How to Reduce Your CAC with Community

Dovetale Dovetale Jan 05, 2021 · 5 mins read
How to Reduce Your CAC with Community
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As Steve Jobs once said, “start small, think big. Don’t worry about too many things at once. Take a handful of simple things, to begin with, and then progress to more complex ones…” While marketing is a complex psychological game, it’s also a consistent re-evaluation of priorities. Taking the time to break apart problems into bite-sized chunks is becoming increasingly crucial for e-commerce brands. One of these problems is how frustrated marketing managers have become with rising customer acquisition costs (CAC). This is the main topic of conversation amongst many brands and business owners. In this post, we’ll help you understand some best practices to reduce customer acquisition through understanding your top customers and fans.

Before we jump into some tips and best practices, let’s break down the importance of relationship building and knowing your customer. In our point of view, marketing is a sales function at scale. That is an important distinction because some teams don’t agree with this determination, and that’s ok! We believe that the best companies know their customers really well, but they also know who their customers are not. They know what to say and what not to say in order to get them to purchase. There could be 10 different ideal customer-archetypes for your product and it’s a pretty complex set of decisions to determine what to say to someone depending on their values. That’s where knowing your customer segments becomes so important. It’s not something you can study, it’s something that you have to feel. You need to feel their pain, you need to understand how your product makes their lives easier, you need to know how your product makes them feel empowered and confident. The only way you can do this is to spend time with them. Once you fully understand different problems and how they apply to different types of people/ businesses, you can repeat similar patterns at scale through marketing initiatives.

Now that we’ve established the importance of relationship-building let’s talk quickly about how to discover your super fans before we get into some tips to help you reduce your customer acquisition costs.

If you already have a lot of customers or fans on social media, by far the easiest way to find your most engaged fans is to post your Dovetale Community page there. Take Terez for example, they posted Instagram Stories and added their Community page in their bio. New community applicants now have an easy way to find your community application page. Naturally, this process sorts out lurkers and helps you find your top people. There are several other ways to recruit your top fans outlined in this post: How to Effectively Recruit Community Members. This post is also helpful for finding your ‘to-be’ super fans, which can be especially useful when you are just getting started as an online merchant.

Tip #1: Use Survey’s to Derive Insights

It’s a competitive world out there. Insights > ideas and when communicated/ productized, insights can help you reduce your CAC (customer acquisition cost). Insights are derived from processing the right data and in order to get this data you need to construct the right collection techniques. With Community, you can build surveys just like you would with Google forms. Take Wandering Bear for example. They make incredible use of survey questions to understand more about their community member applicants.

Questions like “what types of brewing equipment do you have in your home?” can be used to target new niche cohorts on Instagram or “what’s your favorite type of coffee and how do you take it?” can be used to refine keywords on Google search. Generally, this practice will yield lower CPM’s/ CPC’s.

PRO TIP: Teams have also used survey questions to understand more about the psychographics and the demographics of their customer base. This can be a very powerful way to understand the different cohorts that you should be targeting in your marketing initiatives.

Tip #2: Member Activations

Once you have a cohort of community members, your team can construct some campaigns that will dramatically reduce your CAC. Here are some ideas:

  • Drops (we will be doing a larger blog post on this)
  • Affiliate Marketing (you can do this on Dovetale)
  • Gifting
    • Send them a birthday gift. Often times people give genuine shoutouts when this happens!
  • Contests (we will be doing a larger blog post on this)
  • Collaborations (we will be doing a larger blog post on this)

Tip #3: Schedule Regular Check-ins with Your Community

The last tip we have is perhaps the most important. We recommend meeting with your Community once a month preferably over video conference. Learn about what they love, what they don’t, and what blind spots you may have. It’s important to focus on asking the right questions and setting up this environment to feel safe. One of the worst things you could do is treat your Community as an affiliate pool. Shifting this mindset will help you constantly mold your value prop and collect better insights. Again, insights can help inspire your team to make new products, create better ad copy, and more. Here are some final tips:

  • Schedule a recurring meeting with your Community
  • Focus your meeting on the product, messaging, and leveling up your community
  • Track who has been present and who hasn’t. The focus should be on engagement, not the total number of members.
  • Focus on building relationships with the people who care about your business most - foster, grow and thrive together with the members of communities

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Written by Dovetale
Dovetale helps brands big and small create scalable Communities that drive revenue