Content Customer Acquisition Costs Too High?
Here’s How We Build Content Strategies to Reduce CAC
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It happens to all of us.
Content marketing was the hot new thing. You could write an article, promote it on social, build a few links, and voila! Instant traffic and customers.
Now, content marketing ROI is decaying.
Brian Balfour, CEO of Reforge, asked Patrick Campbell of ProfitWell about the state of content marketing ROI. They discovered while customer acquisition costs (CAC) for content marketing is less than CAC for paid channels, the gap is closing rapidly.
How can a savvy cofounder like you effectively improve your content marketing ROI by reducing your content marketing CAC?
One we do this at Growth Ramp is to build a look-a-like audience for content marketing. Here’s what we’re going to cover in this article:
Over 3 million posts and pages are written every day on Wordpress. And the average length of an article is 41.3% longer today than it was three years ago.
This should not be a surprise to anyone who studies the history of marketing.
As Andrew Chen, general partner at Andreessen Horowitz observed, every marketing channel becomes less effective over time. So it's not surprising that the CAC for content marketing has been increasing too.
Before I share some of our trade secrets, let’s make sure you have an idea of what your content marketing ROI and CAC is, so you know if it improves.
Raise your hand if you ever made a New Year’s Resolution you did not keep.
One reason you and I have a tough time staying focused, whether for business or pleasure, is because we don’t see progress. And if you don’t know your numbers, it’s hard to know if the time is worth the effort. As business managing consultant Peter Drucker once said, if you can’t measure it, you can’t improve it.
Here’s a simple formula:
CAC = Total Marketing Expenses + Sales Expenses / # of New Customers Acquired.
To be more precise, you will want to calculate these expenses related only to content marketing.
This includes:
Some of these resources may be used for other parts of your business too. The developer may spend 10% on SEO, and 90% building your tool. Don’t get hung up on the exact amount. Instead, estimate a percent, and move on.
There are more complex numbers and formulas you can use. For example, you can calculate your sales lead time, new customers vs returning customers, and freemium SaaS costs. This can help give you more precise numbers.
If you don’t know how to do this, keep to the simple formula given above. While these numbers will never be exact, the goal is to get a better idea of what’s happening in your business.
Need a more precise model? Read Brian Balfour’s article, “How To (Actually) Calculate CAC.” It’s very SaaS-focused, but it can apply to any business.
Now you know what your CAC is for your blog. How can you decrease your cost to acquire a customer?
One way is by creating a content strategy using a look-a-like audience.
Look-a-like audiences are all the rage among Facebook advertisers to decrease CAC, while increasing their return on ad spend (ROAS).
And it makes sense. One of the most likely sources of new customers is to find those who are similar to your existing customers. Here are some stats to prove this:
Money in da’ bank.
On Facebook, creating a look-a-like audience is as simple as clicking a few buttons.
Just add water and you get an instant audience.
Unfortunately, it’s not that easy for content marketers. But, by surveying your existing customers, you can ask them the right questions to get the exact same data.
There are other benefits in reaching out to your customers.
When I did this for Polymail, I was able to:
There were a few customer complaints and cancellations. This was easily less than half-a-percent (0.5%) of all customers. Overall, this small cost was worth the added benefit.
First, I came across six major content topics Polymail customers wanted to learn more about.
Brandon Foo, one of Polymail’s co-founder, suggested I should blog about business productivity, email outreach, sales, business development, and customer success.
After getting customer feedback, I learned I should also blog about creating procedures, business automation, how to hire and outsource work, prioritizing a schedule, and managing a team. Additionally, I have over 100 article ideas to write about.
Second, I became more aware of the customers I’m serving.
For example, Polymail’s customers have a wide range of job roles, such as marketing, sales, developers, and designers. Two jobs Foo suggested are a very small section of their clients.
More importantly, I found out many manage large teams, have more than one job, and have multiple roles. Using Polymail helps them manage their email inbox(es) more efficiently.
