#Tips for Reducing Customer Acquisition Costs (CAC)

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Tips & Tricks to achieve Better Returns

Achieving better returns on marketing investments is a top priority for businesses. By implementing effective strategies and optimizing your efforts, you can maximize your return on investment (ROI) and drive growth.

Tips for Achieving Better Returns

Set Clear Goals:

Define specific, measurable, achievable, relevant, and time-bound (SMART) goals for your marketing campaigns. Clear goals provide direction and help measure success.

Understand Your Audience:

Conduct thorough market research to understand your target audience's needs, preferences, and behaviors. Tailor your marketing messages and offers to resonate with them.

Leverage Multi-Channel Marketing:

Use a mix of online and offline channels to reach your audience. A multi-channel approach ensures that you engage customers at different touchpoints, increasing the likelihood of conversions.

Optimize Your Budget:

Allocate your marketing budget wisely by focusing on high-performing channels and tactics. Regularly review and adjust your budget based on campaign performance.

Test and Refine Your Strategies:

Continuously test different marketing approaches, such as A/B testing for ads, email campaigns, or landing pages. Use the results to refine your strategies and improve ROI.

Monitor Key Metrics:

Track important metrics like conversion rates, customer acquisition cost (CAC), and lifetime value (LTV) to evaluate the effectiveness of your marketing efforts.

Tricks for Boosting ROI

Automate Where Possible:

Use marketing automation tools to streamline repetitive tasks, such as email marketing, social media posting, and lead nurturing. Automation saves time and ensures consistency.

Focus on Retention:

Acquiring new customers is more expensive than retaining existing ones. Invest in customer retention strategies, such as loyalty programs, personalized offers, and excellent customer service.

Utilize Data Analytics:

Analyze customer data to identify patterns, trends, and opportunities for improvement. Data-driven insights help optimize your marketing strategies and increase ROI.

Collaborate with Influencers:

Partner with influencers who align with your brand to expand your reach and credibility. Influencer marketing can drive higher engagement and conversions.

Create High-Quality Content:

Invest in creating valuable, relevant, and engaging content that resonates with your audience. High-quality content can attract more traffic, generate leads, and improve brand reputation.

By implementing these tips and tricks, businesses can optimize their marketing strategies, reduce costs, and achieve better returns on their investments.

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Optimizing B2B Customer Acquisition Costs: Tips for Marketers

In the competitive world of B2B marketing, optimizing customer acquisition costs (CAC) is crucial for sustainable growth. As businesses strive to attract and retain clients, managing these expenses effectively can significantly impact profitability. In this blog post, we explore various strategies and tips to help marketers optimize their CAC. From leveraging growth marketing tactics to understanding the key metrics, we cover everything you need to know.

Understanding Customer Acquisition Costs

Customer Acquisition Costs (CAC) refer to the total expenses incurred in acquiring a new customer. This includes costs associated with marketing, sales, and any other resources used to attract and convert prospects. Understanding CAC is essential for evaluating the efficiency of your marketing efforts.

Get full insights@ https://itechseries.com/blog/optimizing-b2b-customer-acquisition-costs-tips-for-marketers/

Why Customer Acquisition Costs Matters for B2B

Optimizing CAC is vital because it directly impacts your return on investment (ROI). High acquisition costs can eat into your profits, while optimized CAC allows for better allocation of resources, ultimately leading to sustainable growth. By keeping CAC in check, businesses can ensure a healthy bottom line.

Setting Clear Objectives

Aligning Goals with CAC: To optimize customer acquisition costs, it's important to set clear marketing objectives. These goals should align with your overall business strategy and focus on both short-term and long-term outcomes. Clear objectives help in creating a roadmap for efficient customer acquisition.

Measuring Success: Once you have set your goals, establish key performance indicators (KPIs) to measure success. KPIs might include metrics like cost per lead (CPL), conversion rates, and customer lifetime value (CLV). Regularly tracking these metrics will provide insights into the effectiveness of your acquisition strategies.

Targeting the Right Audience

Identifying Your Ideal Customer: Targeting the right audience is a fundamental aspect of optimizing CAC. Start by identifying your ideal customer profile (ICP). Understand their pain points, needs, and preferences. This knowledge will enable you to tailor your marketing messages and campaigns to attract the right prospects.

Utilizing Segmentation: Segmentation allows you to divide your audience into smaller, more manageable groups based on specific criteria. By targeting these segments with personalized marketing efforts, you can improve engagement and conversion rates, ultimately reducing CAC. Segmentation strategies might include demographic, geographic, and behavioral factors.

Leveraging Growth Marketing Strategies

Embracing a Holistic Approach: Growth marketing involves using a variety of tactics to drive customer acquisition and retention. Unlike traditional marketing, growth marketing focuses on the entire customer journey. By adopting a holistic approach, you can identify opportunities to optimize each stage of the funnel, from awareness to conversion.

Experimentation and Testing: Growth marketing thrives on experimentation. Continuously test different strategies, channels, and messaging to see what resonates best with your audience. A/B testing, for example, can provide valuable insights into which elements of your campaigns are most effective, allowing you to optimize for lower CAC.

Enhancing Content Marketing

Creating Valuable Content: Content marketing is a powerful tool for attracting and engaging potential customers. By creating high-quality, valuable content that addresses the needs and challenges of your target audience, you can build trust and authority in your industry. This, in turn, helps in reducing CAC by attracting organic traffic and qualified leads.

Distributing Strategically: Simply creating great content isn’t enough; you also need to ensure it reaches the right audience. Distribute your content through multiple channels, including your website, social media, email newsletters, and industry forums. Effective distribution maximizes the reach and impact of your content marketing efforts.

Get the technology trends and insights on GTM Library@ https://itechseries.com/gtm-library/

Utilizing Marketing Automation

Streamlining Processes: Marketing automation tools can significantly reduce customer acquisition costs by streamlining repetitive tasks. Automated email campaigns, social media scheduling, and lead nurturing processes free up valuable time for your marketing team to focus on strategic initiatives.

Personalizing Customer Interactions: Automation also enables personalized marketing at scale. By using data to tailor messages and offers to individual prospects, you can improve engagement and conversion rates. Personalized marketing not only enhances the customer experience but also contributes to more efficient acquisition efforts.

Optimizing Paid Advertising

Choosing the Right Platforms: Paid advertising can be an effective way to acquire new customers, but it’s important to choose the right platforms. Consider where your target audience spends their time and allocate your budget accordingly. Popular platforms for B2B marketing include LinkedIn, Google Ads, and industry-specific sites.

Monitoring and Adjusting: Regularly monitor the performance of your paid campaigns and make adjustments as needed. Track metrics such as click-through rates (CTR), conversion rates, and cost per acquisition (CPA). By optimizing your ad spend and targeting, you can reduce CAC and improve ROI.

Building Strong Partnerships

Collaborating with Industry Influencers: Partnering with industry influencers can amplify your reach and credibility. Influencers already have the trust of your target audience, and their endorsement can drive significant traffic and leads. Collaborate on content, events, and promotions to leverage their influence and reduce acquisition costs.

Creating Referral Programs: Referral programs incentivize your existing customers to refer new clients. By offering rewards for successful referrals, you can tap into your customer base to generate qualified leads at a lower cost. Referral programs not only reduce CAC but also foster customer loyalty and advocacy.

Analyzing and Iterating

Continuous Improvement: Optimizing customer acquisition costs is an ongoing process. Regularly analyze your marketing performance to identify areas for improvement. Use analytics tools to gain insights into what’s working and what’s not, and iterate on your strategies accordingly.

Staying Agile: The digital marketing landscape is constantly evolving, and so should your strategies. Stay agile by keeping up with industry trends and being open to new ideas and technologies. Agility allows you to adapt quickly to changes and continuously optimize your CAC.

In conclusion, optimizing B2B customer acquisition costs requires a strategic, data-driven approach. By understanding you’re CAC, setting clear objectives, targeting the right audience, leveraging growth marketing tactics, and continuously analyzing and iterating your efforts, you can achieve more efficient customer acquisition and drive sustainable growth. Implement these tips and watch your marketing efforts yield better results with lower costs.

Gain compelling B2B marketing insights, trends, and strategies for building an efficient customer acquisition strategy. Reach out and chart your path to B2B success with effective lead generation.

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Navigating the Numbers: A Guide to Startup Accounting

In the dynamic world of startups, where innovation and growth are the watchwords of the day, accounting might seem like a dull back-office task. However, mastering startup accounting is crucial for ensuring the financial health and sustainability of your venture. Whether you're a budding entrepreneur or a seasoned startup founder, understanding the fundamentals of accounting can make or break your business. In this article, we'll delve into the essential aspects of startup accounting and provide practical tips to help you navigate the numbers.

Why Startup Accounting Matters

Accounting serves as the backbone of every successful business, regardless of its size or industry. For startups, in particular, effective accounting practices are essential for several reasons:

Financial Management: Proper accounting enables startups to track their income, expenses, and overall financial performance accurately. This, in turn, facilitates informed decision-making and resource allocation.

Compliance: Startups are subject to various legal and regulatory requirements, including tax obligations and financial reporting standards. Adhering to these regulations is crucial for avoiding penalties and maintaining the trust of investors and stakeholders.

Investor Confidence: Investors, whether they're angel investors, venture capitalists, or crowdfunding backers, scrutinize a startup's financial records before committing funds. Transparent and well-maintained accounting instills confidence in investors and enhances the credibility of the startup.

Business Valuation: As startups grow and seek funding or potential acquisition, accurate financial statements become vital for determining the company's valuation. Sound accounting practices can significantly impact the perceived value of the business.

Key Principles of Startup Accounting

Now that we understand why startup accounting is indispensable, let's explore some fundamental principles:

Separate Business and Personal Finances: As a startup founder, it's crucial to maintain distinct bank accounts and financial records for your business and personal expenses. Mixing personal and business finances not only complicates accounting but also poses legal and tax risks.

Accrual Accounting vs. Cash Accounting: While cash accounting records transactions when cash actually changes hands, accrual accounting recognizes revenue and expenses when they're incurred, regardless of cash flow. Most startups opt for accrual accounting as it provides a more accurate picture of their financial health, especially when dealing with long-term contracts or subscription-based revenue.

Track Key Metrics: In addition to traditional financial statements like the income statement and balance sheet, startups should monitor key performance indicators (KPIs) relevant to their industry and business model. These may include customer acquisition cost (CAC), lifetime value (LTV) of a customer, burn rate, and runway.

Implement Robust Financial Systems: Leveraging accounting software such as QuickBooks, Xero, or FreshBooks streamlines the accounting process, minimizes errors, and provides real-time insights into your startup's finances. Furthermore, integrating these systems with other business tools enhances efficiency and data accuracy.

Tips for Effective Startup Accounting

Here are some practical tips to optimize your startup's accounting practices:

Hire or Outsource to Experts: While startups often operate with lean teams, investing in professional accountants or outsourcing accounting tasks to reputable firms can save time, reduce errors, and ensure compliance with tax regulations.

Maintain Detailed Records: Keep meticulous records of all financial transactions, including invoices, receipts, bank statements, and contracts. This not only simplifies tax preparation but also facilitates audits and due diligence processes.

Plan for Taxes and Cash Flow: Anticipate tax liabilities and cash flow fluctuations by creating realistic budgets and financial forecasts. Set aside funds for taxes, employee salaries, and other recurring expenses to avoid cash crunches.

