Every business shares one common focus: leads. You create amazing ads, reward customer loyalty, pump out stellar content, and maximize your sales pipeline all in the name of leads. And you spend blood, sweat, and tears to get those leads into your funnel. But how much does it cost you? Your cost-per-acquisition (CPA) is the metric that lets you know how you’re spending on each lead. We all know that lead capture is difficult. 63% of B2B marketers consider lead gen their top challenge. So, sometimes, it’s easy to get desperate. But overspending on leads can have a disastrous impact on your overall liquidity. And, in today’s hyper-competitive digital ecosystem, you have to find the fine balance between lead gen and CPA. So how do you get out of the quicksand? How do you lower your CPA without fracturing your pipeline? Here are 4 tips to help you drive down your CPA without driving down your conversions.
1. Don’t Just Target the Right People, Stop Targeting the Wrong PeopleWhen you try to decrease your CPA, the first tips you’ll get is this: increase your targeting. And that works. But it’s not all about targeting the right people. You have to stop targeting the wrong people. If your CPA is too high, you’re targeting the wrong people. It’s as simple as that. There’s a good chance that you’re putting too much emphasis on high-end firmographics. It costs a ton to reach C-level decision-makers. But they’re not the only people who can pull the trigger on your purchase. If you sell marketing software, targeting a CMO isn’t the only way to convert a lead. Harvard Business Review dove into some “hidden” buyers of products. The idea is, the people who use the software have an incredible amount of influence over the actual purchase. Decision-makers are the end-goal, but you don’t always have to reach them directly. Consider targeting the people who are actually going to use your product. They have the ears of C-level, and they may even have veto power. Plus, they’re cheaper to target.
2. Keep an Eye on Your Ad CopyYou need to change your ad copy to keep up with environmental, sociopolitical, and physical changes. Most of us build our copy in advance. So, when springtime comes around, you likely have a slew of spring-oriented campaigns. But what if things change? 90% of marketers changed their copy during COVID-19. Here’s the problem: COVID-19 is an extreme example. It doesn’t take a massive-scale disaster to influence the way consumers perceive ad messages. In today’s hyper-digital age, things change fast. Use these changes as a springboard for new campaigns. And always be willing to go back and re-think your existing ad copy in the face of emerging disruption. If your message is wrong, your CPA will increase. It’s that simple.
3. A/B Test for Cost-effectiveness — Not Just EfficacyA/B testing is the single most impactful tool in your marketing arsenal. But don’t just whip out A/B tests to see which types of content convert the best. Figure out which platforms, ad types, and messages have the lowest CPA. Then, try to combine your highest lead generating strategies with your low CPA strategies. AdWords may get you the most leads. But it may also have a high CPA. Take that into consideration, and A/B test cheaper keywords to see if you can find a healthy balance.
4. Multivariant Headline TestingTesting metrics against content doesn’t have to be difficult. Obviously, whipping up new content to A/B test across granular demographics is an expensive, time-consuming process. But you don’t necessarily need to change your content. Start with your headlines. Create unique URLs for the same content, and use different headlines/images to test for conversions. A/B testing granular components like headlines, CTA buttons, and images is an easy way to iterate constant improvements across your content without spending big on content generation. Eventually, you’ll find winning combos of headlines and images between demographics, which will lower your CPA, boost your conversions, and minimize wasted ad spend.
The material was written with the help of the following resources:
- How to Price Your SaaS Product With Dan Balcauski of Product Tranquility
- Learning How to Transform Your Startup With Steven Hoffman of Founders Space
- Raising the Standard for Quality Content with Charles Frydenborg of MarketMuse
- Designing a Better User Experience With Alejandro Rivas-Micoud of Userlytics
- Finding a Better Solution to CRM with Adam Honig of Spiro