CACs Are Rising, So What Do We Do???

I am STOKED for you to meet today’s guest, she is a CEO, investor, and GENIUS Marketer.

Meet Heather Horton, CEO of Ecrubox Digital, a Digital Marketing Agency behind some of the biggest brands in the UK.

From how to deal with rising CACs to the most overlooked aspects of Marketing, we touched on it all on The Marketing Millennials Podcast.

Here’s what she had to say in her own liiiiiiightly edited words. 👇

1. The Most Important Thing:

“The most important thing right now because customer acquisition costs (CAC) are rising is to look at every aspect of your customer journey.

Look at more than just the Marketing to acquire customers and hone in on giving your customers the best experience possible with your brand.

The whole goal with rising CAC is to make sure that your customers are going to buy from you again. We’re no longer living in a Marketing world where a one off order is going to lead to long term growth and profitability. 

If you’re spending a lot more money to acquire customers now, they’re going to have to bring back a bigger lifetime value for your brand.

It’s all about the second order, the third order, the fourth order, not just the initial acquisition and then churning that customer. 

Brands that are now launching need to look at their Marketing spend and acquisition costs and pin their spend against the lifetime value of customers (this will show you the health of your business!!).

When you know this data you will either stop spending on Marketing because there will be no ROI or you’ll end up in a position where you run out of cash.

The funnel is changing and becoming more of an hourglass, it’s not about funneling people through and getting them to make a purchase anymore. You need to funnel customers through, get them to make a purchase, and then the funnel builds out again for loyalty and lifetime value. 

2. This IS Marketing:

One of the most underrated areas of Marketing (which a lot of people don’t even consider Marketing), is your logistics and customer service side of your business. 

The experience of the packaging, opening the product, and how the product looks, that’s just as important as the shopping experience and buying your product in the first place.

On top of that, any interactions that the user has with customer service, either while they’re shopping, your returns messaging, FAQs, or help guides, these are all things that are going to make sure your customer has the best experience possible with your brand.

When this is flawless it will make them more likely to buy from you again. This does only take you so far though, if someone bought from you and had an amazing experience, great, they may talk about it to their friends and refer your product.

But in order to get them to convert with you again, you need to start actively targeting them with ads or emails and show them other products that would be of interest.

This is where a really strong product development cycle comes into play (interesting, tell me more).

A lot of brands who have launched with a single SKU (stock keeping unit) of products are relying on that customer to buy once and then refer it to friends.

If you don’t have new product development in the pipeline that the same customer is going to be interested in and buy, it is hard to keep the customer because they have no incentive to keep coming back.

3. Thoughts on Data:

The power that brands really have now is in building their own walls around their communities and honing in on their own customer data, because of things like Google Chrome removing third party cookies.

We need to get to know our audience ourselves (YES). 

There are a lot of ways to generate data outside of email capture, the best way we’ve found is lead generation campaigns with useful content.

For example we work with a baby brand, Kit & Kin, they’re an eco diaper and wipes brand (cute af).

They have created a ton of useful content for first time parents, how to pack your hospital bag for when you’re delivering your baby or useful things like when to size up the diaper.

And it has really worked well for them, especially on Meta lead gen campaigns to deliver email addresses for quite cheap. 

Another way we’re acquiring more email addresses is just improving account areas on websites. 

The days of, “Sign up for an account on our website because you purchased something” are gone.

There needs to be something that consumers get out of that account area otherwise why would they sign up and create a profile? It’s just another log in they’ll have to remember.

Looking at actual useful functionality in the account area beyond just tracking your order is a way that can help you build up first party data.

4. Don’t Fall into this Trap:

A lot of businesses out there still rely on Amazon as a core channel for selling their products

That’s great, it can bring in a huge amount of revenue for you, but there are downsides.

Not only are you going to be paying a much bigger margin to Amazon than you would if you were acquiring that customer through your own brand website, but Amazon owns that customer, not you (love this call out).

When someone buys from Amazon you don’t have that data to then go back to the customer and email them.  

So any brand that is relying heavily on Amazon should definitely be looking to make sure that the only buyers they’re getting on Amazon are the people who are just straight up Amazon buyers and you’re not going to get them to buy anywhere else.

In order to compete with Amazon, you need to make sure that the experience of shopping directly through your website, the journey, and every touch point really differentiates you from pointing and clicking on Amazon. 

And I think a brand doing this really well right now is Stitch Fix with quizzes, shopping guides, and content that they have on their site. 

That is going to help them stand out against the ease of use on Amazon.

5. Where is Your Audience:

Truly think about where your customers are. What platforms are they spending their time on? 

I’ve seen a lot of brands just assume that going for Meta advertising made sense for them, but when they did the research they found the majority of their audience is likely to be on TikTok.

So their spend wasn’t even hitting the right target. 

This all comes back to making sure that you don’t let the algorithms take charge of where your budget is being spent, because a lot of mistakes and wastage happens there. 

And one last inside scoop, we’ve seen a real resurgence of direct mail being effective.

It’s one of those things where if you’re getting flooded with direct mail all the time, you’re likely to ignore it, but we all stopped getting flooded with direct mail. So now we pay more attention to what it comes through. (THIS IS INTERESTINGGG)”