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How to Fight Rising Customer Acquisition Costs in the Holiday Season with Messaging Audiences

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Fighting rising customer acquisition costs in the holiday season is possible. Find out how to do it with messaging audiences!

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With all the turmoil over the past few years, this holiday season is essential for businesses to get back on track. But Christmas is not only the most wonderful time of the year. It’s also the most expensive – both for customers and businesses.

Wait a minute, why are we talking about Christmas in June? While the holiday season seems far off in the distance, as a marketer, you know that it’s never too early to start thinking about how to make the most of your holiday campaigns. 

The problem is that considering constantly rising customer acquisition costs, maximizing revenue during the holiday season seems like a daunting task. 

So what can you do? 

Go where your customers are, but your competition isn’t.

Reap big first mover rewards by growing your audience on messaging channels like Facebook Messenger, WhatsApp and Instagram now. Then reach and convert those audiences directly on those channels for free come the holiday season.

That’s how you avoid all the high CPMs, CPCs, and CPAs of advertising on social in the busiest season of the year, when everyone’s competing for attention and bidding goes through the roof.

Want to know how your marketing team can have a big win to celebrate come Christmas?

Find out in this article. See how you can fight rising acquisition costs in the holiday season using your messaging audiences. 

Why Customer Acquisition Costs Are Painfully High and Rising

Digital advertising is becoming more and more challenging. The holidays are the icing on the cake for marketers already struggling to win more customers. Except that cake isn’t delicious. It’s expensive.

The sheer volume of digital ads today causes a shrinking attention span and ad fatigue. During the holiday season, it’s even harder to break through the noise with social feeds cluttered with Christmas ads. Search keyword bids skyrocket on Google. Let’s not even get started when it comes to display.

Customers get hundreds of newsletters in their email inboxes. The few emails that get through (hello auto inbox-sorting and spam prevention)  are getting lower click-through rates than ever.

All this results in higher customer acquisition costs (CAC). A demoralizing feeling that all the work you put into your holiday campaigns just isn’t paying off the way it used to. 

But the reason behind rising CAC is far more complicated than holiday peak periods. The turmoil over the past few years has created significant challenges for most industries.  

Manufacturing was shut down, leading to supply chain issues and product part shortages. Physical stores had to close their doors. Marketers had to reimagine their whole customer journey and shift to digital marketing. The strong shift towards online shopping has intensified the competition between eCommerce businesses, leading to more competition for eyeballs and higher customer acquisition costs.

As if that weren’t enough, constant privacy regulations completely changed the advertising landscape. With the rolling out of GDPR, CCPA, browser cookie updates, and Apple’s privacy updates, digital marketers lost the majority of user data almost overnight as users eagerly opted out of tracking. It has significantly damaged marketers’ abilities to create and target audiences with effective remarketing campaigns. 

What does it mean for marketers? You to pay more for worse results. CPCs are higher but conversion rates are getting lower due to inaccurate tracking. 

Other long-lasting impacts of COVID-19 continue to influence customer acquisition costs. As inflation is on the rise, consumers are cutting back on spending. Even with a higher income, price spikes in core spending categories including food, gas, and shelter are leading consumers to mind their spending closely. This highly affects D2C eCommerce businesses that sell leisure and luxury products that are not essential to everyday life. 

In a nutshell., The pandemic, competition, privacy regulations, and changing customer behaviors are disrupting the eCommerce landscape and driving up advertising costs in many sectors. With this in mind, it’s time to rethink your holiday marketing campaigns and start implementing a messaging strategy. 

Holiday season or not, higher customer acquisition costs are here to say. So, is there a way to strategically prepare for the holiday season and fight ever-increasing acquisition costs? 

The short answer is yes. By building and monetizing messaging audiences. 

Below, we’ll explain how you can get the most of your holiday season with one-to-one messaging before you join the rush to buy paid ads and send email blasts.

