Balancing customer acquisition costs for ecommerce stores is a big challenge these days. Unwillingly, every store owner is compelled to spend more on acquiring new customers, resulting in low ROI and scalability.
In such times, a cost-effective solution like SEO and content marketing proves to be a game-changer. By combining these strategies, you can reduce the cost of acquiring new customers and increase your store’s customer lifetime value.
In this post, we will share how we helped a skincare brand reduce the customer acquisition cost, aka CAC, by 30% in 10 months.
But prior to that, let’s understand why customer acquisition costs are rising daily in the e-commerce industry!
Why Customer Acquisition Costs Higher in the Ecommerce Industry
Between 2013 and 2022, the average CAC increased by 222%, and the trend continues today, affecting not only emerging brands but also bigger business giants.
Regardless of industry, stores are spending more on acquiring new customers, contributing to a high CAC amount. Do you know why? Here are the reasons!
1. Increased Competition
Due to broader reach, lower operational costs, and convenience, ecommerce has become a top choice among merchants. Each day, a new brand enters the market with its outstanding products.
Stores operating exclusively through Shopify increased by 37% in the first quarter of 2024 and this trend is also noticed on other platforms.
More stores mean high competition, which further implies multiple business stores sell the same product and bid for the same keyword and audiences.
In such a situation, standing out and capturing the target audience’s attention becomes obviously more challenging and expensive.
2. Rising Advertising Costs
In 2021, digital advertising accounted for 63.1 percent of total global advertising spending, and it is expected to grow to 836 billion US dollars by 2026. It is happening primarily because businesses rely heavily on Google, Facebook, and Amazon-like platforms for paid advertising. Frequent algorithm changes and bidding further drive up the acquisition cost.
Under this condition, it becomes difficult for stores to optimize ad spending and target potential customers.
3. Ad Fatigue and Lower CTRs
Ads are effective if they catch users’ attention; otherwise, repeated exposure only leads to disinterest. Stores facing ad overexposure issues have to create more diverse ad creatives and invest in retargeting campaigns. These additional efforts increase ad spending, further raising customer acquisition costs.
4. Privacy Changes and Data Restrictions
Apple’s iOS 14 limits the tracking of user data. Any ecommerce store can access mobile data only if the user agrees to share it. Targeting customers is hard under this condition.
Like Apple, Google has also decided to phase out third-party cookies sooner. After this policy’s rollout, stores that market through advertising channels will see a decline.
5. Increased Customer Expectations
Customers prioritize convenience, accessibility, information availability, and security while shopping online. But providing a fast, smooth, and secure shopping experience raises the expense of delivering those expectations.
6. Content Saturation
81% of shoppers conduct research before purchase. But, there is abundant content available online. Moreover, users prefer surfing results on 1st page. This leads to fewer interactions with brands that are not in the top results and, consequently, lower conversion rates.
So, these are the reasons that are raising customer acquisition costs for ecommerce stores.
Now, let’s discuss how, despite these challenges, we used our strategic optimization methods to reduce CAC for a skincare brand.
Here’s How We’ve Used Our 6-Step Process to Lower Customer Acquisition Costs by 30% for a Skincare Brand (Ecommerce Store)
Like the skincare brand, we have lowered customer acquisition costs for 50+ ecommerce brands. So, the strategies we are going to discuss here are designed and optimized from years of helping online stores.
Without any further hold-up, let’s show you how the journey of achieving a better ROI and 30% reduction in CAC went!
Here’s an Overview
Before contacting us, the store was spending $10,000 to target its audience (through paid advertisement), sales, and marketing strategies. For this amount, they could acquire 500 new customers.
Overall, they were paying $20 to acquire a new customer.
But after we implemented SEO, the total money spent on marketing and sales was reduced to $7000 for the same number of customers, and now it was-
$14 per customer.
Our team of 35 SEO experts and copywriters perfectly lowered the cost of acquiring customers for their business. Here are the solutions that helped us achieve their goals.
1. Strategic Solution for Increased Competition
Following an SEO audit, our team performed a competitor analysis. This helped us determine their existing strategies, competitors’ marketing efforts, and audience needs.
A. Long-Tail Keywords: Using Google Search Console, we identified the search queries driving traffic to the site consisting of long-tail keywords.
The store had already targeted such terms, but those were broad keywords with high competition. So, we performed keyword research focussed on optimizing the site’s content with conversion-oriented long-tail keywords like:
- “buy natural anti-aging serum online”
- “best anti-wrinkle cream for sensitive skin”
Other than this, we covered product-specific long-tail keywords as well; these were:
- ”vitamin C serum for brightening skin tone”
- “anti-aging eye cream for fine lines and wrinkles”
All these terms had lower competition but helped us attract high-intent traffic.
B. Semantic SEO: In addition to researching keywords, our analysts focused on the broader context and intent behind user searches. By including semantic and LSI terms in the store’s content, we attracted more traffic and enhanced overall SEO performance for our client.
