5 Proven Ways to Reduce Customer Acquisition Costs

Image showcasing a magnet to represent customer acquisition cost

Whether you are running a QSR, full-service, or fast casual restaurant, there is always one goal in mind – gain more customers for sustainable growth. When you are on the path to growth, a big chunk of your budget will go toward marketing and advertising to reach new diners/customers.

However, to know how effective your marketing campaigns are, you have to determine the customer acquisition costs.

When customer acquisition costs are high and customer lifetime value is low, it ultimately breaks down your bottom line. Therefore, it is vital to strike the right balance and keep your expenses in check.

This blog aims to help you make your marketing efforts count by sharing the proven tactics to reduce your CAC.

What Is Customer Acquisition Cost & How to Calculate It

Customer acquisition cost or CAC is the total amount you spend to acquire new customers.

It is one of the important business metrics that lets you know whether the total amount you spend on acquiring new customers outweighs the money you make.

In simple terms, customer acquisition cost is designed to measure and maintain the profitability of your business. Calculating your customer acquisition cost can be challenging, but there are online tools, such as the Restaurant Marketing Calculator, to help you calculate it properly.

How to Reduce Customer Acquisition Cost

Almost all businesses depend on customer acquisition. However, the cost associated with CAC can significantly impact your business profitability. As a result, business owners need to explore more ways to minimize the cost involved with acquiring customers.

Here are 5 proven ways that can help you to reduce customer acquisition costs.

1. Test Your Options

The first step towards reducing customer acquisition costs is to know which method works for you. The best way to find out is by testing your options. You need to find out which option appeals to your target audience and turns more customers in.

However, when testing marketing options, don’t try all the options at once. For instance, if you want to test Google Ads, Facebook (Meta) ads, or consider going with billboard advertising make sure to try one by one and then compare all the results with each other to know which method works.

This is one of the smartest moves to determine which channel gives you better results and will ultimately reduce your customer acquisition cost.  

2. Try Referral Programs

Did you know having a referral program can significantly reduce customer acquisition costs?  Having a robust referral program in place allows you to get warmer leads and helps you obtain prospects who are already familiar with your business. This minimizes the cost you spend on acquiring new customers.

To increase recurring sales, you can introduce a loyalty reward system that can help you create loyalty campaigns and entice your customers to come back for more.

3. Push Organic Social Media Growth

Organic social media growth is the key to reducing your customer acquisition cost. Businesses can leverage user-generated content (UGC), share and create valuable content that resonates with the audience, and easily convert viewers into customers. To achieve this, you need to align topics, channels, and formats with your target market.

Once you start increasing your organic followers, you’ll soon be able to convert them into a target audience. Remember to keep checking your organic social media growth by monitoring and analyzing which type of posts are working for you.  

4. Track Your New Customers

Keeping track of your new customers is essential to know the progress of your marketing. However, it can be difficult for you to know your new customers when using a paper-based order-taking system. Therefore, to make sure that you can easily track your new customers you need to adopt either of the two solutions given below.

  • Credit Card Tracking: A smart POS system integrated with credit card processing can help you make a database of your customers. You’ll easily track your new customers, as well as those who make repeat purchases.
  • Online Signups: By using a custom website and app you can easily know new signups. This can help you to get an estimate of the new customers that order from your restaurant. It’s a smart way to track your new customers and know exactly how many customers you gain.

5. Invest In SEO & Digital Marketing

To reduce your customer acquisition cost it is important to find new and cost-effective ways to acquire fresh customers. Digital marketing and SEO can help you reduce your costs. By simply claiming your page through Google My Business, and pushing for reviews, you can gain customers through Google. Meanwhile, by practicing SEO you can rank on certain keywords your customers are typing to search restaurants and grab more audience.

Make Informed Decisions by Using the Best CAC Practices

Your business is dependent on new customers. However, acquiring customers by spending more money without knowing where it’s going, won’t help you to drive business growth. By using the right tools and following the above strategy you can drastically decrease your customer acquisition cost.