Regularly Review Financial Reports: Schedule regular reviews of your financial statements and KPIs to identify trends, spot potential issues, and make informed decisions about resource allocation and growth strategies.

Stay Educated and Adapt: The world of accounting is constantly evolving, with new regulations and technologies shaping the landscape. Stay informed about industry trends, attend workshops or webinars, and be willing to adapt your accounting practices accordingly.

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Unlocking Startup Success: Understanding Investor-Focused Metrics

The Importance of Investor-Focused Metrics

Investor-focused metrics are key performance indicators (KPIs) that investors use to evaluate the potential of a startup. By focusing on these metrics, you can not only secure funding but also optimize your business for long-term growth. Let's delve into some of the most important investor-focused metrics:

1. Monthly Recurring Revenue (MRR)

MRR is a vital metric that investors often consider. It represents the predictable and consistent revenue generated from subscription-based products or services. Investors prefer startups with a healthy MRR because it demonstrates a steady income stream.

2. Customer Acquisition Cost (CAC)

CAC measures the cost of acquiring a new customer. Investors want to see a low CAC, indicating an efficient customer acquisition strategy. Lower CAC means you can grow your customer base while spending less on marketing and sales efforts.

3. Customer Lifetime Value (CLV)

CLV represents the total revenue a customer is expected to generate over their lifetime as a customer of your business. A high CLV indicates that your customers are valuable and will contribute significantly to your revenue over time.

4. Gross and Net Churn Rates

Churn rates measure how many customers you're losing over a given period. Investors are interested in both gross churn (the number of customers lost) and net churn (churn adjusted for expansion revenue). A low net churn rate suggests that your business is retaining and expanding its customer base effectively.

5. Runway

Runway is the amount of time a startup can operate with its current cash reserves. Investors look at runway to assess financial sustainability. A longer runway provides more security and flexibility for the business.

The Role of Product-Market Fit

Before diving into these metrics, it's crucial to ensure that your startup has achieved product-market fit (PMF). PMF means that your product or service fulfills a genuine need in the market and resonates with customers. Without PMF, focusing on investor-focused metrics won't yield the desired results.

Strategies to Improve Investor-Focused Metrics

Once you've identified the investor-focused metrics that matter for your startup, it's time to work on improving them. Here are some strategies to consider:

1. Enhance Your Customer Acquisition Strategy

Invest in marketing and sales initiatives that drive high-quality leads. Focus on channels that deliver customers with a low CAC.

2. Increase Customer Value

To boost CLV, provide exceptional customer service, upsell and cross-sell, and continuously engage with your customer base.

3. Reduce Churn

Address the root causes of churn by improving your product, customer service, and overall customer experience.

4. Extend Your Runway

Explore ways to extend your runway, such as securing additional funding, reducing operational costs, or accelerating revenue growth.

Presenting Metrics to Investors

When seeking investment, it's essential to present your metrics in a clear and compelling manner. Here are some tips for effectively communicating your startup's performance to potential investors:

1. Create Visual Reports

Visual aids like charts and graphs can make your metrics more digestible and engaging. Use tools like Excel, Google Sheets, or dedicated data visualization software.

2. Compare Against Benchmarks

Show how your metrics compare to industry benchmarks or your competitors. Highlight areas where your startup outperforms the norm.

3. Tell a Story

Weave a narrative around your metrics. Explain the journey your startup has taken and how your metrics reflect the progress you've made.

4. Be Transparent

Honesty is crucial. If you're facing challenges or have areas for improvement, address them openly. Investors appreciate transparency.

Conclusion

Understanding and optimizing investor-focused metrics is essential for startup success. By tracking and improving metrics like MRR, CAC, CLV, churn rates, and runway, you'll not only attract investors but also lay the foundation for sustainable growth. Remember to achieve product-market fit before diving into these metrics and, when presenting to investors, communicate your progress clearly and honestly. With the right metrics and a compelling narrative, your startup can unlock the path to success and secure the investment it needs.

Blog Source - Rasmal.com

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Tips for Reducing Customer Acquisition Costs (CAC)

Regardless of network, it is apparent that the digital sector has become a competitive one for enterprises. 

Every brand on the internet is vying for the same consumers' attention (in some way), making effective marketing to your target customer more challenging. 

Furthermore, the average cost of pay-per-click commercials is rising.

It is critical to ensure that your systems and processes for acquiring new clients through these channels are cost-effective.

Aside from launching or sustaining carefully planned paid advertising campaigns, 

there are some strategies you can utilize to reduce your client acquisition costs, 

or at the very least make that figure sustainable and scalable over time.

So, in this piece, I'll define customer acquisition and customer 

acquisition cost (CAC), explain the difference between CAC and CPA and provide 11 strategies and tactics you may use to reduce your customer acquisition cost.

What is customer acquisition?

It implies acquiring paying clients for your company, just as it sounds. 

It does not, however, apply to the single action of clicking "buy" or signing a contract.

 It covers the entire journey from prospect to paying customer.

For some firms (particularly e-Commerce), that road may be brief, with few stops along the way. 

Others with a lengthier sales cycle may have to wait weeks, months, or even years.

Regardless, a customer acquisition strategy attempts to make every step of the client acquisition process as easy as possible

 allowing you to achieve the highest potential conversion rates.

Building up and understanding your company's funnel is one of the most difficult tasks any marketer can take on, 

especially when you don't have the data to back up your judgments. We'll get to that later, but first, let me explain the distinction between CAC and CPA.

Customer acquisition cost vs cost per acquisition

We must emphasize that customer acquisition cost (CAC) is not the same as cost per acquisition (CPA).

What is customer acquisition cost (CAC)?

Your customer acquisition cost calculated by dividing your total advertising spend by the number of new customers gained as a consequence. 

CAC is the most significant parameter for executing direct-response advertising campaigns, 

although it often used to measure the success of your marketing at the business level, rather than the campaign level.

What is cost per acquisition (CPA)?

The cost per acquisition, on the other hand, is a campaign-level measure. 

CPA is simply the cost of acquiring a lead (anyone other than a paying client), whether through a material download, free trial, demo request, or any other type of contact information input with intent.

CPA is crucial in the overall scheme of things, but the conversion rate across the funnel is more so. 

Assume you're generating leads for a sales demo or consultation. 

Although this lead type is considered low-funnel, there may be a significant disparity in how many leads convert on this activity and how many of them become paying customers.

Depending on the nature of your organization and sales processes, 

you may be able to accept a higher CPA if the conversion rate and return on ad spend are good. When competing for premium ad real estate with other firms, this becomes critical.

As previously noted, if you are running e-commerce advertisements, the difference between CAC and CPA may be negligible because you can see whether your ads are making you money instantly.

The first action a user may take is to visit your online store and make a purchase.

How to lower your customer acquisition costs

In this section, I'll go over strategies and tactics to help you reduce your client acquisition costs, or at the very least, 

start thinking about how to enhance the overall efficiency of your marketing funnel.

1. Have tracking in place

I cannot emphasize how vital it is to have precise tracking in place. 

You need to know which traffic is coming from which channel and, preferably, which campaign, from ad click to website visit, lead, and customer.

Don't merely direct customers to a landing page without first enabling conversion tracking on each platform.

That is where you will be able to obtain the baseline CPAs and optimize the campaigns themselves.

It is critical to be able to tie performance to specific campaigns,

 whether you utilize individual landing pages or forms relevant to the channel you are advertising on or construct UTM parameters. 

Also, remember to build up conversion values so that you can immediately link paid advertising expenditure to leads in your pipeline.

2. Set a baseline

Given the significant disparities across firms and sales cycles, determining your CAC may take some time. 

If leads enter your pipeline but take months to convert to clients, you may appear to be losing money for some time.

This is why it is critical to establish baseline conversion rates for your promotions, channels, and platforms. 

You can begin to reliably anticipate the CAC if you learn the average conversion rates across your funnel.

3. Align your ads accordingly

Yes, leads obtained through a demo request are far more likely to become paying customers than leads obtained through a content download.

 An ad providing a free trial for a project management platform, 

on the other hand, is unlikely to do well among individuals looking for project management advice or templates. 

In this case, it might be more appropriate to market a free guide or template. 

Based on who engaged with each preceding ad, you may then build retargeting advertisements for gradually lower-funnel offerings.

4. Have a clear path to conversion

This section could have  titled "optimize your funnel," but it would oversimplify the argument I'm attempting to make.

 The minor components of promotions or offers make up the larger framework of the marketing funnel.

In addition to ensuring that your offers correspond to your consumers' 

state in the funnel, you should also ensure that your subsequent offers correspond to the path they are most likely to take. 

For example, the top of your funnel could include content downloads, 

but you could have numerous distinct types of content.

 It was critical to strategize that content and align it with the target audience's needs, as well as to provide a direct path to sales from that conversion.

And then, be sure to strategize your subsequent offers. 

Leads that download guide A might be interested in a different retargeted ad offer than leads that downloaded guide B, or who used your free tool.

Create progressive, but obvious, conversion routes based on your sales cycle and the offer that generated the lead. 

In this manner, you can avoid drop-offs in lead-to-sale conversion rates.

 For example, a material download that is only distantly related to your product or service may require numerous more small conversions before it converts to a customer. 

You want to plan out each layer of your marketing funnel so that it exactly aligns with sending prospects to sales at the right speed.

5. Use landing pages

There are techniques to boost conversion rates without changing a single landing page, but this should not be your entire plan.

Many people are still not using them, in my opinion. 

In other words, they construct ad campaigns that bring people to their website in the hopes that they would convert.

 Even if your website is conversion-optimized, 

I advise against doing so because there are too many options on your website that can

(and will) distract the user from converting to the action you are targeting with your ad.

Create landing pages that are relevant to the offerings in your ads, with the single CTA on the page being the action you want customers to take.

And this is where you can incorporate critical facts in your landing page copy to address any reservations, communicate your value offer, and increase conversions.

6. Optimize your website and landing page experience

For decades, one of the most prominent topics of conversation has been the online experience. 

Books, blogs, movies, and webinars have all emphasized the critical role that your website plays in turning prospects into consumers.

First, your ad and landing page must be completely consistent (learn more in our landing page tips). 

The copy and visuals should have the same look and feel and convey the same idea.

There should be no cognitive dissonance between these two elements. 

The ad should exactly aligned with the page to which users are directed.

 This is one of the simplest methods for increasing conversion rates and lowering customer acquisition costs.

7. Get into the weeds of conversion data

Whether it's through Google Analytics data or the conversion statistics supplied within advertising platforms (YouTube Studio may surprise you), 

it's critical to understand as much as possible about the conversions that are taking place, such as:

What time of day is it?

Which weekday is it?

What are the devices?

If you find that the majority of your leads convert between the hours of 9 a.m. and 5 p.m., 

Monday through Friday, schedule your advertisements to run solely during those hours to get the most out of your ad spend and minimize your CAC.

If you notice that desktop users are more expensive to acquire but of higher quality, 

you should allow yourself to spend more money on acquiring these people and delete or separate mobile users totally.

Get into the weeds with your conversion statistics so you can spend more only where and when you need to, rather than increasing total costs and wasting money.

8. Check your placement settings

There are various layers to a great paid ad approach that may require several blog posts, but a lot can accomplished simply by paying attention to how your campaigns are set up.

The first detail to double-check is the placements targeting on Facebook or YouTube.

