Conversely, there are steps you can take to decrease your CAC. You can lower it with one or more of the following approaches:
- adopt cold-calling 2.0
- make customer profiles
- increase lead quality and relevance
- automate as much of sales as possible
- separate leads development and account management
- A/B test to optimize sales related activities
Here is the breakdown of each one:
Adopting cold-calling 2.0
In the new generation of outreach, cold calling has been shown to not be as effective as in previous generations, but it doesn’t mean that there isn’t a time and place for it, for example, when you understand through other channels that a certain company is highly interested in your product, it is best to just give them a call. However, as a first form of contact with a cold lead, there a fewer and fewer situations where cold calling seems to be the most effective.
The great news is that as one type of outreach goes out of fashion, new forms appear, and in this case it’s cold emailing which has two major advantages, one, you’re able to send multiple personalized emails at the same time, and two, you’re not obligating the recipient to answer right away, which means that you avoid disrupting their work flow.
The latest generation of cold outreach is being forced to go one step further by utilizing other channels like LinkedIn, Xing and other social media because email is also getting more competitive and noisy.
By implementing these strategies you’ll increase the chance of converting a prospect into a customer and consequently lower your CAC.
Making customer profiles
When doing you outreach you need to establish a customer profile so that you can increase personalization by customizing the main aspects of your email (email message, subject line, etc). Here are some factors to consider when creating your customer profile:
- type of company (b2b or b2c) –
companies that want to target other business or that go directly to consumer
- number of employees –
companies from SMBs to Enterprise level
- target market – companies in a specific industry
By separating customer profiles you understand each prospect profoundly and you can personalize your messaging to maximize each interaction, which will lower your CAC.
Increasing lead quality and relevance
A lot of companies that rely on cold outreach need to create lists of prospects to target, which frequently ends up in them buying the cheapest leads from low quality vendors and getting mediocre results.
In our experience, this is not the best solution because reaching out to leads of bad quality equates to lower engagement with your emails, higher bounce rates, decreased domain health, and, in the long run, you’ll also pay more per conversion.
There are two main ways to attain higher quality data, one, you form an internal prospecting team whose only purpose is to provide you with quality leads, but the downside is the time and money spent on training the staff; second option it to partner up with a reliable vendor in the data research sector that can provide you with high-quality data enriched and/or verified by extensively trained humans and software. Even though the price per prospect might be higher, the deliverability of your campaigns will be too which will lower your CAC.
Automating as much of sales as possible
The first automatable task is that of prospecting and list building, which should be automated or outsourced whenever possible. Even though the customer profile might change depending on the market, it will remain the same within the same industry.
Reaching out to prospects can also be automated after the creation of email templates, by using software that enables you to send emails which are customized for each decision maker through dynamic placeholders.
Finally, objection handling and qualifying prospects can be automated but only once you understand the different possible replies of prospect, by creating specific templates for each response.
Through automating all of these stages of the sales development process you’re in a position to invest more time in tasks that cannot be automated which will provide you with more conversations, demos and closes per unit of time, consequently decreasing the CAC.
Separating leads development and account management
Generally speaking this process is only relevant for bigger sales teams that have the ability to separate into two departments, even though you can still accomplish this with only two people.
The purpose of dividing sales development and account management is to increase the productivity of team members by specializing in fewer tasks. Over time, this will result in the optimization of the process which would lead to a lower CAC.
A/B testing to optimize sales related activities
A/B testing should be an integral part of your process, especially regarding subject lines and email templates that require experimentation to find the highest performing copy.
However, this concept can also be extrapolated to other branches of the funnel, for example, to test if its better to schedule a call or demo, or to assess if the objection handling should be more or less aggressive, or to evaluate who are the best decision makers to target, or even to investigate if it’s superior to reach out first through email or LinkedIn.
Again, there are other steps you can take to decrease your CAC but these are the ones I recommend cause I’ve personally deployed them and seen their effects first hand.