FAQs

  1. What is a Good Customer Acquisition Cost?
There is no one-size-fits-all answer for good customer acquisition cost. It varies depending on the type of business you own. However, a general way to know whether your customer acquisition cost is good or not is to compare it with the Customer Value. Your CAC should be lower than your CV.  

  1. What is The Difference Between Cost Per Acquisition & Customer Acquisition Cost?
CPA or cost per acquisition is related to the campaign or channel metric that helps you to assess what it costs to generate contact with your target audience who are still not converted into your customers. Whereas customer acquisition cost is defined as the business-wide metric aimed to calculate your overall marketing spending on acquiring new customers.

  1. Why Is It Important to Calculate CAC?
Knowing how much you need to spend to bring in new customers will help you optimize your marketing strategy for the future. This metric is important for businesses to determine their current customer acquisition cost and predict future marketing budgets.

Newsroom

FAQ

Rest assured that our exceptional customer support is at your service round the clock, 24 hours a day, 7 days a week. We take great pride in providing you with unwavering assistance, ensuring that any issues or concerns you may encounter are swiftly and effectively addressed. Feel free to reach out to our dedicated support team whenever the need arises, as we are always here to provide you with prompt and reliable solutions.

Modisoft takes pride in providing a comprehensive suite of tools designed to facilitate seamless operations for your restaurant. With our powerful software, you can take advantage of a range of features tailored to enhance your efficiency and customer experience.

One of the standout features of Modisoft is the ability to view live sales data. This real-time visibility empowers you to monitor sales performance as it happens, allowing you to make informed decisions and swiftly address any issues that may arise.

Moreover, our software enables you to create customizable menus for ordering. You have the flexibility to design menus that align with your restaurant’s unique offerings, making it easier for customers to browse and select their desired items. This customization feature ensures a user-friendly ordering experience that caters to your specific requirements.

Additionally, Modisoft supports digital menu boards for pricing. By leveraging this functionality, you can easily update and display pricing information on digital screens within your restaurant. This dynamic approach eliminates the need for manual price changes and enhances the overall aesthetics of your establishment.

We’re pleased to announce that the cost to run the POS system aligns with the subscription for your back-office software. This streamlined approach simplifies your financial management, allowing you to enjoy a unified pricing structure that covers both the hardware and software components.

Maximize the potential of Cartzie Campaigns, our exceptional tool, by harnessing its features to create customer loyalty and drive repeat visits to your store. With Cartzie Campaigns, you can implement robust loyalty programs that incentivize customers to return, fostering a strong and lasting relationship with your brand.

Furthermore, take advantage of the automated customer outreach capabilities of Cartzie Campaigns through text messaging. This powerful feature allows you to engage with your customer base proactively, sending personalized messages, promotions, and updates directly to their mobile devices. By automating this process, you save time and effort while maintaining consistent and effective communication with your valued customers.

Additionally, our software empowers you to offer online ordering, opening up new avenues for sales and customer convenience.

By leveraging Cartzie Campaigns’ loyalty programs, automated customer outreach via text messaging, and online ordering capabilities, you can enhance customer engagement, increase sales, and deliver exceptional customer experiences. Embrace the full potential of these tools to grow your business and establish a strong presence in the digital realm.

About Altria

Altria Group, Inc. is one of the world’s largest producers and marketers of tobacco and related products. They have been the undisputed market leaders in the U.S. tobacco industry for decades.

Altria Group is known for owning the most enduring names in American business including but not limited to Philip Morris USA, John Middleton, and U.S. Smokeless Tobacco Company.

View Website

Benefits

  • Monitor and track all promotional efforts by directly integrating deals into insights
  • Receive Altria rebates smoothly by sharing scan data reports
  • Generate Altria scan data report program at a click

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds

About Cartzie

Cartzie is a loyalty application designed by Modisoft, with you in mind. It is a one-stop loyalty and online ordering solution that is fully equipped with all the tools needed to make your business grow.

With Cartzie, you can do curbside pickups, delivery, and drive-thru ordering. Cartzie has revolutionized the way businesses interact with customers.