Many businesses, for example, will run direct response campaigns with the “automatic placements” feature activated at the ad set level:

This includes the “Audience Network,” which will serve your Facebook ads across other app assets.

Historically, the Audience Network has resulted in relatively low-quality clicks and few, if any, conversions. 

Although Facebook's algorithm designed to produce the maximum results for a given aim, there is frequently a significant amount of money wasted on Audience Network placement.

9. Check your location settings

Location targeting in Google Ads is another example of a campaign setting that might influence CAC.

 When you browse through the settings for your search campaign, you will discover a section for locations:

If your company needs to deliver advertising to people in a specific location, 

expand the locations tab and pick "people in or often in" your target area, then specify any necessary exclusions.

Often, the simplest things in the layout of a paid advertising campaign can have the greatest impact on the quality of leads you drive through it—and, ultimately, your CAC.

10. Use bidding strategies

Your bid strategy is the final aspect of paid advertising that might affect your customer acquisition cost.

 Using bid tactics (at least within Google and Bing) can significantly enhance your base CPA and, as a result, your CAC.

Target CPA bidding has proven to be an efficient approach for maintaining average costs for sponsored search ads with campaigns that have enough conversion data.

Of course, there are many more aspects and levels to the funnel than the prices at the top, but you should take advantage of every opportunity to improve these KPIs. 

When deciding how competitive to be, keep the audience (or keyword) and the funnel/promotion in mind.

11. Create great content

You can't get away from it. 

Content is always the key to marketing success. 

The guides and collateral you create, the copy on their landing pages, and the ad copy that promotes them (and other non-content offers).

Conclusion

As you can see, cutting client acquisition cost (CAC) 

requires boosting conversions and lowering the cost of those conversions (CPA) throughout your whole funnel for organizations with a longer sales cycle. 

You can contact Nummero if you are looking for the best marketing service top digital agency in Bangalore.

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10 Ways Online Reputation Management Protects Your Business

If you own your own business, you know the importance of having an online presence and managing it well to provide good information about your company and allow customers to connect with you and with each other. 

Online reputation management (ORM) refers to the process of protecting your online reputation and helping it grow through positive, natural search results and mentions on relevant websites. 

ORM also includes monitoring what others are saying about you online, such as on social media and review sites, so that you can take appropriate actions to ensure the reputation of your business stays strong and healthy. 

Today we’re going to take a look at 10 ways online reputation management helps your business grow and improve your bottom line. Here we go!

1) Strengthens brands

No matter how good your products or services are, if customers can’t find you online, it’s almost impossible to build a successful business. Online reputation management gives you control over all of your content so you can strengthen your brand and help customers discover it with ease. Make sure people see what they need to see when they need to see it by hiring an online reputation management company for professional search engine optimization (SEO) services that keep customers happy and businesses thriving. Use these tips to protect your company now

2) Reduces customer acquisition costs

While we don’t want to reveal our actual ROI here, we can say that you’ll notice a dramatic drop in your customer acquisition costs (CAC) after starting an online reputation management program. For example, if you can cut your CAC by 50%, then that means that you only need half as many leads to hit your target revenue. 

You may also be able to use more aggressive sales techniques with lower costs of failure. This leads to happier customers because they are being sold what they need instead of something they don’t necessarily want, which further reduces costs and improves performance for you as a business owner.

3) Improves profits

On one hand, your business needs to maintain a good reputation. That’s because people buy from people they trust. But there’s another important reason for improving your online reputation: money. 

The more satisfied and confident potential customers are, the more likely they are to buy from you again and again and become loyal customers of your brand or service. And if their friends and family members hear about positive experiences through word-of-mouth advertising, you can gain new clients without spending a dime on advertisements!

4) Provides data security

Almost every business that accepts credit cards relies on a merchant account. A merchant account allows your business to accept credit card payments for products and services online. Additionally, all businesses need a robust Internet connection for fast upload speeds. Maintaining a stable Internet connection is vital to protecting your reputation, as customers will think twice about doing business with a company that can’t provide uninterrupted service or posts accurate product descriptions. 

All of these tools help guarantee your online reputation is protected from competitors, dissatisfied customers, and scammers alike. When you maintain an active online presence, you boost customer confidence in your products and services by showing that other people have been satisfied with what you have to offer.

5) Improves productivity

A company’s reputation can be seriously damaged by negative online comments. These negative comments can spread quickly, costing your business sales, clients, and potential opportunities. A reputation management strategy will help monitor what is being said about your company in real-time, alerting you of online criticism before it spreads. 

This will save you valuable time that would have been spent trying to undo the damage already done by a damaging comment or review.

6) A Push To SEO Strategy

If your company is looking to break into a new market or expand an existing one, you must have a social media presence—that is, your target audience needs to be able to find you. Unfortunately, most online consumers use search engines when shopping for a product or service. 

This means that if they can’t find you on search engine results pages (SERPs), they probably won’t find you at all. If your business doesn’t have a strong SEO strategy in place, it’ll take more time and money than it should to get off the ground and prove its value in terms of ROI.

7) Minimizes legal risk

A business's reputation is not something to take lightly. Numerous legal issues can arise when dealing with online reputation management. For example, if you make a claim on your website or in your marketing materials about your product (its size, effectiveness, etc.), you risk getting sued if it’s false. 

Similarly, if your marketing campaign isn’t compliant with Federal Trade Commission (FTC) regulations—specifically its law protecting consumers from deceptive advertising—you could get into legal trouble. It is important to understand that an SEO firm can help maximize your online reputation by identifying potential problems and finding solutions that will help minimize these risks. To read more on how they do it, click here.

8) Promotes human rights compliance

Let’s say you work for a client who has a less-than-stellar reputation. Your client is notorious for disregarding human rights laws. You don’t want to lose business by turning down jobs from such an organization, but you also don’t want to contribute to injustices—it could be hard to sleep at night if you knowingly took part in something like that. 

Thankfully, due diligence and online reputation management can protect your company and its employees from these sorts of sticky situations: it ensures that any questionable content about your clients or partners is removed as soon as possible.

9) Ensures public safety

At the point when you're maintaining a business, there are not many things more significant than public security. Many organizations track down that online reputation management is a decent way to deal with data and guarantee that both their customers and potential workers can believe what they're saying.

Properly managing your online image is key to safeguarding yourself and your company from false accusations, potential lawsuits, or losing professional credibility with stakeholders or community leaders. 

Ensuring your reputation is safe also has tangible value: It builds trust between you and those who matter most to your organization, such as suppliers, vendors, and clients. This makes it easier for them to want to continue doing business with you because they know their interests are being taken care of.

10) Helps avoid lawsuits

Internet libel and defamation laws vary from state to state, and if your reputation is damaged by a negative review or other harmful content, you may have legal recourse. What's more, those who publish false or misleading information about your business can be held liable for damages under Section 230 of the Communications Decency Act. In some cases, even those who simply distribute defamatory material can be held liable. 

Of course, proving someone is liable requires a lawyer. However, knowing that online defamation exists as a possibility can help guide you in establishing an online reputation management plan.

Conclusion

How can I trust your business if you've gotten bad reviews online? If you've gotten negative reviews, don't panic. You may not know that many studies show that 75% of people make buying decisions based on an online review. 

With access to more information than ever before, consumers can find out about your company faster than you could ever hope to tell them about it. Therefore, online reputation management services are vital for businesses looking to establish themselves and grow their client base. 

As seen above, there are numerous constructive outcomes of reputation management; organizations should exploit these advantages by working with a reputation management firm today!

[lifesobeautiful]

3 Ways to Reduce Customer Acquisition Costs

Have you ever stopped to think how much it costs to get a person to buy one of your products?

Then you’re in the right place.

Customers come with a price tag called customer acquisition cost (CAC), and it’s one of the most important pieces of information for business owners who want to get more customers without breaking their marketing budget.

So, how do you get more customers without breaking the bank? We’ve broken things down into three categories:

Streamline your customer’s shopping process

Optimize your marketing tactics

Embrace customer relationship management

Let’s dive right in!

What is customer acquisition cost?

Your customer acquisition cost is defined as how much it costs your business to attract a new customer.

How to calculate customer acquisition cost

CAC is calculated by adding up all your marketing and sales costs and dividing them by the number of new customers acquired for a certain period of time. Here’s the formula:

For example:

Let’s say you spent $5,000 on marketing and sales expenses this October. That same month, you got 1,000 new customers (meaning only customers that have never previously visited or made a transaction at your store).

Sum of all marketing and sales expenses = $5,000.00 Total newly acquired customers = 1,000 CAC = $5

In this example, it costs you $5 to acquire a new customer.

The next question you should ask is “what is my average transaction value?” If your point of sale system’s sales reports tell you that your average transaction value (ATV) for October is under $5, that means you’re effectively spending more than you’re making per sale. Not good. Your ATV should ideally be higher than your CAC.

How to reduce customer acquisition cost

Let’s say you fall into the above category: Your CAC is higher than your ATV. How do you lower your CAC?

Streamline your customer’s shopping experience

A great way to lower your acquisition cost? Remove as many barriers to purchase as possible.

Make it easy for customers to find and buy what they’re looking for either in your store or on your website. The easier it is for them to find and complete a purchase, the more transactions your store stands to make (that’s why online vendors are developing one-click to purchase technology).

The same can be said for brick-and-mortar transactions: Every retailer’s goal should be to remove as many friction points from their purchasing process as possible.

Imagine being a customer ready to buy something, only to find yourself in a lengthy lineup to pay. Most customers will abandon their purchase entirely if the wait time is too long. Research from Irisys found that Americans will leave a checkout line after waiting just six minutes.

The best way to stop losing sales from long checkout lineups? Eliminate them altogether.

Barbara Thau, a contributing writer for Forbes, suggests that brick-and-mortar retailers “banish the wait in line, once and for all” to avoid losing sales.

A cloud-based point of sale effectively removes the need for lineups and traditional cash registers. Sales associates can ring up sales from anywhere in the store and accept any type of payment. Only If the transaction is in cash do you need to move the transaction to your cash register, but consumers are using cash less and less these days.

If you want to increase your average transaction value, we suggest refreshing your store merchandising and point of purchase displays to cross-sell more items. For a deeper look into how you can increase in-store sales, check out a list that Lightspeed curated with other retail experts, How to Increase Retail Sales – 11 Tips.

Make your business easy to find online by local customers

The next step is to get more customers to find your store or website for free. To do this, we suggest doing the following:

Create a Google My Business (GMB) profile

Include your store’s contact information on its Facebook and Instagram Business Profile

Use the right keywords to describe your business on your Facebook and Instagram Business Profile

The concept here is simple: focus your marketing on people that live close to your business. If they can find you online, see your inventory and get directions fast, the likelihood of them paying you a visit increases substantially.

That’s why we created a step-by-step guide to creating a GMB profile and optimizing your business’s Facebook and Instagram profiles so that you get found online by more local customers entirely for free. With a little work, you can attract customers for $0.

Embrace customer relationship management

If you consistently have what customers are looking for in stock and your customer service is personalized, friendly and helpful, customers are likely to come back to your store again and again.

The more they come, the more they buy. Commonly known as customer lifetime value (CLV), the metric looks at the estimated revenue you make from a customer over the duration of their relationship with the company.

We mentioned ATV earlier, you can think of this as a micro view of your sales. CLV, on the other hand, is the macro view—the big picture.

