When marketers aren’t dreaming of unlimited budgets, viral videos with millions of views, and getting The Rock to be their brand ambassador, they’re dreaming of ways to lower their customer acquisition costs or CPA. That’s because your CPA is one of the best ways of measuring marketing effectiveness and efficiency. The majority of this metric often lands in spend on paid media, like paid search and social media ads. According to Google benchmark data, the average Google Ads CPA in retail is $44 while computers & electronics face CPAs upwards of $100—so it can be hacking out a big chunk of your revenue.
Lowering your CPA allows you to not only control costs but reallocate your savings to the most successful campaigns so you can drive more revenue. And what do marketers love more than more revenue? Even free lobster tails and open bars at conferences hardly hold a candle to it and we’re always looking for ways to be more efficient. Here’s how you can measure and reduce your CPA with conversation intelligence.
What is CPA and How Do You Measure It?
Your CPA, or cost per customer acquisition, is how much you have to spend on marketing to get a customer. To find your CPA, you divide the cost of a campaign divided by the number of conversions, or people who have taken your desired action. For example, if you spend $1000 on a campaign and 100 customers took an action, your CPA is $10.00. That might be making an appointment, getting a quote, or making a purchase.
Of course, there are a lot of costs that you might account for when calculating your CPA, and the number you’re looking for depends on where you sit on the corporate ladder. It can include your media costs, labor, technology costs, and more. To keep things simple and because it’s how most marketers measure when they are talking about CPA, we’ll just focus on the paid media cost divided by conversions. But how do you know what your true CPA is?
Your CPA Measurement Might Be Inaccurate
You might be thinking “yeah, smartypants, I divided my spend by conversions, found out it was $290, and now I’ve gotta bunch of work to do!” Hold up a second, though. Are you actually counting all of the conversions that your digital marketing is driving? If your marketing is driving conversions over the phone, you need to accurately measure them, attribute them to your spending, and use the conversation data to optimize your digital media advertising.
Our research from over 500 marketers shows that they are overestimating their CPA by an average of 46% and that they can further improve their CPA by 17% by using conversation intelligence software like Invoca.
Try out our CPA Calculator to measure your true CPA and find out how much you can reduce your acquisition costs.
How to Reduce Your CPA with Conversation Intelligence
Okay, now that you’ve calculated your CPA and how much you can save, how does having conversation data from your sales calls help you reduce your CPA? Here are a few ways it’s accomplished:
Keyword bidding optimization
Whether you optimize your keyword bidding automatically with tools like Google Smart Bidding or you like to get your hands dirty and do it manually, you need conversion data to optimize it.
Of course, you can see what ad clicks result in conversions and you adjust bids accordingly or feed it to your smart bidding adjustment platform. But what if your ads are driving offline sales in the contact center? Many marketers don’t account for this at all and end up overestimating their CPA by a considerable amount. This means less money to spend on high-performing keywords.
Leading health insurance marketplace eHealth uses the Invoca conversation intelligence platform integrated with Google Smart Bidding to optimize its ad spend. This resulted in a 60% reduction in its click-to-call CPA and a 20% increase in conversions. Watch this video to learn more.
Reduce Wasted Ad Spend
Another common way that conversation intelligence can be used to reduce CPA is by reducing wasted ad spend. This is also frequently accomplished through keyword and paid media optimization using conversation intelligence data. Without full visibility into what campaigns are driving conversions on the phone, you might be assuming every click that results in a call is a conversion. But your paid search ads might actually be driving service calls or people asking for directions. Which is as good as setting that money on fire, because it’s not a sale! Watch this video to see how 1-800-GOT-JUNK? Increased bookings and more intelligently deployed marketing spend with the visibility it gained from using conversation intelligence.
Gain full visibility of the buying journey
Creating an efficient and effective marketing campaign requires full visibility into your customers’ buying journey. You need to know how they discovered you, how they interacted with you, and ultimately, how and through what channel they became a customer. If you’re missing what’s happening in your conversations with your customers, you don’t have a full-funnel view and you can’t fully understand your customers and optimize your media spend. Watch this video to learn how broadband provider Windstream Communications uses Invoca to reduce its CPA while exceeding subscriber goals by over 150%.
Precisely retarget and suppress ads
Particularly in the post-cookies age we live in where the use of third-party cookies for remarketing are being smashed by browser-level cookie-blocking, using every source of first-party data you have at hand for remarketing is critical. If your business gets a lot of sales inquiries from inbound phone calls, your remarketing picture gets even muddier.
A potential customer may have navigated to your website and clicked on a page or product before calling you and either asking a question or ultimately making a purchase. Either way, you are left with a data gap that leaves you open for making bad remarketing decisions that will annoy your customers and waste your marketing budget. You can bridge this data gap and get your hands on precise first-party data for remarketing by using a conversation intelligence platform like Invoca. When you know which customer converted on the phone, you can use that data to automatically suppress retargeting in real time or switch to nurturing retargeting to keep your brand top of mind and keep customers coming back. Check out this blog post to learn more about how it works.
Are you ready to reduce your CPA and get more money to spend on your best performing campaigns? Of course you are! Schedule a free demo today to learn more.