Why You Need to Build an Audience on Messaging Channels

Messaging channels offer marketing performance potential like email and search in 2005. Or Facebook before it became so easy to launch campaigns everyone and their grandmother started doing it.

Great marketing is about being able to reach the right audience, with the right message, at the right time.

Messaging gives you just that opportunity. Create a direct one to one connection with your customer. Find out what they want. Give it to them. Instantly. All in a seamless conversation.

The best part? You can re-engage them directly on that messaging channel. 

Repeat. You can re-engage them directly on that messaging channel.

Build the audience now. Then send a personalized push notification during the holidays with a special offer just for them.

Build hyper-specific segments of audiences you can continuously engage and monetize via messaging. 

You’re already paying for email subscribers by offering discounts. But messaging has 80% open rates and 35% CTR on average. It makes email look like a dinosaur. And not the cool kind of dinosaur kids want for Christmas. This is more like the type that gets you into hot water when you need to report on your campaign results after the holidays.

Why messaging? Because it’s customer-first and privacy-first. It creates fully automated, personalized one-to-one conversations with customers on the platforms where they already are. 

And most importantly, it’s the primary way customers want to talk to a business. In fact, 64% of customers prefer messaging over phone calls and emails.

We surveyed 1726 consumers about their experiences messaging with brands. Find out from our report why messaging is the number one new marketing channel.

Imagine a world where your marketing performance is not solely determined by your ad campaign results. 

You don’t talk at customers with passive ads. You talk with them in one-to-one conversations. 

You use a number of different online and offline entry points. Instead of just seeing your ads, customers can immediately start a private conversation with you from anywhere, enabling you to proactively support them in their purchasing decisions. Offer value immediately in an experience that makes them love your brand. At the same time, you’re building a directly reachable messaging audience that you can later monetize over and over again.   

How can you get there? 

First, use the right conversational commerce platform and set up your automated bot experience. 

Second, start talking to customers in one-to-one chat conversations and collect the declared data prospects shared directly with you to identify customer preferences.

Third, use those customer insights to build hyper-specific audiences you can regularly re-engage with tailored messaging. For example, send them personalized offers based on their preferences. Notify them about special discounts. Hype them up about upcoming shopping events and product announcements.

How to Fight Rising Customer Acquistion Costs With Messaging

Businesses that adopt messaging can race to the top. Even during the holiday season when customer acquisition costs are in the sky. 

Whether your aim is to acquire new customers or cross-sell and upsell during this holiday season, it’s essential to understand your audience: where do they spend their time and money? What topics are they interested in? What are their preferences in terms of your products and services? 

The declared data you collect via chat conversations will help you get a clear picture of customer preferences. You can use this to automate re-engagement on messaging channels that get serious results. You can even create custom audiences and lookalikes to set up more effective campaigns to target new customers.

Better Targeting in a Cookieless World

The shift towards a privacy-first world has come with a host of obstacles for digital advertisers. These updates make it more difficult to collect data. Understand users. Retarget and create custom audiences.

Privacy updates are one major reason why customer acquisition costs are rising. Marketers are kept in dark when it comes to tracking customers. Ad performance is going down. This will create a big challenge for advertisers in setting up this year’s holiday campaigns. 

But businesses can’t afford to lose data. As customers expect personalized experiences, relying on customer insights is now more important than ever. Given these changes, how can marketers better target their campaigns? 

Messaging is a creative way to capture customer insights at a time when data is becoming more and more protected. Chat conversations are a gold mine of declared data: this is the information customers share with the bots directly in the conversations. What’s even better is that since these conversations are one-to-one, customers are more comfortable sharing data with businesses.

Using customer insights from conversations, you can better target audiences when tracking becomes more and more challenging. 

For example, you can segment and retarget customers directly in Messenger or WhatsApp, using the data they share with you in a conversation. You can then automate personalized follow-up messages based on the insights. The result? 10x higher engagement than email. Try this during the holiday season and compare your results! 

Customer Acquisition via Online and Offline Entry Points

There’s no magic trick to beating rising customer acquisition costs. But messaging offers a number of organic entry points to acquire new customers and grow your audience – free of charge. 

