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  • Writer's pictureAjay Miglani

The rising cost of ecommerce customer acquisition and how you can address it

Updated: Nov 1, 2023

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E commerce as a channel is exciting. A relatively new channel that keeps us fully engaged due to its complexities.

Many brands and startups and cross border sellers are willing to ignore short term losses in the pursuit of growth

What happens after a couple of years when your online business operations are stable, but your cost of customer acquisition is high and rising?

Digital marketing channels that have bidding systems will make it even more expensive for you to spend on search words as your product category gains traction and competition

As an online seller or online brand, you need to find ways to reduce your cost of customer acquisition

Here are some tips:

1. Monitor and micromanage your cost of customer acquisition.

Even if you have big marketing budgets think like an entrepreneur. Test all campaigns. Monitor results frequently - daily if not more than once a day

2. Record your learnings.

It is very easy to forget past campaigns and make the same mistakes again. Each campaign should be discussed between team members so that learnings are shared.

While reflecting on past campaigns we need to consider the current situation. And have the skills and focus to be able to micromanage each campaign using data and insights.

Make one team member responsible to hold all the data analysis and insights in a central location that can be easily shared with other team members.

3. Make good deals with digital marketing channels.

Make them aware of your goals and your customer acquisition costs limits. Let them create plans for you.

4. Leverage your brand marketing and advertising.

Quite often, the E commerce business unit does not work in sync with the brand marketing team. As a result, there could be missed opportunities. If you leverage your brand advertising to also get ecommerce sales, you can reduce the direct cost of customer acquisition of your ecommerce channels

5. Alliances and partnerships.

Several brands can leverage alliances and partnerships with other brands and service providers. Such brand partnerships can bring down the cost of customer acquisition.

6. Influencer marketing.

Working with the right influencers and seeking new emerging influencers to promote your brand. This is a trial-and-error method that can give you some lower cost options.

7. CRM.

If your product has a repeat purchase option or a low product lifecycle you can use a good ECRM tool to target existing customers. This too will bring down the cost of your customer acquisition.

8. Search engine optimization and content marketing.

Search engine optimization is like homeopathy. At first it may not show results. But over time it can be a real winner in reducing cost of customer acquisition. As can be good quality content marketing.

9. Site content and conversion rates.

One of the major wastage points of marketing money is the website itself. Low conversion rates can be due to site navigation, lack of buying guidance, low inventory , stock outs, inadequate product assortments and unclear delivery and other costs and more. Low conversion means high cost of customer acquisition. Think like a consumer and see how your website is easy for consumers to use and buy from

The author is the co-founder of Brand eCommerce and Cross Border ecommerce companies operating in Singapore, India and China

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