systems that scale sustainably
- Lead nurture campaigns that turn leads into customers
- More testing and iteration in campaigns
- Marketing execution aligned with real business outcomes
At Möve Marketing, we built a flexible, transparent points-based model to help you grow without wasted time, effort, or budget. We work with startups and small businesses every day to optimize CAC and facilitate sustainable growth.
Want to see how our flexible marketing services lead to a lower customer acquisition cost? Let's talk.