View Website

Benefits

  • Add delivery options for your customers
  • Boost your marketing efforts through targeted campaigns
  • Take your business online in a few clicks
  • Receive payments online for your orders

Pricing

+$59 per month with Retail Plans

View Website

This will close in 0 seconds

About Comdata

COMDATA has been serving businesses for over 45 years and is recognized as a leading provider of commercial payment solutions. They specialize in serving the trucking industry and are known as an issuer of fleet fuel cards, trucking permits, corporate spend cards, and paperless payroll cards.

View Website

Benefits

  • Automatically transfer sales data from the Comdata POS into Modisoft back-office software
  • Get an all-in-one solution to monitor and track your sales separately
  • Easy accessibility to manage all your fuel sales

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds

About DoorDash

DoorDash, Inc. is a food ordering and delivery platform based in San Francisco. It is the largest food delivery company in the United States with more than 50% of the market share in the convenience delivery category. It provides an on-demand food delivery service to restaurants and stores. Their services help businesses innovate, grow, and reach more customers.

View Website

Benefits

  • Receive order directly into your POS System
  • Manage your online DoorDash menu
  • Enable DoorDash orders for your customers

Pricing

+$69 per month for Third-Party Order Management

View Website

This will close in 0 seconds

About Fintech

Fintech has been dedicated to serving the beverage alcohol industry for the last 30+ years. Established in 1991, Fintech operates from its headquarters based in Tampa, Florida. Supported by TA Associates and General Atlantic, Fintech automates alcohol invoice payment, streamlines payment collections, and facilitates comprehensive data capture for 1 million B2B business relationships.

View Website

Benefits

  • Import vendor invoices directly into your back office
  • Optimize purchase order management
  • Improve your alcohol vendor management

Pricing

+$5 per month

View Website

This will close in 0 seconds

About Gilbarco Veeder-Root

Gilbarco Inc. is a supplier of fueling equipment including fuel dispensers, payment systems, point-of-sales systems, and support services. The company operates from Greensboro, North Carolina.

View Website

Benefits

  • Effortlessly connect your POS data from the Gilbarco system to Modisoft Insights

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds

About Instacart

Instacart is a delivery company that operates a grocery delivery and pick-up service in Canada, and the United States. It is one of the largest grocery marketplaces in North America. Instacart makes the delivery process easy for store owners.

View Website

Benefits

  • Monitor and manage your Instacart inventory levels from Modisoft Insights
  • Updated Instacart inventory levels in real-time
  • Avoid stockouts by ensuring accurate inventory levels

Pricing

+$15 per month

View Website

This will close in 0 seconds

About Retalix

Retalix Ltd was established in 1982 and is now owned by NCR Corporations. It develops licensed and supported software applications for retailers, wholesalers, and distributors of fast-moving consumer goods.

View Website

Benefits

  • Easily Import sales data for reports and analytics from the Retalix POS system
  • Monitor sales in real-time

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds

About Paycue

Paycue is Modisoft’s preferred payment processing provider. It helps businesses to streamline their setup process to be faster and more efficient. Paycue assists businesses with faster payments and smoother customer interaction.

View Website

Benefits

  • Enjoy minimal fees on transactions
  • Seamless integration
  • Speedy transactions
  • Secure payments

Pricing

No monthly fee. Only pay when you sell.

View Website

This will close in 0 seconds

About Plaid

Plaid Inc. is a financial service company that builds a data transfer network that powers digital finance and fintech products. Plaid assists businesses in connecting their financial accounts to fintech services. The company's product enables applications to seamlessly connect with the user's bank account.

View Website

Benefits

  • Build a quick and secure connection to your bank account
  • Easily manage your bank reconciliation to match your book records
  • Experience an easier way to connect with your bank account

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds

About RJ Reynolds

R.J. Reynolds is a leading tobacco manufacturing company in the United States. Founded by R.J. Reynolds in 1875, the company is a subsidiary of Reynolds American. RJR holds the largest brand portfolio including but not limited to Kent, Pall Mall, Camel, and Newport. The company is based in Winston-Salem, North Carolina.

View Website

Benefits

  • Offer tobacco loyalty from the industry's leading brands
  • Monitor all promotional efforts in just a few clicks
  • Get your rebates easily

Pricing

Included in Advanced Plan

View Website

This will close in 0 seconds