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Blog Reduce your Cost of Acquisition (CAC) using WhatsApp

Sonakshi Deb Roy

Every investment should yield results, and this holds true for implementing customer acquisition strategies as well. It is crucial to assess the effectiveness of these strategies by tracking the conversion of potential customers and the subsequent purchase behaviour. In large organisations with substantial customer acquisition costs, these expenses are determined by dividing the overall marketing expenditure in a campaign by the number of customers acquired through that specific campaign.

It's widely acknowledged that brands are facing intense pressure to cut down on marketing expenses. The prevailing circumstances include hiring freezes, layoffs, and demanding directives from leadership to achieve more with a reduced budget. With numerous costs associated with selling and marketing products, the challenge is figuring out where to initiate cost-saving measures.

A significant way for marketing departments to trim costs is by lowering the expenses related to acquiring new customers. Customer acquisition costs (CACs) have been on the rise in recent years, reaching as high as $29 per new customer for some businesses.

So what really is the solution? 

WhatsApp!!

WhatsApp Business has become a potent yet often overlooked tool to decrease CACs and enhance return on investment (ROI).

In this blog we will delve into the ways in which WhatsApp Business can be effectively used to reduce CACs and streamline the management of your brand for greater efficiency and profitability.

Exploring the Advantages of WhatsApp Business

WhatsApp Business stands out as a specialised variation of the widely-used messaging app crafted specifically for businesses. It encompasses a variety of features and functionalities tailored to enhance brand interactions with their customer base.\ \ So what benefits does WhatsApp Business offer?

Let’s find out!

  • Customer Communication: Forge a direct and personalised channel of communication with customers, fostering stronger relationships and elevating overall satisfaction.
  • Real-time Support: Swiftly address customer queries, concerns, and support requests, to ensure a smooth and effective customer experience.
  • WhatsApp Campaigns: Develop and implement targeted marketing campaigns through WhatsApp, to generate qualified leads by expanding your reach to a broader audience this personalised channel.
  • Catalogues and Product Lists: Businesses can showcase their products and services directly through WhatsApp. This feature makes it easier for customers to browse and inquire about products, potentially leading to quicker and more efficient transactions.
  • WhatsApp Payment: In some regions, WhatsApp allows for in-chat payment, making it easier for customers to complete purchases without leaving the app, which can streamline the buying process and reduce acquisition costs.
  • Automated Customer Journeys: Utilise WhatsApp Business APIs for streamlining tasks and engagement sequences through Automated Customer Journeys. This not only saves precious time and resources but also ensures a uniform and consistent messaging approach.
  • Interactive Messages: Using interactive buttons in messages, such as call-to-action or quick reply buttons, makes it easier for customers to interact and engage with the business.
  • Analytics and Insights: Gain insights into message delivery, read receipts, and customer engagement through WhatsApp Business analytics. This data can help you quickly refine your marketing and customer acquisition strategies.

How to lower customer acquisition cost (CAC) with WhatsApp Business

WhatsApp Campaigns for Lead Generation

To lower Customer Acquisition Cost (CAC) using WhatsApp, it's effective to focus on specialised campaigns aimed at generating leads. We should consider the benefits of executing these WhatsApp campaigns in reducing CAC while optimising lead acquisition.