In an ideal world, you want a 3:1 CLV to CAC ratio. In a nutshell, this means that you generate three times more revenue from a customer than what it cost you to acquire them.

But how do you achieve that ratio? In part, by leveraging loyalty programs, referral programs and customer retention.

Loyalty programs

A loyalty rewards program incentivizes members to make more purchases, eventually getting points they can exchange for exclusive rewards. In a nutshell, it motivates repeat visits and purchases. The more purchases they make, the more points they get to exchange for exclusive offers, promotions and gifts.

For the retailer, the loyalty program helps grow their CLV. It’s a win-win scenario.

See Also: Will Your Customers Buy From You Tomorrow?

Referral Programs

Your existing customers are your store’s biggest brand ambassadors. If they’re happy, they’re more likely to recommend your store to friends.

Believe it or not, brand ambassadors and referrals are one of the most effective ways to bring in new customers. 77% of customers are likely to buy from a business that they’re introduced to by friends.

Rather than sinking tons of cash into marketing to acquire customers, the most cost-effective (and financially sustainable) way to acquire new customers is for your happy customers to spread the word and recommend your business for you.

It’s an authentic trust signal that marketing alone simply can’t replicate.

Consider incentivizing your customers to refer your business to friends and family. For every customer they refer, they get more points they can use as part of your rewards program.

Customer retention

Did you know that it’s up to 25 times more expensive to acquire a new customer than to retain an existing one?

This means one thing: If you focus on keeping your existing customers happy (happy enough to recommend your store to friends), you can get them to find new customers for you. It’s cheaper and more effective.

Want to know what your business’s current customer retention rate is? Just use this formula:

Retaining customers brings in a ton of ROI:

Affordable: It’s five to 25 times more expensive to acquire a new customer than it is to retain an existing customer. (HBR)

ROI: Just a 5% increase in customer retention can increase a company’s revenue by 25-95%. (HBR)

Loyalty: Retained customers buy more often and spend more than newer customers (maybe in part to the loyalty and rewards programs they offer). (American Express)

Referrals: Satisfied, loyal customers are more likely to refer their friends and family—bringing in new customers, without having to spend anything on marketing. (American Express)

See Also: 12 Tips That Build Customer Loyalty And Boost Sales

Improve your customer acquisition cost

Improving your customer acquisition cost is a process that should start from the inside out.

Before you focus on finding new customers and launching fancy marketing campaigns, you need to make your existing customers happy. When your customers are happy, they’ll voluntarily recommend your business to friends and family. Your customers turn into brand evangelists; walking trust signals that find new customers for you, free of charge.

The next step is increasing your customer’s lifetime value. With Loyalty and referral programs, you can increase how much your customers spend in store and achieve that coveted 3:1 CLV to CAC ratio we mentioned earlier in the post.

But it all starts with customer happiness. When customers are happy, businesses don’t need to spend as much on marketing to convince people that their shop is worth going to and spending their hard earned money.

The post 3 Ways to Reduce Customer Acquisition Costs appeared first on Dumb Little Man.

This article was first shared from Dumb Little Man

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News reports & helpful tips on POS System Equipment & POS.

If you have just migrated to a Magento 2 website and haven’t got a mobile version of your website yet, the most concerning question to you is probably “How to optimize my website for mobile devices?”

The simplest and fastest way is to build a progressive web app (PWA), which meets mobile-first standards and has an app-like interface. In case your Magento version is 2.3.x and above, you’ve already had free access to PWA Studio, Magento’s full set of tools to build PWA for your website. However, this article won’t go into technical details. Instead, we’ll help you understand the definition and importance of PWA from a business perspective.

What is PWA?

PWA features

PWA benefits from a business perspective

Successful PWA examples in retail

What is PWA?

Progressive Web Application (PWA) is a web standard that uses design patterns and advanced technologies to deliver a fast and reliable experience to users on both mobile and desktop devices. It can work on any platform using standard-compliant browsers with the aims to:

Increase customer engagement

Boost conversion rates

Diversify revenue streams

Bonus facts:

In 2015, the term PWA was coined by a designer and a Chrome developer as a “deep shift in our understanding and tools” to “build better experiences across devices and contexts within a single codebase”. Then, it was quickly adapted and developed by Google, Windows, and Apple.

However, the initial idea of a PWA didn’t come not from any of the named software providers. It was Steve Jobs who invented and presented it during the annual iPhone launch in 2007.

PWA features

Simply put, PWA provides a website with the characteristics of a native app and beyond.

App-like interface

Customers tend to have expectations for native apps experience when using mobile devices to browse websites. Therefore, the website interface should be designed to accommodate seamless and fast interactions. This is where PWA’s design strengths come to the fore.

Full responsiveness

PWA sites provide a consistent experience through all kinds of devices, including tablet, mobile, and desktop.

Cross-browser compatibility

Most of your customers usually visit your website first. PWA has a consistently high performance on popular browsers such as Chrome, Safari, and Firefox. Therefore, it has the widest reach to any customer segmentation.

Easy installation and add to home screen

Convincing users to install an app is challenging and very expensive for businesses. Most mobile users have chosen their favorite sets of applications. While they value the mobile experience of native apps, customers are not willing to download and install new apps. PWA avoids the middleman step of searching in app stores, requiring no download or installation:

Customers can surf PWA websites on any browser.

On the first access, the browser will display a prompt to remind customers to add it to the home screen.

Regarding the fact that customers prefer tapping app icons to access their favorites rather than navigating to a website using a browser, PWA’s add to home screen feature is valuable in this situation.

Offline mode or connectivity independent

Thanks to its Service Workers technology, PWA can work offline.

When your customers first visit your website, your site’s content will be cached. Customers can continue to interact without interruption, even if they lose their network connection.

On the next visit, your device will reload the saved content without the internet, making the page browsing speed very fast.

Self-updates

The Service Worker update process keeps the PWA site updated automatically and continuously. You don’t need to submit your updates to the App Store or Play Store and wait for review before releasing a new version.

Mobile perks

PWA has the ability to access the home screen and send real-time alerts and push notifications to engage customers, even when the application isn’t running.

Performance optimization

PWAs use less data than native apps and load content fast. With faster loading times, PWAs reduce server load and minimize the risk of slowdowns or crashes during high-traffic times, like major year-end sales.

Security

HTTPS connections of PWA are the highest level of security, served via TLS to block snooping.

Shareable content

With one PWA’s unique URL link, you can share it for others to access on any platform via social media or other apps.

SEO-friendliness

PWA sites can be indexed by Googlebot so you can optimize them based on Google’s guidelines and best practices.

PWA benefits from a business perspective

In turn, PWA brings outstanding advantages for businesses:

Increase organic search traffic to capture new sales

One of the hardest tasks on the planet is to make customers know that your store exists. According to a recent survey, more than nearly 60% of search queries come from mobile devices. As a result, Google has shifted its priority to returning results for mobile-first websites.

In that situation, it’s best to help your business get more mobile traffic with mobile-friendly features. PWA can increase the ranking of websites by much faster page load times and consuming less device memory and network data.

Boost brand awareness to engage more with customers

Large businesses and brands have taken up most of the number of apps on customers’ screens. With the add-to-home-screen feature, PWA sites open the opportunity for small and medium businesses to put their brand on the home screen of more users. This ensures brand visibility and enhances the top position.

When using PWA, SMEs can expect much higher customer engagement. Customers add your PWA site after they’re sure your site has everything they need. This brings you one step closer to your customers. When the PWA is placed in their home screen, it’s easy for customers to see and remember your store as soon as they unlock their device. Specifically, user sessions on PWA sites are 78.25% longer than websites and apps.

Remarketing leads to get more returning customers

Businesses often find it difficult to capture accurate and detailed information about customers. With a PWA, you can see how your customers interact with your website from the moment they install it.

After they pin the PWA site to their home screen, you can keep sending them information about the latest products and services with instant pop-ups. These offers are delivered on the basis of the pages the customer has visited, the number and duration of each session, and their location.

In short, you can refine leads much more easily and directly with PWAs than with traditional websites or native apps. Your sales and marketing teams can utilize the information to target your audience better, so you’ll enjoy lower Cost of User Acquisition (CAC) and higher marketing ROI.

Enhance customer experience to improve conversion rates

Google mentioned 3 key factors of PWA that can improve customer experience and reduce bounce rates on your website:

Reliable: Load immediately and never display the dinosaur jumping through the desert, even in unstable internet connection

Fast: Respond instantly to customer interactions with smooth moving images and no complicated scrolling required

Engaging: Feels like a native app with a rich UI/UX on all devices, equally in desktop, tablets, and mobile

All of the above benefits lead to higher levels of customer engagement and overall performance, increasing conversion rate and revenue growth.

Offer more affordable alternatives solution to native apps

PWAs vs native apps? Both of them deliver great customer experience on mobile with different strengths and weaknesses. Retails can use native apps to engage their loyal customers who are willing to install them, but PWAs makes it easier to reach new customers. Depending on the selection factors and priorities, you can judge which is the better choice.

PWA wins the fields of:

Shorter development time

Smaller budget

Strong SEO profile following website best practices

Native apps win the fields of:

Credibility certified by App Store and Play Store

More security options

Advanced mobile features

You can read more details from the developer’s perspective and the user’s perspective in our article PWA vs Native App.

Successful PWA case studies in retails

Now you may be wondering if any companies have succeeded in implementing PWA, and how effective is it? The answer is “Yes”. They are familiar brands that you may have visited and purchased some products from their PWA sites. Let’s take a look at 5 interesting examples of PWA in retail and how they improve their bottom line.

Starbucks

Industry: Retail coffee and snacks store. PWA launching time: 2015. Business requirements:

Provide customers with faster and responsive performance than the previous apps

Allow customers to access the nutrition information, browse the menu, and customize their orders without network. This is very subtle considering the cases where Starbucks customers take the subway in the morning and often lose their internet connection in the middle of ordering.

Solution: Starbucks built an app-like PWA website with smoothly animated images and the ability to work offline.

Efficient results: Starbucks reported:

A 2x increase in their daily active users

A huge data storage saving by 99.84% (the PWA needs only 233 KB while the previous app requires 148 MB)

AliExpress

Industry: An one-stop website to shop everything from refrigerators to baby clothes in China.

PWA launching time: 2016.

Business requirements:

Build a compelling website experience like their previous mobile app, but provide a faster loading speed

Not require customers to download and install to start interacting with them

Solution: AliExpress combines the best features of their app to build the new PWA site with a wide reach. As a result, they delight their customers with PWA’s benefits such as offline working and productivity.

Efficient results: With their new PWA, AliExpress registered:

43% more sessions per user

20% increase in ad viewability

Triple scroll depth

Lancôme

Industry: Luxury cosmetics.

PWA launching time: 2016.

Business requirements:

Drives more traffic and sales

Increase conversion rate, which was only 15% in 2015

Allow customers to search and purchase products more easily on mobile

Solution: Their PWA works as a fast app-like solution for more mobile-friendly and also right user experience (UX) on all kinds of devices. Its performance is stable on a weak internet connection and provides push notifications that engage customers.

Efficient results: Lancôme’s new PWA achieved:

18% open push notifications

8% of customers tapping on a push notification and purchase

More than 50% rise in the number of mobile sessions

15% decrease in bounce rate

51% increase in mobile sessions

17% increase in conversions rate

Flipkart

Industry: The largest eCommerce store in India.

