Studies show that organic marketing like SEO can effectively drive customers to the brand's store at a much lesser cost than paid adverts.
A company's cost to acquire a single customer is Customer Acquisition Cost (CAC), which includes product costs, labour costs, and marketing costs. Businesses can calculate CAC by dividing total marketing spend by the number of customers acquired. On average, the CAC for small ecommerce brands in the arts and entertainment industry is around $21, business and industrial is $533, clothing, shoes, and accessories are $129.
A Shopify 2021 study shows that social media contributed around 32.2% to business revenue, while paid social contributed 14.2%, and email marketing contributed around 12%. The article suggests that businesses need to prioritise organic marketing – like email marketing, social media, SEO and referral marketing- to lower customer acquisition costs – over paid channels.
Businesses should also increase their Average Order Value (AOV) by creating an order minimum for free shipping, bundle products or create packages, upsell or cross-sell complementary products. Incorporating live chat to answer customer queries in real-time can also help companies increase sales and AOV. Further, focus on lowering the cost of goods sold and track customer data precisely.
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