  • Use WhatsApp Business for Targeted Messaging: WhatsApp Business functions as a powerful tool for initiating direct and personalised communication with prospective customers. With significant customer information, including demographics, preferences, and buying patterns, businesses can effectively categorise their audience and develop customised campaigns that align with particular needs and interests. The adoption of a targeted messaging strategy guarantees that the appropriate message is delivered to the right individuals, thereby elevating levels of engagement and increasing conversion rates.
  • Maximising Impact with WhatsApp's Advanced Multimedia Features: WhatsApp stands out with its diverse multimedia functionalities, covering images, documents, videos, and audio. Businesses can capture the interest of their target audience and drive them to act by integrating visually engaging content and compelling Calls-to-Action (CTAs). The use of multimedia content empowers brands to craft a lasting and influential experience, thereby greatly enhancing opportunities for lead generation and conversion.
  • Integrate Tracking and Analytics to Assess Campaign Effectiveness: To effectively minimise Customer Acquisition Cost (CAC), it's essential for brands to gain a deep and comprehensive insight into the performance of their WhatsApp marketing campaigns. This involves closely monitoring and measuring the success of these campaigns, and making data-informed optimisations. By incorporating tracking and analytics tools within WhatsApp, brands can keep tabs on crucial metrics such as click-through rates, conversion rates, and levels of user engagement. These valuable insights empower businesses to fine-tune their campaigns using data-driven strategies. This continuous process of refinement and enhancement is key to achieving a higher Return on Investment (ROI), as it enables brands to target the most responsive audience segments more effectively. Peach's WhatsApp Analytics tool stands out by offering brands the ability to create tailored dashboards that track industry-specific metrics, thus providing a more targeted approach to campaign analysis and optimisation.
Implement Programs for Enhancing Customer Loyalty and Retention to Lower Customer Acquisition Costs

By cultivating a sense of loyalty and actively promoting customer referrals, brands have the opportunity to expand their customer base through the power of trusted recommendations. This strategy not only enhances the credibility of the brand but also significantly boosts retention rates. As a result, the Customer Acquisition Cost (CAC) is substantially lowered, highlighting WhatsApp as an unparalleled, cost-effective tool for achieving long-term, sustainable business growth.

  • Start WhatsApp Only Loyalty Programs: WhatsApp-only loyalty programs present an innovative and targeted approach for businesses seeking to reduce Customer Acquisition Costs (CAC) while fostering deep engagement with their audience. By leveraging WhatsApp, a platform with immense reach and user engagement, companies can directly communicate with their customers, offering personalised experiences and rewards. This method capitalises on the intimate and immediate nature of messaging, creating a sense of exclusivity and privilege among participants. Customers enrolled in these programs receive tailored promotions, updates, and customer service, enhancing brand loyalty and encouraging repeat business. As consumers increasingly seek personalised and convenient interactions with brands, WhatsApp-only loyalty programs stand out as a compelling strategy for businesses to remain competitive and cost-efficient.\ \ For instance; Let’s look at a coffee shop using WhatsApp Business. Upon visiting the coffee shop, customers are invited to join the exclusive WhatsApp loyalty program. Once they sign up by providing their phone number, they receive a welcome message on WhatsApp with a digital loyalty card. For every coffee purchased, they get a stamp on this card, and after ten stamps, their next coffee is free.
  • Automated Follow-ups and Order Updates: WhatsApp has undeniably become a central platform for effortless connectivity, leading the way in customer contentment and fostering business growth. The process of reducing Customer Acquisition Costs (CAC) is significantly simplified thanks to the automated follow-up messages and instant updates on orders, all made possible through WhatsApp Automations\ \ This advancement in customer relations focuses on enriching the customer journey with prompt and customised interactions. Brands are able to forge deeper connections with their customers, moving beyond mere transactions to establish trust and loyalty. When customers sense this personalised attention and engagement, their commitment to the brand intensifies. This not only enhances customer retention but also effectively lowers CAC, as satisfied customers tend to stay loyal and spread positive word-of-mouth, drawing in new customers organically.
  • Run Referrals Campaigns and facilitate Word-of-Mouth Marketing with WhatsApp: With WhatsApp, businesses can tap into the power of personal recommendations, which are often more trusted and impactful than traditional advertising. To initiate a successful referral campaign on WhatsApp, businesses should first create an enticing incentive structure that motivates existing customers to refer their friends and family. This could range from discounts, special offers, or exclusive access to new products or services. The key is to make the referral process as seamless as possible; integrating easy-to-use referral links or codes that customers can share directly through WhatsApp enhances the user experience.