Finally, I have better insights into each type of buyer, and the challenges they face in their job.
One customer type Polymail serves are engineers who are 35-44, male, and either own their own company or are an executive, or manager who leads a team of developers.
Some of their challenges include needing to set aside time to work on the business and not in the business, not building custom software solutions that then go neglected, and how to hire and outsource work. Of Polymail’s competitors, they are most likely to use Spark, Outlook, or Airmail.
From that information, I could write articles about:
See how much more helpful it is to write content to solve your customers' specific problems?
What’s the simplest way to learn how to better serve your customers with content?
It’s not by doing a keyword gap analysis. It’s not by doing keyword research on what terms you think you can rank for. And it’s not by doing a competitor content analysis.
It’s by doing one simple thing - talking to your customers.
We like to do this through a survey using email outreach.
My recommendation is to aim for at least 200 responses. Surveys with less than 200 responses are better than no data at all. This is better than most content strategies we’ve seen which do not listen to their customers at all. However, your data will more likely be skewed by outliers.
To get to 200 responses, with a 20% reply rate and 50% survey fill-out rate, you will need 2,000 customer emails (in other words, 200 responses / 20% reply rate * 50% = 2,000 emails). Getting a 20% reply rate is tough for some marketers.
Here’s a guide on email outreach. It will share how we get response rates of 20-40%. Also, keep in mind that not everyone who will reply to your email will fill out the survey. You may want to double the customer emails to get 200 responses.
Your reply rate will also change based on how great your tool is, and how loyal your customers are to your business. Polymail had a high reply rate of 40% with their customers.
What should you do if you don’t have enough customer emails?
Do you collect emails from free trial customers? Or do you have emails you collect from your blog?
My recommendation is to do outreach on these two lists too. It’s not as ideal as surveying your customers. Some of those on these lists are tire kickers who won’t pay a penny. But some will become customers.
If you don’t have enough emails on your newsletter, I’d recommend talking on the phone with your customers (which is a topic for another article). Talking to customers will give you more quantity and quality information.
This happens because you can ask follow-up questions, which is harder to do with surveys. Also, as an added bonus, you will build a deeper relationship with your customers.
Do you have a customer list of 5,000 or more?
I would recommend segmenting your customers by those that have a higher than average lifetime value (LTV). This could be as simple as segmenting customers on your enterprise plan. By using an email segment, you will get more precise data to find customers like them.
With your email list in-hand, you can set up a survey to help you create your own look-a-like audience.
If you ask your customers the right questions, from my experience, they will tell you 80% of what you need to learn to serve them better. How do you do this?
Start by asking yourself this simple question: What do you want to learn about your audience?
Want to learn where you should guest post? Then ask your customers, “What blogs and publications do you read?”
Here are 10 questions you can ask to create a better content strategy:
This question is great for content topics, and learning about new products you can sell.
This question will help you create a data-driven buyer persona.
This question gives you an idea of who to partner with, and perhaps new guest blogs to write on too.
This question gives helps you to segment who buys what products from you.
This question can help you discover other buyer personas you have not considered in the past.
This question helps you know who are your direct competitors.
This question gives you data on how you should be positioning your business.
This question will help you know what channels to promote your content in.
This question can improve the user experience, or overall content strategy.
This question will help you know what you should continue to focus on.
Keep in mind how many questions you ask your audience. The more questions you ask, the more likely your customer will not complete the survey because it takes up too much time.
Alright, it’s almost time to reach out to your customers. But first, you will want to create an email sequence to maximize your responses.
I want to tread lightly with the advice I give you here.
On one hand, just because you or I hit “delete,” on someone’s cold email, doesn’t mean the campaign was unsuccessful. On the other hand, like many fields, there’s a lot of bad advice on the web.
Templates are given without context on why they work. Not to mention, many content writers try to rank for keywords their boss or client gave them. More often than not, they lack actual hands-on experience.