PWA launching time: 2016.

Business requirements: Optimize loading speed because most of the mobile users in India use 2G network to access the site.

Solution: PWA’s add to home screen, offline mode, and fast loading feature are incredibly valuable here.

Efficient results: Flipkart Lite that plays an important role in boosting their revenue:

3x more spending time on site (3.5 minutes for the new PWA vs. 70 seconds for the old website)

40% higher engagement rate

70% increase in rate conversions

3x lower data usage

George.com

Industry: A leading UK clothing brand, part of Walmart.

PWA launching time: 2018.

Business requirements:

Revamp the outdated mobile website

Improve the offer for customers

Solution: George.com adopt a mobile-first approach, focusing on speed, design, and functionality to increase mobile conversions.

Efficient results: After transforming to a PWA site, George.com gained:

31% increase in mobile conversion

3.8x faster page loading time

2x lower bounce rate

31% increase in conversion rate

20% more page views per visit

28% longer time on site for “Add to Home Screen” prompt

There are many other success stories of PWA that you can find via the website PWA Stats indicating its benefits from a business point of view.

Conclusion

PWAs are the latest trend in the digital world and can replace native apps in many situations. They are extremely fast and use only a single codebase across platforms, making their coverage broad and diverse with every set of customers.

Offline capacity, short loading times, native-like UX, push notifications, icon on the homepage, and offline access make PWA increase engagement and boost customer experience on mobile.

PWAs are a direct answer to the needs of mobile customers and enable businesses to increase mobile conversion rate. Investment in PWA can result in significant measurable benefits. With a PWA Storefront, you can develop an app and a web page at the same time with a shorter time-to-market and lower costs. So, let’s try and keep up with this technology in 2021!

The post What is PWA & its benefits for retailers appeared first on World’s #1 POS for Magento.

This post was first published here.

We trust you found the article above of help or of interest. You can find similar content on our main site here: northtxpointofsale.com Let me have your feedback in the comments section below. Let us know what subjects we should write about for you in the future.

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News reports & helpful tips on POS System Equipment & POS.

If you have just migrated to a Magento 2 website and haven’t got a mobile version of your website yet, the most concerning question to you is probably “How to optimize my website for mobile devices?”

The simplest and fastest way is to build a progressive web app (PWA), which meets mobile-first standards and has an app-like interface. In case your Magento version is 2.3.x and above, you’ve already had free access to PWA Studio, Magento’s full set of tools to build PWA for your website. However, this article won’t go into technical details. Instead, we’ll help you understand the definition and importance of PWA from a business perspective.

What is PWA?

PWA features

PWA benefits from a business perspective

Successful PWA examples in retail

What is PWA?

Progressive Web Application (PWA) is a web standard that uses design patterns and advanced technologies to deliver a fast and reliable experience to users on both mobile and desktop devices. It can work on any platform using standard-compliant browsers with the aims to:

Increase customer engagement

Boost conversion rates

Diversify revenue streams

Bonus facts:

In 2015, the term PWA was coined by a designer and a Chrome developer as a “deep shift in our understanding and tools” to “build better experiences across devices and contexts within a single codebase”. Then, it was quickly adapted and developed by Google, Windows, and Apple.

However, the initial idea of a PWA didn’t come not from any of the named software providers. It was Steve Jobs who invented and presented it during the annual iPhone launch in 2007.

PWA features

Simply put, PWA provides a website with the characteristics of a native app and beyond.

App-like interface

Customers tend to have expectations for native apps experience when using mobile devices to browse websites. Therefore, the website interface should be designed to accommodate seamless and fast interactions. This is where PWA’s design strengths come to the fore.

Full responsiveness

PWA sites provide a consistent experience through all kinds of devices, including tablet, mobile, and desktop.

Cross-browser compatibility

Most of your customers usually visit your website first. PWA has a consistently high performance on popular browsers such as Chrome, Safari, and Firefox. Therefore, it has the widest reach to any customer segmentation.

Easy installation and add to home screen

Convincing users to install an app is challenging and very expensive for businesses. Most mobile users have chosen their favorite sets of applications. While they value the mobile experience of native apps, customers are not willing to download and install new apps. PWA avoids the middleman step of searching in app stores, requiring no download or installation:

Customers can surf PWA websites on any browser.

On the first access, the browser will display a prompt to remind customers to add it to the home screen.

Regarding the fact that customers prefer tapping app icons to access their favorites rather than navigating to a website using a browser, PWA’s add to home screen feature is valuable in this situation.

Offline mode or connectivity independent

Thanks to its Service Workers technology, PWA can work offline.

When your customers first visit your website, your site’s content will be cached. Customers can continue to interact without interruption, even if they lose their network connection.

On the next visit, your device will reload the saved content without the internet, making the page browsing speed very fast.

Self-updates

The Service Worker update process keeps the PWA site updated automatically and continuously. You don’t need to submit your updates to the App Store or Play Store and wait for review before releasing a new version.

Mobile perks

PWA has the ability to access the home screen and send real-time alerts and push notifications to engage customers, even when the application isn’t running.

Performance optimization

PWAs use less data than native apps and load content fast. With faster loading times, PWAs reduce server load and minimize the risk of slowdowns or crashes during high-traffic times, like major year-end sales.

Security

HTTPS connections of PWA are the highest level of security, served via TLS to block snooping.

Shareable content

With one PWA’s unique URL link, you can share it for others to access on any platform via social media or other apps.

SEO-friendliness

PWA sites can be indexed by Googlebot so you can optimize them based on Google’s guidelines and best practices.

PWA benefits from a business perspective

In turn, PWA brings outstanding advantages for businesses:

Increase organic search traffic to capture new sales

One of the hardest tasks on the planet is to make customers know that your store exists. According to a recent survey, more than nearly 60% of search queries come from mobile devices. As a result, Google has shifted its priority to returning results for mobile-first websites.

In that situation, it’s best to help your business get more mobile traffic with mobile-friendly features. PWA can increase the ranking of websites by much faster page load times and consuming less device memory and network data.

Boost brand awareness to engage more with customers

Large businesses and brands have taken up most of the number of apps on customers’ screens. With the add-to-home-screen feature, PWA sites open the opportunity for small and medium businesses to put their brand on the home screen of more users. This ensures brand visibility and enhances the top position.

When using PWA, SMEs can expect much higher customer engagement. Customers add your PWA site after they’re sure your site has everything they need. This brings you one step closer to your customers. When the PWA is placed in their home screen, it’s easy for customers to see and remember your store as soon as they unlock their device. Specifically, user sessions on PWA sites are 78.25% longer than websites and apps.

Remarketing leads to get more returning customers

Businesses often find it difficult to capture accurate and detailed information about customers. With a PWA, you can see how your customers interact with your website from the moment they install it.

After they pin the PWA site to their home screen, you can keep sending them information about the latest products and services with instant pop-ups. These offers are delivered on the basis of the pages the customer has visited, the number and duration of each session, and their location.

In short, you can refine leads much more easily and directly with PWAs than with traditional websites or native apps. Your sales and marketing teams can utilize the information to target your audience better, so you’ll enjoy lower Cost of User Acquisition (CAC) and higher marketing ROI.

Enhance customer experience to improve conversion rates

Google mentioned 3 key factors of PWA that can improve customer experience and reduce bounce rates on your website:

Reliable: Load immediately and never display the dinosaur jumping through the desert, even in unstable internet connection

Fast: Respond instantly to customer interactions with smooth moving images and no complicated scrolling required

Engaging: Feels like a native app with a rich UI/UX on all devices, equally in desktop, tablets, and mobile

All of the above benefits lead to higher levels of customer engagement and overall performance, increasing conversion rate and revenue growth.

Offer more affordable alternatives solution to native apps

PWAs vs native apps? Both of them deliver great customer experience on mobile with different strengths and weaknesses. Retails can use native apps to engage their loyal customers who are willing to install them, but PWAs makes it easier to reach new customers. Depending on the selection factors and priorities, you can judge which is the better choice.

PWA wins the fields of:

Shorter development time

Smaller budget

Strong SEO profile following website best practices

Native apps win the fields of:

Credibility certified by App Store and Play Store

More security options

Advanced mobile features

You can read more details from the developer’s perspective and the user’s perspective in our article PWA vs Native App.

Successful PWA case studies in retails

Now you may be wondering if any companies have succeeded in implementing PWA, and how effective is it? The answer is “Yes”. They are familiar brands that you may have visited and purchased some products from their PWA sites. Let’s take a look at 5 interesting examples of PWA in retail and how they improve their bottom line.

Starbucks

Industry: Retail coffee and snacks store. PWA launching time: 2015. Business requirements:

Provide customers with faster and responsive performance than the previous apps

Allow customers to access the nutrition information, browse the menu, and customize their orders without network. This is very subtle considering the cases where Starbucks customers take the subway in the morning and often lose their internet connection in the middle of ordering.

Solution: Starbucks built an app-like PWA website with smoothly animated images and the ability to work offline.

Efficient results: Starbucks reported:

A 2x increase in their daily active users

A huge data storage saving by 99.84% (the PWA needs only 233 KB while the previous app requires 148 MB)

AliExpress

Industry: An one-stop website to shop everything from refrigerators to baby clothes in China.

PWA launching time: 2016.

Business requirements:

Build a compelling website experience like their previous mobile app, but provide a faster loading speed

Not require customers to download and install to start interacting with them

Solution: AliExpress combines the best features of their app to build the new PWA site with a wide reach. As a result, they delight their customers with PWA’s benefits such as offline working and productivity.

Efficient results: With their new PWA, AliExpress registered:

43% more sessions per user

20% increase in ad viewability

Triple scroll depth

Lancôme

Industry: Luxury cosmetics.

PWA launching time: 2016.

Business requirements:

Drives more traffic and sales

Increase conversion rate, which was only 15% in 2015

Allow customers to search and purchase products more easily on mobile

Solution: Their PWA works as a fast app-like solution for more mobile-friendly and also right user experience (UX) on all kinds of devices. Its performance is stable on a weak internet connection and provides push notifications that engage customers.

Efficient results: Lancôme’s new PWA achieved:

18% open push notifications

8% of customers tapping on a push notification and purchase

More than 50% rise in the number of mobile sessions

15% decrease in bounce rate

51% increase in mobile sessions

17% increase in conversions rate

Flipkart

Industry: The largest eCommerce store in India.

PWA launching time: 2016.

Business requirements: Optimize loading speed because most of the mobile users in India use 2G network to access the site.

Solution: PWA’s add to home screen, offline mode, and fast loading feature are incredibly valuable here.

Efficient results: Flipkart Lite that plays an important role in boosting their revenue:

3x more spending time on site (3.5 minutes for the new PWA vs. 70 seconds for the old website)

40% higher engagement rate

70% increase in rate conversions

3x lower data usage

George.com

Industry: A leading UK clothing brand, part of Walmart.

PWA launching time: 2018.

Business requirements:

Revamp the outdated mobile website

Improve the offer for customers

Solution: George.com adopt a mobile-first approach, focusing on speed, design, and functionality to increase mobile conversions.

Efficient results: After transforming to a PWA site, George.com gained:

31% increase in mobile conversion

3.8x faster page loading time

2x lower bounce rate

31% increase in conversion rate

20% more page views per visit

28% longer time on site for “Add to Home Screen” prompt

There are many other success stories of PWA that you can find via the website PWA Stats indicating its benefits from a business point of view.

