Customer Acquisition Cost Part II: Converting Leads Into Customers

By Matty Sayer
Director of Growth Marketing
Jun 14 2023 read

Knowledge Exchange is a weekly series of educational articles that we encourage you to share and discuss with your colleagues and network. This month, we’re offering advice for successfully marketing your services.

In Part I, we defined customer acquisition cost (CAC) and presented solutions for common struggles related to bringing in new leads.

Here, we’ll dive into everything you need to know about the second category of customer acquisition costs: the ones related to converting those leads into customers.

What Counts as a Conversion Cost? 

In the middle and bottom of the funnel, all of the time and money it takes to nurture and work a lead all the way through to the moment they sign a contract should be included in your CAC calculation.

These might include costs and expenses for analytics or retargeting software, landing page design, long-form content creation, sales enablement content creation and a percentage of rent and utilities used by a sales team.

Strategies for Lowering Conversion Costs

Once you add these costs to your lead acquisition costs, you might be overwhelmed by the number you’ve determined for your CAC. Let’s look at four challenges you could face in this potentially expensive conversion stage and how to overcome each.

CHALLENGE #1: You aren’t sure whether your touchpoints are all helpful or necessary.

SOLUTION: Regardless of what kind of services you provide, there is no single linear pathway for converting leads. A prospect could become aware of you through one of your paid advertisements, a piece of content, a post on social media, a referral from another business or friend, etc. Because of this endless list, there could be plenty of distinct reasons they decide to convert or inquire about your services — and plenty of avenues for overspending. 

The more touchpoints you have as part of an integrated marketing strategy, the better your brand awareness will be and the lower your CAC will be. Demand creation and demand capture marketing strategies are common business practices for developing these touchpoints. 

➡️ To create demand, your team must raise awareness about the problem you solve or the challenges your ideal customers are facing, then provide unbiased and trustworthy information to educate them on the possible solutions. The idea is to be the first brand a prospective customer thinks about when they discover they’re facing this problem or having a similar challenge. 

➡️ To capture demand, your team must understand the various channels your ideal customers use when they’re in the market and actively searching for a solution. It’s your job to capture this demand through a strong brand presence and provide a simple pathway for conversion.

Your entire buyer journey should be driven by messaging that makes it easy for your prospects to find what they’re looking for and continue seeking a solution with your business as the guide.


Bodie Czeladka, Creative Director at Dilate Digital, explains the importance of brand: 

“Let's not forget the power of a solid brand in all this! A strong brand identity can help businesses to not only stand out in the crowd but also build lasting relationships with clients new and existing, ensuring a steady flow of leads/referrals despite the challenges and any rising costs in the advertising market. Most importantly, do what you say you do on the box. Good marketing makes a bad product worse and a great product better. Deliver on the promises you make, and be conservative when making promises.” 


CHALLENGE #2: You don’t have a clear funnel for leads to move from marketing to sales.

SOLUTION: The lead handover process from marketing to sales can be as simple or detailed as you’d like. For example, you can choose to reach out to every lead that engages with a marketing campaign or only those who have shown high interest. You can determine that interest using a lead scoring model — also called a lead temperature model, which helps both teams prioritize the leads that are ready for a conversation with a salesperson.

If you’re running paid advertising campaigns, interest triggers might include:

  • Impressions
  • Clickthroughs
  • Conversions

Engagement is generally measured by:

  • Email opens and clickthroughs
  • Bounce rate or time on a landing page
  • Video views or visits to a high-intent page 

You can consolidate costs and capture all of this information in an analytics and marketing automation platform such as HubSpot, then push it seamlessly into your CRM to notify a salesperson that the lead has been prioritized and is ready for outreach. Using Accelo, you can achieve this automatically using workflows, rules and email activity triggers. 

TIP: If you opt for automation, don’t forget to consider the perception of your lead. Make the experience feel human!

CHALLENGE #3: Your sales cycle is too long.

SOLUTION: There are a few common factors that contribute to an extended sales cycle in professional services:

  1. Complicated service offerings that require intricate detail and strict due diligence
  2. An overwhelming volume of prospective customers reaching out
  3. Lack of time to respond to new leads

This is where structured processes can come in handy, like those you can build out in sales automation software. It may take some time and brainpower to determine the most appropriate setup, and your systems will need to be optimized and adjusted, but the potential time and cost savings are tremendous. The more your team can rely on automation, the less need there will be for manual intervention and management, which is a costly element of CAC.

CHALLENGE #4: Your prospects drop off at the very end of the cycle.

SOLUTION: A prospective customer can disappear due to changing priorities, budget cuts, a lack of price and value alignment or a more compelling offer. Or, they may simply have decided they weren’t yet ready for your services.

To avoid getting to this stage, it’s critical to provide upfront value. You should clearly articulate and demonstrate the prospect’s current state and paint a picture of the future state you can help them achieve. Show the tangible value you provide and what they’re missing out on by sticking with the status quo or selecting an alternative.

Furthermore, if you tailor your onboarding to their specific wants and needs, you’ll make it so simple to get started with your business that it’ll be a no-brainer to sign a contract.

TIP: It’s always a good idea to get back in contact with a lost lead. This is not only so you can keep a record but so you can improve your service offering or sales processes and reduce the likelihood of other prospects dropping off in the future. You may uncover a misunderstanding or miscommunication and get a chance to restart the conversation, or you could find that they were in fact interested, but the timing was off, and you’ll be able to try again soon.

Reduce Both Acquisition and Conversion Costs With Accelo

Conversion is a key component of the big picture of acquisition. One Accelo user and agency leader describes how all of this advice comes together:

To maintain or grow a steady stream of leads amidst rising challenges and costs, it's crucial to strategically combine creativity, adaptability and data-driven decision-making. By adopting new platforms, refining your approach to algorithm updates and prioritizing authentic connections with your target audience, you can overcome obstacles and grow in a competitive market. The key to successful customer acquisition is to evolve with the times while remaining true to your core values and mission.

Colby Ray, Director of Digital Operations, Hyport Digital

Now that you understand the full picture of CAC, it’s time to take action to lower yours. Accelo is with you every step of the way. Our Expert Services team can help you optimize your usage of the platform to support more cost-effective marketing efforts.

Think your colleagues would find this article valuable? Head over to LinkedIn to share and discuss.

Not yet an Accelo user? Dive into the cost-saving potential with a free trial or demo.


About the Author


Matty Sayer is Director of Growth Marketing at Accelo, where he strategically manages demand generation, lead acquisition, conversion optimization and pipeline performance. With a decade of marketing experience in tertiary education, government agencies and technology startups and scaleups, Matty aims to provide prospects and clients with an exceptional experience at every touchpoint.

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