Here’s how we build our email outreach sequence templates. If you want a quick summary, here are the five principles we use to create an effective outreach sequence:
1. Treat the other person with respect, like a friend.
It sounds simple. But it’s often easier to whip up a campaign and hit send without putting yourself in your customers' shoes.
Treating people with respect also means keeping your email short too. Yes, long emails can work. But it’s usually safer to keep it short and to the point. I like to keep my messages to 100 words or less.
I also like to ask for permission before dropping a link to the survey. Permission marketing is one of the most effective ways to turn strangers into friends. If they ask to be removed from your campaign, do so and apologize. And please don’t treat your customers as just a means to advance your goal.
2. Master the subject line.
Every element of an email has one goal. For the subject line, that goal is to get the reader to open the email without burning their trust. I rarely start my subject line with “Re:”. And I never do that for a cold email. Why? Because “Re:” implies it is a response to something mentioned before.
Typically, my subject lines are two to four words.
3. Craft a compelling message.
If the goal of the subject line is to get your reader to open the email, then the goal of the message is to get a reply. Place yourself in your reader’s shoes. What’s in it for them to reply back? Once you answer this question, make a clear ask around this proposition.
4. Personalize your emails.
Personalization goes beyond starting your email with “Hey {{first}},”. Consider your audience, the context of your message, and the message itself.
Whatever you do, I recommend you take the time to make sure the personalization feels natural, such as using proper capitalization for their name.
5. The follow-up, for the win.
Marketers are hesitant to follow up because they think they will annoy the recipient. Savvy salesmen seem to stop for nothing to get a sale. What’s the right number of times to send a follow-up message?
It depends.
Typically the more value I offer, the more emails I will send. I send three emails to customers to build a content strategy.
After you have sent out all your emails, now begins the fun part of building your SEO conversion-driven content strategy.
You’ve almost made it! Now comes the fun part of building your content strategy to increase profit and reduce CAC.
The goal is to use this data to better serve your customers, and to find new customers like them. If you summarize the data, it will be easier to take action on it. Start by creating data-driven buyer personas. You should have enough information to avoid those fluffy, “Marketing Mary, who has two-and-a-half kids and drives a Subaru in the summer” type of personas.
As you flesh out who your customers are, and how best to serve them, I would also categorize each question into a separate point in your strategy document.
For example, when creating “Realtor Rihanna,” you will list out all the blogs she actively reads, such as Inman, Redfin, and Zillow. However, maybe “Cashflow Carl” prefers to read Cash Flow Diary, Robert Kiyosaki, and 1-2-3 Flip.
In a separate section, list out all of these blogs, ranking them in order of frequency from your survey. This will allow you to quickly zoom-in and zoom-out on your content strategy.
Finally, you will want to create an editorial calendar, keyword research, and content promotion plan. An editorial calendar will help keep you on a regular content schedule. My recommendation is to include the following information:
Your keyword research will help you get ongoing organic traffic from Google. For each question, I Google the question and find the top ranking articles. Then, I use a keyword research tool like ahrefs to find out what keywords drive traffic to that article.
This approach to content strategy puts your customer needs first, then SEO. Finally, you will want to craft your content promotion plan.
Most of your approach to content promotion will be based on the survey data. However, I recommend thinking about your approach to getting traffic from three sides:
If you can't persuade your peers and your boss, then your project is never going to have a chance. I've learned this the hard way. So let me answer a common question: Will this content strategy work in my industry?
What I’ve shared with you relates to a principle of marketing - people love to be part of a community. And people tend to be helpful.
When you find out who is in your tribe, the problems they want you to solve, and where they spend time online, you will learn how to better serve your customers. These principles hold true of your customers, whether you are in the fin-tech, fitness, or the food industry.
If you'd like us to help you to create a look-a-like audience for content, you can learn more about our services here.
How will you know this approach worked?
A simple answer is to calculate your content marketing CAC in six months. Did it go up or down?
Your mileage may vary. But if you deliver a remarkable experience through your content, it’s only a matter of time before you turn strangers into friends, and friends into customers.
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