Conclusion

PWAs are the latest trend in the digital world and can replace native apps in many situations. They are extremely fast and use only a single codebase across platforms, making their coverage broad and diverse with every set of customers.

Offline capacity, short loading times, native-like UX, push notifications, icon on the homepage, and offline access make PWA increase engagement and boost customer experience on mobile.

PWAs are a direct answer to the needs of mobile customers and enable businesses to increase mobile conversion rate. Investment in PWA can result in significant measurable benefits. With a PWA Storefront, you can develop an app and a web page at the same time with a shorter time-to-market and lower costs. So, let’s try and keep up with this technology in 2021!

The post What is PWA & its benefits for retailers appeared first on World’s #1 POS for Magento.

This post was first published here.

We trust you found the article above of help or of interest. You can find similar content on our main site here: northtxpointofsale.com Let me have your feedback in the comments section below. Let us know what subjects we should write about for you in the future.

[afrolatinxsunited]

News reports & helpful tips on POS System Equipment & POS.

If you have just migrated to a Magento 2 website and haven’t got a mobile version of your website yet, the most concerning question to you is probably “How to optimize my website for mobile devices?”

The simplest and fastest way is to build a progressive web app (PWA), which meets mobile-first standards and has an app-like interface. In case your Magento version is 2.3.x and above, you’ve already had free access to PWA Studio, Magento’s full set of tools to build PWA for your website. However, this article won’t go into technical details. Instead, we’ll help you understand the definition and importance of PWA from a business perspective.

What is PWA?

PWA features

PWA benefits from a business perspective

Successful PWA examples in retail

What is PWA?

Progressive Web Application (PWA) is a web standard that uses design patterns and advanced technologies to deliver a fast and reliable experience to users on both mobile and desktop devices. It can work on any platform using standard-compliant browsers with the aims to:

Increase customer engagement

Boost conversion rates

Diversify revenue streams

Bonus facts:

In 2015, the term PWA was coined by a designer and a Chrome developer as a “deep shift in our understanding and tools” to “build better experiences across devices and contexts within a single codebase”. Then, it was quickly adapted and developed by Google, Windows, and Apple.

However, the initial idea of a PWA didn’t come not from any of the named software providers. It was Steve Jobs who invented and presented it during the annual iPhone launch in 2007.

PWA features

Simply put, PWA provides a website with the characteristics of a native app and beyond.

App-like interface

Customers tend to have expectations for native apps experience when using mobile devices to browse websites. Therefore, the website interface should be designed to accommodate seamless and fast interactions. This is where PWA’s design strengths come to the fore.

Full responsiveness

PWA sites provide a consistent experience through all kinds of devices, including tablet, mobile, and desktop.

Cross-browser compatibility

Most of your customers usually visit your website first. PWA has a consistently high performance on popular browsers such as Chrome, Safari, and Firefox. Therefore, it has the widest reach to any customer segmentation.

Easy installation and add to home screen

Convincing users to install an app is challenging and very expensive for businesses. Most mobile users have chosen their favorite sets of applications. While they value the mobile experience of native apps, customers are not willing to download and install new apps. PWA avoids the middleman step of searching in app stores, requiring no download or installation:

Customers can surf PWA websites on any browser.

On the first access, the browser will display a prompt to remind customers to add it to the home screen.

Regarding the fact that customers prefer tapping app icons to access their favorites rather than navigating to a website using a browser, PWA’s add to home screen feature is valuable in this situation.

Offline mode or connectivity independent

Thanks to its Service Workers technology, PWA can work offline.

When your customers first visit your website, your site’s content will be cached. Customers can continue to interact without interruption, even if they lose their network connection.

On the next visit, your device will reload the saved content without the internet, making the page browsing speed very fast.

Self-updates

The Service Worker update process keeps the PWA site updated automatically and continuously. You don’t need to submit your updates to the App Store or Play Store and wait for review before releasing a new version.

Mobile perks

PWA has the ability to access the home screen and send real-time alerts and push notifications to engage customers, even when the application isn’t running.

Performance optimization

PWAs use less data than native apps and load content fast. With faster loading times, PWAs reduce server load and minimize the risk of slowdowns or crashes during high-traffic times, like major year-end sales.

Security

HTTPS connections of PWA are the highest level of security, served via TLS to block snooping.

Shareable content

With one PWA’s unique URL link, you can share it for others to access on any platform via social media or other apps.

SEO-friendliness

PWA sites can be indexed by Googlebot so you can optimize them based on Google’s guidelines and best practices.

PWA benefits from a business perspective

In turn, PWA brings outstanding advantages for businesses:

Increase organic search traffic to capture new sales

One of the hardest tasks on the planet is to make customers know that your store exists. According to a recent survey, more than nearly 60% of search queries come from mobile devices. As a result, Google has shifted its priority to returning results for mobile-first websites.

In that situation, it’s best to help your business get more mobile traffic with mobile-friendly features. PWA can increase the ranking of websites by much faster page load times and consuming less device memory and network data.

Boost brand awareness to engage more with customers

Large businesses and brands have taken up most of the number of apps on customers’ screens. With the add-to-home-screen feature, PWA sites open the opportunity for small and medium businesses to put their brand on the home screen of more users. This ensures brand visibility and enhances the top position.

When using PWA, SMEs can expect much higher customer engagement. Customers add your PWA site after they’re sure your site has everything they need. This brings you one step closer to your customers. When the PWA is placed in their home screen, it’s easy for customers to see and remember your store as soon as they unlock their device. Specifically, user sessions on PWA sites are 78.25% longer than websites and apps.

Remarketing leads to get more returning customers

Businesses often find it difficult to capture accurate and detailed information about customers. With a PWA, you can see how your customers interact with your website from the moment they install it.

After they pin the PWA site to their home screen, you can keep sending them information about the latest products and services with instant pop-ups. These offers are delivered on the basis of the pages the customer has visited, the number and duration of each session, and their location.

In short, you can refine leads much more easily and directly with PWAs than with traditional websites or native apps. Your sales and marketing teams can utilize the information to target your audience better, so you’ll enjoy lower Cost of User Acquisition (CAC) and higher marketing ROI.

Enhance customer experience to improve conversion rates

Google mentioned 3 key factors of PWA that can improve customer experience and reduce bounce rates on your website:

Reliable: Load immediately and never display the dinosaur jumping through the desert, even in unstable internet connection

Fast: Respond instantly to customer interactions with smooth moving images and no complicated scrolling required

Engaging: Feels like a native app with a rich UI/UX on all devices, equally in desktop, tablets, and mobile

All of the above benefits lead to higher levels of customer engagement and overall performance, increasing conversion rate and revenue growth.

Offer more affordable alternatives solution to native apps

PWAs vs native apps? Both of them deliver great customer experience on mobile with different strengths and weaknesses. Retails can use native apps to engage their loyal customers who are willing to install them, but PWAs makes it easier to reach new customers. Depending on the selection factors and priorities, you can judge which is the better choice.

PWA wins the fields of:

Shorter development time

Smaller budget

Strong SEO profile following website best practices

Native apps win the fields of:

Credibility certified by App Store and Play Store

More security options

Advanced mobile features

You can read more details from the developer’s perspective and the user’s perspective in our article PWA vs Native App.

Successful PWA case studies in retails

Now you may be wondering if any companies have succeeded in implementing PWA, and how effective is it? The answer is “Yes”. They are familiar brands that you may have visited and purchased some products from their PWA sites. Let’s take a look at 5 interesting examples of PWA in retail and how they improve their bottom line.

Starbucks

Industry: Retail coffee and snacks store. PWA launching time: 2015. Business requirements:

Provide customers with faster and responsive performance than the previous apps

Allow customers to access the nutrition information, browse the menu, and customize their orders without network. This is very subtle considering the cases where Starbucks customers take the subway in the morning and often lose their internet connection in the middle of ordering.

Solution: Starbucks built an app-like PWA website with smoothly animated images and the ability to work offline.

Efficient results: Starbucks reported:

A 2x increase in their daily active users

A huge data storage saving by 99.84% (the PWA needs only 233 KB while the previous app requires 148 MB)

AliExpress

Industry: An one-stop website to shop everything from refrigerators to baby clothes in China.

PWA launching time: 2016.

Business requirements:

Build a compelling website experience like their previous mobile app, but provide a faster loading speed

Not require customers to download and install to start interacting with them

Solution: AliExpress combines the best features of their app to build the new PWA site with a wide reach. As a result, they delight their customers with PWA’s benefits such as offline working and productivity.

Efficient results: With their new PWA, AliExpress registered:

43% more sessions per user

20% increase in ad viewability

Triple scroll depth

Lancôme

Industry: Luxury cosmetics.

PWA launching time: 2016.

Business requirements:

Drives more traffic and sales

Increase conversion rate, which was only 15% in 2015

Allow customers to search and purchase products more easily on mobile

Solution: Their PWA works as a fast app-like solution for more mobile-friendly and also right user experience (UX) on all kinds of devices. Its performance is stable on a weak internet connection and provides push notifications that engage customers.

Efficient results: Lancôme’s new PWA achieved:

18% open push notifications

8% of customers tapping on a push notification and purchase

More than 50% rise in the number of mobile sessions

15% decrease in bounce rate

51% increase in mobile sessions

17% increase in conversions rate

Flipkart

Industry: The largest eCommerce store in India.

PWA launching time: 2016.

Business requirements: Optimize loading speed because most of the mobile users in India use 2G network to access the site.

Solution: PWA’s add to home screen, offline mode, and fast loading feature are incredibly valuable here.

Efficient results: Flipkart Lite that plays an important role in boosting their revenue:

3x more spending time on site (3.5 minutes for the new PWA vs. 70 seconds for the old website)

40% higher engagement rate

70% increase in rate conversions

3x lower data usage

George.com

Industry: A leading UK clothing brand, part of Walmart.

PWA launching time: 2018.

Business requirements:

Revamp the outdated mobile website

Improve the offer for customers

Solution: George.com adopt a mobile-first approach, focusing on speed, design, and functionality to increase mobile conversions.

Efficient results: After transforming to a PWA site, George.com gained:

31% increase in mobile conversion

3.8x faster page loading time

2x lower bounce rate

31% increase in conversion rate

20% more page views per visit

28% longer time on site for “Add to Home Screen” prompt

There are many other success stories of PWA that you can find via the website PWA Stats indicating its benefits from a business point of view.

Conclusion

PWAs are the latest trend in the digital world and can replace native apps in many situations. They are extremely fast and use only a single codebase across platforms, making their coverage broad and diverse with every set of customers.

Offline capacity, short loading times, native-like UX, push notifications, icon on the homepage, and offline access make PWA increase engagement and boost customer experience on mobile.

PWAs are a direct answer to the needs of mobile customers and enable businesses to increase mobile conversion rate. Investment in PWA can result in significant measurable benefits. With a PWA Storefront, you can develop an app and a web page at the same time with a shorter time-to-market and lower costs. So, let’s try and keep up with this technology in 2021!

The post What is PWA & its benefits for retailers appeared first on World’s #1 POS for Magento.

This post was first published here.

We trust you found the article above of help or of interest. You can find similar content on our main site here: northtxpointofsale.com Let me have your feedback in the comments section below. Let us know what subjects we should write about for you in the future.

[afriendlypokealien]

News reports & helpful tips on POS System Equipment & POS.