WhatsApp serves as a powerful platform for running referral campaigns and bolstering word-of-mouth marketing, helping businesses to reduce their CAC effectively. By building a strategy that focuses on personalisation, ease of use, and incentivisation, companies can utilise the potential of their existing customer base to attract new customers more cost-effectively.

Reduce CAC with Automated Lead Nurturing Campaigns Campaigns

By leveraging automated lead nurturing campaigns on WhatsApp, businesses have the opportunity to access a large audience and utilise the platform's powerful engagement features. This approach can reduce the costs associated with acquiring new customers, all while ensuring communications remain personalised and timely. By embracing the combination of automation and interactive elements on WhatsApp, companies can expect to see a reduction in customer acquisition expenses and a significant increase in conversion rates.

  • Effective Lead Nurturing with Automated Drip Campaigns: Automated messaging sequences can help brands to interact with potential customers regularly and effectively, eliminating the need for continuous hands-on involvement. This automated process provides crucial information in the right way when it is most relevant, helping to maintain the interest and engagement of potential leads.
  • Promptly Qualify Leads with Forms: WhatsApp forms have emerged as the ultimate solution for businesses seeking to streamline their lead qualification process and effectively reduce their Customer Acquisition Cost (CAC). By using forms into WhatsApp, brands can tap into a user base of billions, offering a familiar and convenient platform for potential customers to engage. What makes WhatsApp forms particularly powerful is their ability to host immediate, personalised communication. This not only enhances the user experience but also allows businesses to quickly identify and focus on high-quality leads. The result is a more efficient qualification process that cuts down on the time and resources typically spent on chasing less promising prospects, thereby significantly lowering the CAC. The simplicity and effectiveness of this approach are what make WhatsApp forms an indispensable tool in the modern marketer's arsenal.
  • Lead Segmentation Based on their stage in the Customer Journey: By strategically categorising leads based on their position in the customer journey - whether they're just becoming aware, evaluating options, or ready to decide - brands can enhance engagement significantly. This method involves customising content and promotions to resonate with each stage. Employing focused communication and engaging click-to-WhatsApp advertisements, this tactic efficiently navigates leads through the purchasing process. The outcome is a remarkable reduction in Customer Acquisition Cost (CAC), almost like a magical formula. Utilising WhatsApp as a marketing tool, brands can effectively boost conversion rates while managing expenses effectively.
  • Improved Engagement and Lead Quality with Interactive Campaigns: To elevate the effectiveness of lead nurturing on WhatsApp, utilising interactive campaigns can facilitate engagement with product quizzes, surveys, feedback collection, and tailored product suggestions, helping in attracting more qualified leads. Employing these interactive features, brands achieve more than just capturing the attention of potential leads. They also acquire crucial insights that assist in identifying prospects of higher quality. This data is invaluable for prioritising follow-up actions and concentrating on converting leads that show a strong buying intent, ultimately leading to a reduction in Customer Acquisition Cost (CAC).
  • Product Recommendation to Convert Customers: One innovative strategy that is showing promising results is leveraging WhatsApp campaigns for product recommendations. Imagine you're a customer and you get this message with a product suggestion that seems like it's handpicked just for you. It's not just some random ad; it's like a friend telling you about something they think you'll like. That's the power of personalised product recommendations on WhatsApp. This strategy is not just about pushing products; it's about understanding the customer's needs and preferences, then offering solutions that feel tailor-made. When customers receive tailored recommendations directly on their phones, it builds trust and rapport, significantly increasing the likelihood of conversion.  This approach also capitalises on the convenience factor – customers can learn about and purchase products without leaving their preferred messaging app. By employing WhatsApp for personalised product recommendations, businesses can significantly reduce their CAC by fostering stronger customer relationships, enhancing customer satisfaction, and ultimately driving more conversions through a channel that is widely used.

If you are ready to explore how you can reduce CAC for your business with WhatsApp, reach out to the Peach Team today and get the best out of WhatApp for your business