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eCommerce
Thursday, June 12, 2025
While there are a handful of key eCommerce metrics that should be analyzed, Customer Acquisition Cost (CAC) cannot be overlooked as one if the most important out there.
Every business has certain metrics it wants to focus on, to measure strategy effectiveness, areas for improvement and growth progression. And while there are a handful of key metrics that should be analyzed, Customer Acquisition Cost (CAC) cannot be overlooked as one if the most important out there.
Also known as CAC, customer acquisition cost measures the amount of money that the organization spends in order to acquire a new customer. It’s a very important metric because it adds up marketing costs, salaries, and other expenses related to customer acquisition. Establishing the right eCommerce CAC strategy is ideal if you’re looking to remain profitable and achieve sustainable growth.
To calculate CAC you have to divide the total marketing costs for customer acquisition by the total customers acquired, or CAC= MCC\CA. Of course, instead of just the marketing costs, there may be marketplace fees, taxes etc. You want to take all of these into account before dividing the amount by your total customers acquired.
Calculating CAC can be complicated since you need a professional, reliable analytics tool that can streamline this often time-consuming process. Conjura not only helps you track your CAC accurately but also helps you tie it back to products, channels, marketing expenses, and much more. It helps transform your performance data into actionable insights on how to reduce CAC and become more profitable.
If you want to reduce your Customer Acquisition Cost (CAC), a smart strategy is to segment your campaigns by customer type. Not all customers are created equal - new customers typically have a higher CAC because they require more touchpoints and trust-building. Returning customers, on the other hand, already know your brand, making them quicker (and cheaper) to convert.
Conjura makes this easy by letting you view acquisition costs by cohort. You can track CAC across different customer segments and identify where your spend delivers the best long-term value. Tailoring campaigns with segment-specific messaging, offers, and discounts helps lower CAC while boosting ROI.
Not all your marketing channels will perform the same. Often, paid search tends to win, but it has a high CAC. You can use various campaigns that might take longer, yet they give you a better long-term value. Experimenting with different customer acquisition channels and seeing which ones deliver the most profits is extremely important.
Make sure that you’re tracking the CAC for all your channels, be it TikTok, Facebook, Google Ads, email, SEO, and affiliates. Make sure that you understand how much you spend on all these channels and what ROI you can get. Once you know what channels deliver the most profits, it becomes easier to double down on that, and the experience will be much better in the end.
When you try to figure out how to reduce CAC, it’s a good idea to dive into SKU-level ad spend. That’s because not all products will convert equally. Some of them will sell great thanks to ads, while others won’t. And that’s the thing: you want to use a platform like Conjura to track the SKU-level ad spend and ensure you avoid over-investing in products that have very little to low conversion rates.
Without using SKU-level attribution, you can end up spending money on products that don’t justify their costs, so that’s something you want to avoid. Check the marketing performance, and once you identify any expenses that aren’t justified, stop spending more. Otherwise, you can encounter problems like margin erosion and over-investments that will only bring issues in the long term.
Every marketer says that driving traffic towards your website is crucial. The thing is that this only wins half the battle. Sure, you bring people to your website, but how do you generate conversions? If your landing page/website is confusing, slow, or lacks optimization, that’s problematic, and you will lose the attention of your users. So even if it seems like driving traffic is crucial, that’s not necessarily the entire picture.
Stats from Invesp suggest that even a 1% increase in the conversion rate can lead to a 10% revenue for your eCommerce website. It could also bring a 10-20% drop in the acquisition cost, something that’s extremely important to consider.
What can you do here? The primary focus is on optimizing pages that have a high ad spend but a rather low conversion rate. You want to use Conjura’s conversion analytics to see where the users drop off. That could help you identify any situation that needs more attention. Additionally, you also want to optimize your website to be responsive with fast loading speeds. Keep in mind that over 70% of eCommerce traffic comes from mobile, so you need to ensure your mobile customers have an excellent user experience.
Using lookalike audiences can be a great idea because they can boost customer acquisition speed while lowering costs. A lot of brands make the mistake of creating lookalike audiences based on add-to-cart events or page views. However, the best approach is to create lookalikes by using the top 20% of customers based on lifetime value as your main indicator. Don’t just focus on initial purchases. If you combine this with things like predictive analytics, it will make it easier to identify any of the future segments that have a high LTV.
You can use Conjura here as well, simply by tracking the customer lifetime value based on the acquisition source. This data is extremely valuable and can help you build high-performing lookalike audiences. LVT-based audiences are usually more comprehensive and detailed, and they can provide a lot of insight. If you stick with broad data, your lookalike audiences will not provide accurate results, and that’s something you need to avoid.
Retargeting is a great idea because it allows you to re-attract former website visitors. When you try to figure out how to reduce CAC, retargeting sounds like a great idea. It allows you to refocus on former website visitors, which, if you convert, makes it much easier for you to save money. The problem that most companies face when retargeting is that they focus on everyone.
That’s where the problem stems from. Your focus should be on those clients with a high purchase intent. How do you know who those people are? It’s simple: focus on the shoppers who viewed your products 2+ times. That way, you know they have a high purchase intent, but they just aren’t ready to commit now for some reason. Provide them with a reason to get back and buy, such as vouchers/discounts, and you can turn them into a paid customer in no time.
If you’re strategic with your retargeting, you will naturally get a reduction in CAC, along with an increase in ROAS. And not only that, it makes it easier to target clients who are actually on the verge of converting to a paid (and hopefully regular) customer.
A smart way to increase conversions and potentially lower blended CAC is to bundle products that sell easily with those that are harder to move. Some items naturally attract attention and convert well - they can act as the hook. Pairing them with higher-consideration or lower-converting products increases the perceived value and can encourage purchase of the entire bundle.
To do this effectively, you need to understand which SKUs attract new customers at a lower acquisition cost. Conjura helps by attributing ad spend to product landing pages and tracking first-purchase behavior, allowing you to estimate which products are driving customer acquisition efficiently. From there, you can test different bundle strategies and monitor their impact on margins, conversion rates, and blended CAC.
Offering a discount or free gift within the bundle can further sweeten the deal and nudge hesitant shoppers toward conversion.
Customer Acquisition Cost (CAC) is what you pay to bring someone in, but what determines your long-term ROI is how often they come back. The more you retain a customer, the more revenue you generate from that initial acquisition, effectively increasing LTV and making your CAC more efficient.
Retention strategies like post-purchase emails, review requests, SMS upsells, and replenishment reminders aren’t just about engagement - they extend customer lifespan and improve profitability.
Conjura helps by tracking LTV, repeat rate, and retention across cohorts and channels. You can see which campaigns deliver not just customers, but valuable ones, so you’re not just chasing the cheapest CAC, but the smartest one.
Reducing Customer Acquisition Cost (CAC) isn’t always about spending less; it’s about spending better. With Conjura, you can identify which channels, campaigns, and even products are driving high-value customers, so you can focus your budget where it matters most.
Instead of chasing cheap clicks or vanity metrics, Conjura helps you zoom in on what’s actually driving profitable growth. Track CAC alongside Lifetime Value (LTV), and make decisions based on return, not just cost.
Every brand’s data tells a different story. Conjura makes sure you’re listening to the one that leads to smarter, more sustainable growth.
By using Conjura, it becomes much easier to access all the analytics you need to know before making any major business decisions. It delivers all the insights designed to help optimize ad spend and boost profits, all while avoiding bad expenses. Every ecommerce brand knows how difficult it can be to turn a profit, especially in today’s competitive landscape.
Want to give Conjura a spin? Book in a demo with our team today.
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