If you have just migrated to a Magento 2 website and haven’t got a mobile version of your website yet, the most concerning question to you is probably “How to optimize my website for mobile devices?”

The simplest and fastest way is to build a progressive web app (PWA), which meets mobile-first standards and has an app-like interface. In case your Magento version is 2.3.x and above, you’ve already had free access to PWA Studio, Magento’s full set of tools to build PWA for your website. However, this article won’t go into technical details. Instead, we’ll help you understand the definition and importance of PWA from a business perspective.

What is PWA?

PWA features

PWA benefits from a business perspective

Successful PWA examples in retail

What is PWA?

Progressive Web Application (PWA) is a web standard that uses design patterns and advanced technologies to deliver a fast and reliable experience to users on both mobile and desktop devices. It can work on any platform using standard-compliant browsers with the aims to:

Increase customer engagement

Boost conversion rates

Diversify revenue streams

Bonus facts:

In 2015, the term PWA was coined by a designer and a Chrome developer as a “deep shift in our understanding and tools” to “build better experiences across devices and contexts within a single codebase”. Then, it was quickly adapted and developed by Google, Windows, and Apple.

However, the initial idea of a PWA didn’t come not from any of the named software providers. It was Steve Jobs who invented and presented it during the annual iPhone launch in 2007.

PWA features

Simply put, PWA provides a website with the characteristics of a native app and beyond.

App-like interface

Customers tend to have expectations for native apps experience when using mobile devices to browse websites. Therefore, the website interface should be designed to accommodate seamless and fast interactions. This is where PWA’s design strengths come to the fore.

Full responsiveness

PWA sites provide a consistent experience through all kinds of devices, including tablet, mobile, and desktop.

Cross-browser compatibility

Most of your customers usually visit your website first. PWA has a consistently high performance on popular browsers such as Chrome, Safari, and Firefox. Therefore, it has the widest reach to any customer segmentation.

Easy installation and add to home screen

Convincing users to install an app is challenging and very expensive for businesses. Most mobile users have chosen their favorite sets of applications. While they value the mobile experience of native apps, customers are not willing to download and install new apps. PWA avoids the middleman step of searching in app stores, requiring no download or installation:

Customers can surf PWA websites on any browser.

On the first access, the browser will display a prompt to remind customers to add it to the home screen.

Regarding the fact that customers prefer tapping app icons to access their favorites rather than navigating to a website using a browser, PWA’s add to home screen feature is valuable in this situation.

Offline mode or connectivity independent

Thanks to its Service Workers technology, PWA can work offline.

When your customers first visit your website, your site’s content will be cached. Customers can continue to interact without interruption, even if they lose their network connection.

On the next visit, your device will reload the saved content without the internet, making the page browsing speed very fast.

Self-updates

The Service Worker update process keeps the PWA site updated automatically and continuously. You don’t need to submit your updates to the App Store or Play Store and wait for review before releasing a new version.

Mobile perks

PWA has the ability to access the home screen and send real-time alerts and push notifications to engage customers, even when the application isn’t running.

Performance optimization

PWAs use less data than native apps and load content fast. With faster loading times, PWAs reduce server load and minimize the risk of slowdowns or crashes during high-traffic times, like major year-end sales.

Security

HTTPS connections of PWA are the highest level of security, served via TLS to block snooping.

Shareable content

With one PWA’s unique URL link, you can share it for others to access on any platform via social media or other apps.

SEO-friendliness

PWA sites can be indexed by Googlebot so you can optimize them based on Google’s guidelines and best practices.

PWA benefits from a business perspective

In turn, PWA brings outstanding advantages for businesses:

Increase organic search traffic to capture new sales

One of the hardest tasks on the planet is to make customers know that your store exists. According to a recent survey, more than nearly 60% of search queries come from mobile devices. As a result, Google has shifted its priority to returning results for mobile-first websites.

In that situation, it’s best to help your business get more mobile traffic with mobile-friendly features. PWA can increase the ranking of websites by much faster page load times and consuming less device memory and network data.

Boost brand awareness to engage more with customers

Large businesses and brands have taken up most of the number of apps on customers’ screens. With the add-to-home-screen feature, PWA sites open the opportunity for small and medium businesses to put their brand on the home screen of more users. This ensures brand visibility and enhances the top position.

When using PWA, SMEs can expect much higher customer engagement. Customers add your PWA site after they’re sure your site has everything they need. This brings you one step closer to your customers. When the PWA is placed in their home screen, it’s easy for customers to see and remember your store as soon as they unlock their device. Specifically, user sessions on PWA sites are 78.25% longer than websites and apps.

Remarketing leads to get more returning customers

Businesses often find it difficult to capture accurate and detailed information about customers. With a PWA, you can see how your customers interact with your website from the moment they install it.

After they pin the PWA site to their home screen, you can keep sending them information about the latest products and services with instant pop-ups. These offers are delivered on the basis of the pages the customer has visited, the number and duration of each session, and their location.

In short, you can refine leads much more easily and directly with PWAs than with traditional websites or native apps. Your sales and marketing teams can utilize the information to target your audience better, so you’ll enjoy lower Cost of User Acquisition (CAC) and higher marketing ROI.

Enhance customer experience to improve conversion rates

Google mentioned 3 key factors of PWA that can improve customer experience and reduce bounce rates on your website:

Reliable: Load immediately and never display the dinosaur jumping through the desert, even in unstable internet connection

Fast: Respond instantly to customer interactions with smooth moving images and no complicated scrolling required

Engaging: Feels like a native app with a rich UI/UX on all devices, equally in desktop, tablets, and mobile

All of the above benefits lead to higher levels of customer engagement and overall performance, increasing conversion rate and revenue growth.

Offer more affordable alternatives solution to native apps

PWAs vs native apps? Both of them deliver great customer experience on mobile with different strengths and weaknesses. Retails can use native apps to engage their loyal customers who are willing to install them, but PWAs makes it easier to reach new customers. Depending on the selection factors and priorities, you can judge which is the better choice.

PWA wins the fields of:

Shorter development time

Smaller budget

Strong SEO profile following website best practices

Native apps win the fields of:

Credibility certified by App Store and Play Store

More security options

Advanced mobile features

You can read more details from the developer’s perspective and the user’s perspective in our article PWA vs Native App.

Successful PWA case studies in retails

Now you may be wondering if any companies have succeeded in implementing PWA, and how effective is it? The answer is “Yes”. They are familiar brands that you may have visited and purchased some products from their PWA sites. Let’s take a look at 5 interesting examples of PWA in retail and how they improve their bottom line.

Starbucks

Industry: Retail coffee and snacks store. PWA launching time: 2015. Business requirements:

Provide customers with faster and responsive performance than the previous apps

Allow customers to access the nutrition information, browse the menu, and customize their orders without network. This is very subtle considering the cases where Starbucks customers take the subway in the morning and often lose their internet connection in the middle of ordering.

Solution: Starbucks built an app-like PWA website with smoothly animated images and the ability to work offline.

Efficient results: Starbucks reported:

A 2x increase in their daily active users

A huge data storage saving by 99.84% (the PWA needs only 233 KB while the previous app requires 148 MB)

AliExpress

Industry: An one-stop website to shop everything from refrigerators to baby clothes in China.

PWA launching time: 2016.

Business requirements:

Build a compelling website experience like their previous mobile app, but provide a faster loading speed

Not require customers to download and install to start interacting with them

Solution: AliExpress combines the best features of their app to build the new PWA site with a wide reach. As a result, they delight their customers with PWA’s benefits such as offline working and productivity.

Efficient results: With their new PWA, AliExpress registered:

43% more sessions per user

20% increase in ad viewability

Triple scroll depth

Lancôme

Industry: Luxury cosmetics.

PWA launching time: 2016.

Business requirements:

Drives more traffic and sales

Increase conversion rate, which was only 15% in 2015

Allow customers to search and purchase products more easily on mobile

Solution: Their PWA works as a fast app-like solution for more mobile-friendly and also right user experience (UX) on all kinds of devices. Its performance is stable on a weak internet connection and provides push notifications that engage customers.

Efficient results: Lancôme’s new PWA achieved:

18% open push notifications

8% of customers tapping on a push notification and purchase

More than 50% rise in the number of mobile sessions

15% decrease in bounce rate

51% increase in mobile sessions

17% increase in conversions rate

Flipkart

Industry: The largest eCommerce store in India.

PWA launching time: 2016.

Business requirements: Optimize loading speed because most of the mobile users in India use 2G network to access the site.

Solution: PWA’s add to home screen, offline mode, and fast loading feature are incredibly valuable here.

Efficient results: Flipkart Lite that plays an important role in boosting their revenue:

3x more spending time on site (3.5 minutes for the new PWA vs. 70 seconds for the old website)

40% higher engagement rate

70% increase in rate conversions

3x lower data usage

George.com

Industry: A leading UK clothing brand, part of Walmart.

PWA launching time: 2018.

Business requirements:

Revamp the outdated mobile website

Improve the offer for customers

Solution: George.com adopt a mobile-first approach, focusing on speed, design, and functionality to increase mobile conversions.

Efficient results: After transforming to a PWA site, George.com gained:

31% increase in mobile conversion

3.8x faster page loading time

2x lower bounce rate

31% increase in conversion rate

20% more page views per visit

28% longer time on site for “Add to Home Screen” prompt

There are many other success stories of PWA that you can find via the website PWA Stats indicating its benefits from a business point of view.

Conclusion

PWAs are the latest trend in the digital world and can replace native apps in many situations. They are extremely fast and use only a single codebase across platforms, making their coverage broad and diverse with every set of customers.

Offline capacity, short loading times, native-like UX, push notifications, icon on the homepage, and offline access make PWA increase engagement and boost customer experience on mobile.

PWAs are a direct answer to the needs of mobile customers and enable businesses to increase mobile conversion rate. Investment in PWA can result in significant measurable benefits. With a PWA Storefront, you can develop an app and a web page at the same time with a shorter time-to-market and lower costs. So, let’s try and keep up with this technology in 2021!

The post What is PWA & its benefits for retailers appeared first on World’s #1 POS for Magento.

This post was first published here.

We trust you found the article above of help or of interest. You can find similar content on our main site here: northtxpointofsale.com Let me have your feedback in the comments section below. Let us know what subjects we should write about for you in the future.

[anagamitofotografia]

News reports & helpful tips on POS System Equipment & POS.

If you have just migrated to a Magento 2 website and haven’t got a mobile version of your website yet, the most concerning question to you is probably “How to optimize my website for mobile devices?”

The simplest and fastest way is to build a progressive web app (PWA), which meets mobile-first standards and has an app-like interface. In case your Magento version is 2.3.x and above, you’ve already had free access to PWA Studio, Magento’s full set of tools to build PWA for your website. However, this article won’t go into technical details. Instead, we’ll help you understand the definition and importance of PWA from a business perspective.

What is PWA?

PWA features

PWA benefits from a business perspective

Successful PWA examples in retail

What is PWA?

Progressive Web Application (PWA) is a web standard that uses design patterns and advanced technologies to deliver a fast and reliable experience to users on both mobile and desktop devices. It can work on any platform using standard-compliant browsers with the aims to:

Increase customer engagement

Boost conversion rates

Diversify revenue streams

Bonus facts:

In 2015, the term PWA was coined by a designer and a Chrome developer as a “deep shift in our understanding and tools” to “build better experiences across devices and contexts within a single codebase”. Then, it was quickly adapted and developed by Google, Windows, and Apple.

