As a marketer, you know you have to spend money to make money. This is particularly true when you're trying to generate leads and acquire new customers. However, if there are ways to cut the cost of lead generation and customer acquisition without undercutting either metric.
To help refine your marketing strategy to lower the costs of acquiring leads and customers, here are some helpful CPL and CAC benchmarks from a recent HubSpot survey of hundreds of marketers.
Most Effective Strategies for Lowering CAC
Customer acquisition cost (CAC) is how much a company has to spend to get a new customer. In our survey we found that CAC varies a lot between companies and industries — that said, almost half (48.9%) of the marketers we surveyed said CAC has increased in the past year. Another 48.9% reported their CAC has stayed about the same, and only 2.2% said CAC has decreased.
When we asked marketers what they found to be the most effective strategies in lowering CAC, the majority (67.6%) reported improving customer retention among the most effective. Other strategies reported to be effective are:
- Implementing a customer referral/affiliate program (62.5%)
- Optimizing sales funnel (57.6%)
- Conducting market research to better understand the target audience (55.8%)
- Using a CRM (Customer Relationship Management Software) to streamline their sales cycle (53.8%)
Marketing Channels with the Highest and Lowest CAC
Being mindful of the channels you're using and how much those channels cost is another way to lower the cost of acquiring customers.
Marketing Channels with the Lowest CAC
In our survey, 59.8% of marketers listed social media as one of the channels with the lowest customer acquisition costs. 55.8% said the same about email marketing, 41.4% listed experiential marketing, and 40.8% said websites and blogs.
Marketing Channels with the Highest CAC
When asked what are the marketing channels with the highest CAC, 47.4% of marketers mentioned paid social, which is the practice of showing sponsored advertising content on third-party social media platforms. 46.2% said physical events and trade shows are the most expensive, 42.1% said physical ads, and 42.9% said print advertising.
Most Effective Strategies for Lowering CPL
Cost-per-lead (CPL) is how much money it takes to generate a new lead. Unlike with CAC, the majority of marketers we surveyed (56.2%) reported CPL has stayed about the same in the past year — only 37.7% said CPL has increased.
However, almost 70% of marketers still said their company is working to reduce CPL.
60% of marketers told us optimizing their website to convert leads into customers is among the most effective strategies for lowering CPL — that generally means taking strides like adapting websites for mobile devices or reducing page load times
Other effective strategies listed by marketers are:
- Analyzing advertisement campaign performance data (55.9%)
- A/B testing (52%)
- Leveraging organic search traffic by investing in SEO (52.8%)
- Conducting market research to better understand target audience (51%)
Marketing Channels with the Highest and Lowest Quality of Leads
Not every lead is a good lead — they don't all have the need or desire to buy a product or service from your company. To ensure you're reaching your target audience, here is a breakdown of channels marketers said attract the highest and lowest quality of leads.
Marketing channels resulting in highest quality of leads
In our survey, 44.7% of marketers mentioned social media as being a channel attracting the highest quality of leads. This could have to do with social media apps relying on targeted algorithms that point users in the direction of the content they like to consume.
41.1% of marketers also Search Engine Optimization (SEO) as a source for high quality leads, along with content marketing (37.1%), influencer marketing (37.1%), and virtual events, webinars, and conferences (38.1%)
Marketing Channels Resulting in the Lowest Quality of Leads
Our survey found 38.3% of marketers reported direct mail resulted in the lowest quality of leads. 37.8% also reported the same for email marketing, and 35% answered with experiential marketing.
Marketing Channels with Lowest and Highest CPL
Similar to CAC, another way to lower the cost of generating leads is to look to channels with the lowest costs.
Marketing Channels with the Lowest CPL
45.6% of marketers reported in our survey that email marketing boasts particularly low CPL. About 40% said the same about websites and blogs and 42.6% said the same about social media. Percentages overlap because respondents were allowed to choose up to three answers.
Marketing channels with highest cost per lead
Half the marketers we surveyed mentioned influencer marketing as having the highest cost per lead — a trend that stems from the fact that influencers with large followings tend to have high rates.
44% of marketers reported print advertising to have the highest cost, and 42.5% of marketers said physical ads. Virtual events, webinars, and conferences were said to have the highest costs by 40.5% of marketers.
Now that you know which strategies and channels are the most effective for lowering CAC and CPL, you can confidently refine your marketing strategy to attract new customers and leads while also saving money.