Think twice before you send out another email blast in the holiday season when customers already receive way too many email promotions. But what if you could slide into their DMs on Messenger or Instagram instead? 

Entry points are various online and offline ways for customers to start a conversation with a business via messaging. Businesses can use these entry points to grow their audience on their messaging platforms by engaging them at different points in the customer journey.

Why is it crucial to actively grow your audience via entry points? Because entry points allow you to get more prospects into your messaging channels and nurture them at every stage of your funnel. And the more high intent audience members you have, the more valuable your audience will be. 

Entry points directing prospects into messaging channels, like Facebook Messenger, WhatsApp Business, and Instagram Messaging, can be embedded into any URL on your website, social media page, or newsletter. A “send message” button can be easily inserted into social media posts, and Instagram stories, or you can even trigger a chat conversation as prospects comment on a post. With QR codes, entry points can be also placed on offline advertisements, such as packaging or outdoor ads. And the list goes on. Read our detailed article on entry points for further insights.

Re-engagement via Recurring Notifications

Once you have built your audience, it’s time to start nurturing them to build better customer relationships. The best way to nurture people to become customers is by getting to know them and targeting them with topics that interest them. This is exactly what you can do with recurring notifications, a new Messenger and Instagram platform feature, released by Meta. 

Recurring Notifications allows businesses to send multiple messages after the 24 hour window, including promotional messages, in Messenger and Instagram, to a customer who has opted-in to receive them. This makes it easy for people to keep in touch with a business over a period of time and allows businesses to nurture customer relationships that increase sales. 

According to Meta’s internal data, recurring notifications gets 50%* average opt-in rates to accelerate buying journeys and drive full funnel results. 

Using the feature, you can turn customers into frequent buyers by offering them to opt in for promotional updates, new product announcements, appointment reminders, special discounts, loyalty program updates, and so on.

This feature is especially valuable during the holiday season when customers are growing immune to digital advertising. 

Why? Because by the time the holiday season is here, you can already benefit from an engaged audience. But instead of spamming them with irrelevant offers, you can reach them directly with personalized offers using push notifications that convert. All for free.

Remember how great marketing is about reaching the right person, with the right message, at the right time? 

Well, now you can. Check out all the possible use cases for recurring notifications! 

Wow! If you're still with us, you must be serious about maximizing your holiday campaigns. This ultimate playbook will help you get started with recurring notifications.

Take Away

COVID-19 has significantly changed the way we shop. During the quarantine, brands closed their physical stores and shifted to online advertising. As competition and the number of ads increase online, people have stopped paying attention to the many advertisements popping up into their faces. 

Due to constant privacy updates, marketers face a major challenge in tracking and reaching their audience with relevant ads. All of these factors have contributed to rising acquisition costs. 

With all the turmoils of the past few years, getting the most value of this holiday season is essential for any business. While there’s no single solution to rising CACs, it’s possible to mitigate the impact and get serious results this holiday season. 

Messaging enables businesses to stand out from the crowd of advertising. It offers private, one-to-one conversations on the channels where customers already are. If you start building a messaging audience now, you’ll be able to strategically monetize it during the holidays instead of spending a fortune on online ads. 

How can you do that? 

  1. You can use the customer insights for one to one retargeting on messaging channels when tracking is becoming more and more challenging. 
  2. You can use multiple entry points to grow your audience quickly and efficiently.
  3. Once you have built your audience, you can start nurturing them with recurring notifications. Learn more about them and build a close relationship with them by offering value.
  4. When the holiday season is here, you can benefit from an engaged audience. But instead of spamming them with irrelevant offers, you can slide into their DMs with messaging tailored to their needs.

Book a demo with one of our conversational marketing experts to learn how Spectrm’s conversational commerce platform can help you grow your business at scale! 

Want to stay updated on the state of social conversational commerce? Find out more about current messaging habits on social and preferences for the future.

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