2. SEO Solution for Higher Ad Cost
SEO is the best solution for the stores facing higher advertisement costs. Here are the strategies that proved cost-effective for our client:
A. On-page SEO: We optimized on-page SEO elements of product pages with researched keywords to attract relevant traffic to our client’s store. This traffic was more likely to convert into customers, i.e., it held more ROI value than generic traffic from paid ads.
(on-page SEO for the product page of a skincare brand)
Here are the steps we used to optimize on-page SEO:
- Optimized product pages with keywords related to anti-aging concerns like “fine lines,” “wrinkles,” and “age spots.”
- Avoided keyword cannibalization, i.e., prevented multiple pages targeting the same keyword.
- All the product visuals were optimized to load quickly (updated alt-text, right format, and showcased product through multiple angles).
- The URL structure for product and category pages was kept clear and descriptive.
- Blog pages were optimized with strategic internal linking, and FAQs were added there to answer users’ general queries.
B. Off-Page SEO: The real objective was achieving top Google rankings. But, other than paid ads, is there any way to be on the 1st page of Google? Yes, it’s possible by investing in off-page SEO. So, here are the steps that helped us:
- Earned high-quality backlinks from authoritative websites.
- Focussed on natural link acquisition methods.
- Created guest posts for reputable beauty and skincare websites, blogs, and online publications.
3. Addressing Ad Fatigue and Lower Click Rates
We wanted to shift users’ attention from paid ads to organic search, which was possible only when we could provide something engaging and valuable. So, here are the strategies that helped us mitigate ad fatigue and increase click-through rates through SEO:
A. Engaging Content: Content gap analysis informed us what the target audience likes. Accordingly, we shifted our focus to the following tasks:
- Produced high-quality content that addressed common skincare concerns and interests.
- Created different content formats, like articles, videos, and infographics, to engage users, such as“ How to choose the right sunscreen.”
- Effective copywriting for describing products’ specifications.
(Compelling and engaging Product description of a skincare store)
B. User-Generated Content: Customers share their satisfaction through reviews, and when other visitors see such user-generated content, they are convinced to buy the products. So, we adopted the following strategies to broaden our client’s reach:
Published before-and-after photos on the product page directly using advanced image optimization methods.
(Product Results: Before and After Images for a skincare product)
- Optimized these reviews for relevant keywords related to products and skincare concerns.
4. Ways to Adapt Privacy Changes & Data Restriction
When paid advertisers fail to collect data due to privacy factors, SEO emerges as a favorable solution for ecommerce stores. Look how we managed to collect user data in this situation.
A. First-Party Data Collection: We used Google Analytics to gather data on user behavior and recorded their page views, session durations, sign-ups, and referral sources.
Tracking sign-ups, skincare quizzes, and feedback forms helped us gather data for personalized marketing.
B. Content Personalization: Collecting first-party data assisted our efforts, but we did not rely only on user data. Rather, we used the information from Google Analytics to provide what people actually want to see without disturbing their privacy.
After analyzing SEO-driven traffic, we personalized content and product recommendations for them. This step boosted conversion rates and overall revenue growth for our client.
5. Meeting Customer Expectations with SEO Solutions
Prioritizing customer expectations is not about meeting demands but building lasting relationships and driving long-term growth. Following SEO methods helped us reduce return rates and complaints.
A. Enhanced User Experience (UX): We wanted the site to be appealing both for SEO and customers. So, here are the steps that helped us achieve our goal:
- Optimized site speed to lower bounce rate.
- Improved technical SEO aspects, including mobile-friendliness factor, ensuring smooth shopping for skincare users browsing on mobile devices.
- Streamlined category page and other significant page’s website architecture to ensure easy navigation.
6. SEO Strategies for Content Saturation
We successfully positioned the brand as a leader in their industry. Engaging and informative content helped us attract the target audience, and that’s how we built a loyal customer base for them.
A. High-Quality Content: We resonated with their target audience by covering topics related to their interests, concerns, and current industry trends. Our content writers created all these articles after gathering unique information about the products from the client. We ensured that we covered useful and relevant information for the audience.
- Educated them on the benefits of trending ingredients like hyaluronic acid, niacinamide, and retinol.
- Shared DIY routines, skincare myths, and facts.
- Skincare for different age groups.
- Seasonal Skincare Tips.
B. SEO Best Practices: We wrote content, but there was one more important factor that we couldn’t skip. It was its discoverability and ranking well in search engines. So, we optimized on-page aspects like meta tags, headings, and internal linking. We ensured every step we took was according to the best SEO practices.
These steps actually helped us lower the skincare brand’s customer acquisition cost (CAC) by 30%, that too, in 10 months.
Conclusion
In the end, we would like to emphasize that if you’re investing your resources in channels other than SEO to minimize customer acquisition costs, it might be worth reconsidering your approach.
You can save time and let an experienced Ecommerce SEO agency like ours handle your store’s SEO needs. With our effective optimization services, your online success is certain. Let us apply our 13+ years of perfected winning SEO strategies to your store and take it to new heights!