However, the initial idea of a PWA didn’t come not from any of the named software providers. It was Steve Jobs who invented and presented it during the annual iPhone launch in 2007.

PWA features

Simply put, PWA provides a website with the characteristics of a native app and beyond.

App-like interface

Customers tend to have expectations for native apps experience when using mobile devices to browse websites. Therefore, the website interface should be designed to accommodate seamless and fast interactions. This is where PWA’s design strengths come to the fore.

Full responsiveness

PWA sites provide a consistent experience through all kinds of devices, including tablet, mobile, and desktop.

Cross-browser compatibility

Most of your customers usually visit your website first. PWA has a consistently high performance on popular browsers such as Chrome, Safari, and Firefox. Therefore, it has the widest reach to any customer segmentation.

Easy installation and add to home screen

Convincing users to install an app is challenging and very expensive for businesses. Most mobile users have chosen their favorite sets of applications. While they value the mobile experience of native apps, customers are not willing to download and install new apps. PWA avoids the middleman step of searching in app stores, requiring no download or installation:

Customers can surf PWA websites on any browser.

On the first access, the browser will display a prompt to remind customers to add it to the home screen.

Regarding the fact that customers prefer tapping app icons to access their favorites rather than navigating to a website using a browser, PWA’s add to home screen feature is valuable in this situation.

Offline mode or connectivity independent

Thanks to its Service Workers technology, PWA can work offline.

When your customers first visit your website, your site’s content will be cached. Customers can continue to interact without interruption, even if they lose their network connection.

On the next visit, your device will reload the saved content without the internet, making the page browsing speed very fast.

Self-updates

The Service Worker update process keeps the PWA site updated automatically and continuously. You don’t need to submit your updates to the App Store or Play Store and wait for review before releasing a new version.

Mobile perks

PWA has the ability to access the home screen and send real-time alerts and push notifications to engage customers, even when the application isn’t running.

Performance optimization

PWAs use less data than native apps and load content fast. With faster loading times, PWAs reduce server load and minimize the risk of slowdowns or crashes during high-traffic times, like major year-end sales.

Security

HTTPS connections of PWA are the highest level of security, served via TLS to block snooping.

Shareable content

With one PWA’s unique URL link, you can share it for others to access on any platform via social media or other apps.

SEO-friendliness

PWA sites can be indexed by Googlebot so you can optimize them based on Google’s guidelines and best practices.

PWA benefits from a business perspective

In turn, PWA brings outstanding advantages for businesses:

Increase organic search traffic to capture new sales

One of the hardest tasks on the planet is to make customers know that your store exists. According to a recent survey, more than nearly 60% of search queries come from mobile devices. As a result, Google has shifted its priority to returning results for mobile-first websites.

In that situation, it’s best to help your business get more mobile traffic with mobile-friendly features. PWA can increase the ranking of websites by much faster page load times and consuming less device memory and network data.

Boost brand awareness to engage more with customers

Large businesses and brands have taken up most of the number of apps on customers’ screens. With the add-to-home-screen feature, PWA sites open the opportunity for small and medium businesses to put their brand on the home screen of more users. This ensures brand visibility and enhances the top position.

When using PWA, SMEs can expect much higher customer engagement. Customers add your PWA site after they’re sure your site has everything they need. This brings you one step closer to your customers. When the PWA is placed in their home screen, it’s easy for customers to see and remember your store as soon as they unlock their device. Specifically, user sessions on PWA sites are 78.25% longer than websites and apps.

Remarketing leads to get more returning customers

Businesses often find it difficult to capture accurate and detailed information about customers. With a PWA, you can see how your customers interact with your website from the moment they install it.

After they pin the PWA site to their home screen, you can keep sending them information about the latest products and services with instant pop-ups. These offers are delivered on the basis of the pages the customer has visited, the number and duration of each session, and their location.

In short, you can refine leads much more easily and directly with PWAs than with traditional websites or native apps. Your sales and marketing teams can utilize the information to target your audience better, so you’ll enjoy lower Cost of User Acquisition (CAC) and higher marketing ROI.

Enhance customer experience to improve conversion rates

Google mentioned 3 key factors of PWA that can improve customer experience and reduce bounce rates on your website:

Reliable: Load immediately and never display the dinosaur jumping through the desert, even in unstable internet connection

Fast: Respond instantly to customer interactions with smooth moving images and no complicated scrolling required

Engaging: Feels like a native app with a rich UI/UX on all devices, equally in desktop, tablets, and mobile

All of the above benefits lead to higher levels of customer engagement and overall performance, increasing conversion rate and revenue growth.

Offer more affordable alternatives solution to native apps

PWAs vs native apps? Both of them deliver great customer experience on mobile with different strengths and weaknesses. Retails can use native apps to engage their loyal customers who are willing to install them, but PWAs makes it easier to reach new customers. Depending on the selection factors and priorities, you can judge which is the better choice.

PWA wins the fields of:

Shorter development time

Smaller budget

Strong SEO profile following website best practices

Native apps win the fields of:

Credibility certified by App Store and Play Store

More security options

Advanced mobile features

You can read more details from the developer’s perspective and the user’s perspective in our article PWA vs Native App.

Successful PWA case studies in retails

Now you may be wondering if any companies have succeeded in implementing PWA, and how effective is it? The answer is “Yes”. They are familiar brands that you may have visited and purchased some products from their PWA sites. Let’s take a look at 5 interesting examples of PWA in retail and how they improve their bottom line.

Starbucks

Industry: Retail coffee and snacks store. PWA launching time: 2015. Business requirements:

Provide customers with faster and responsive performance than the previous apps

Allow customers to access the nutrition information, browse the menu, and customize their orders without network. This is very subtle considering the cases where Starbucks customers take the subway in the morning and often lose their internet connection in the middle of ordering.

Solution: Starbucks built an app-like PWA website with smoothly animated images and the ability to work offline.

Efficient results: Starbucks reported:

A 2x increase in their daily active users

A huge data storage saving by 99.84% (the PWA needs only 233 KB while the previous app requires 148 MB)

AliExpress

Industry: An one-stop website to shop everything from refrigerators to baby clothes in China.

PWA launching time: 2016.

Business requirements:

Build a compelling website experience like their previous mobile app, but provide a faster loading speed

Not require customers to download and install to start interacting with them

Solution: AliExpress combines the best features of their app to build the new PWA site with a wide reach. As a result, they delight their customers with PWA’s benefits such as offline working and productivity.

Efficient results: With their new PWA, AliExpress registered:

43% more sessions per user

20% increase in ad viewability

Triple scroll depth

Lancôme

Industry: Luxury cosmetics.

PWA launching time: 2016.

Business requirements:

Drives more traffic and sales

Increase conversion rate, which was only 15% in 2015

Allow customers to search and purchase products more easily on mobile

Solution: Their PWA works as a fast app-like solution for more mobile-friendly and also right user experience (UX) on all kinds of devices. Its performance is stable on a weak internet connection and provides push notifications that engage customers.

Efficient results: Lancôme’s new PWA achieved:

18% open push notifications

8% of customers tapping on a push notification and purchase

More than 50% rise in the number of mobile sessions

15% decrease in bounce rate

51% increase in mobile sessions

17% increase in conversions rate

Flipkart

Industry: The largest eCommerce store in India.

PWA launching time: 2016.

Business requirements: Optimize loading speed because most of the mobile users in India use 2G network to access the site.

Solution: PWA’s add to home screen, offline mode, and fast loading feature are incredibly valuable here.

Efficient results: Flipkart Lite that plays an important role in boosting their revenue:

3x more spending time on site (3.5 minutes for the new PWA vs. 70 seconds for the old website)

40% higher engagement rate

70% increase in rate conversions

3x lower data usage

George.com

Industry: A leading UK clothing brand, part of Walmart.

PWA launching time: 2018.

Business requirements:

Revamp the outdated mobile website

Improve the offer for customers

Solution: George.com adopt a mobile-first approach, focusing on speed, design, and functionality to increase mobile conversions.

Efficient results: After transforming to a PWA site, George.com gained:

31% increase in mobile conversion

3.8x faster page loading time

2x lower bounce rate

31% increase in conversion rate

20% more page views per visit

28% longer time on site for “Add to Home Screen” prompt

There are many other success stories of PWA that you can find via the website PWA Stats indicating its benefits from a business point of view.

Conclusion

PWAs are the latest trend in the digital world and can replace native apps in many situations. They are extremely fast and use only a single codebase across platforms, making their coverage broad and diverse with every set of customers.

Offline capacity, short loading times, native-like UX, push notifications, icon on the homepage, and offline access make PWA increase engagement and boost customer experience on mobile.

PWAs are a direct answer to the needs of mobile customers and enable businesses to increase mobile conversion rate. Investment in PWA can result in significant measurable benefits. With a PWA Storefront, you can develop an app and a web page at the same time with a shorter time-to-market and lower costs. So, let’s try and keep up with this technology in 2021!

The post What is PWA & its benefits for retailers appeared first on World’s #1 POS for Magento.

This post was first published here.

We trust you found the article above of help or of interest. You can find similar content on our main site here: northtxpointofsale.com Let me have your feedback in the comments section below. Let us know what subjects we should write about for you in the future.

[technologyblogs1211]

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10 reasons why your eCommerce business needs an AI chatbot The ever-increasing expectations of the customers can be met with the implementation of an artificial intelligent chatbot in e-commerce websites…….

6 ways to slash your Customer Acquisition Cost Learn how to calculate your customer acquisition cost (CAC) and explore six powerful ways to optimize it with the help of chatbots and live chat. Read now!

Apple’s and Amazon’s secret to success: Customer effort score Ever wonder what makes Apple and Amazon so insanely successful? Reducing the customer effort score is always the focus & that’s what drives these big giants

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[jamesyzeitz]

Keep Your Customer Acquisition Cost in Check to Maximize Earnings

Hooking new customers is an expensive pain point for many businesses. Your new customer acquisition cost (CAC) can be anywhere from five – 25 times as expensive as hanging onto your current buyers.

How much are you dishing out on marketing to potential customers? Is all that spending paying off?

To measure your efforts, you need to answer what is CAC, compare your rate to other businesses, know how to calculate customer acquisition cost, and reduce your rate if necessary.

What is customer acquisition cost?

Customer acquisition cost is how much a business spends marketing to and acquiring each new customer. Your CAC includes the money you devote to sourcing leads and turning them into customers.

Generally, your customer acquisition cost will be made up of three components:

Marketing

Discounts offered

Salaries

To determine how much customer acquisition costs you, add up your advertising expenses, losses from offering discounts, and how much you pay employees in marketing, sales, or similar positions.

Customer acquisition cost by industry

The average customer acquisition cost varies by industry. Here are a few examples of customer acquisition cost by industry, according to one source:

Travel industry: $7 per customer

Telecom industry: $315 per customer

Retail industry: $10 per customer

Financial industry: $175 per customer

In addition to industry, your marketing strategy, allocation of resources, and ability to cut unnecessary expenses also determine your customer acquisition cost.

To determine whether your CAC is too high or too low, you can also look beyond industry comparisons. Compare how much you spend on customers to how much you predict they will spend at your small business, known as the customer lifetime value (CLV).

How to calculate customer acquisition cost

So, how do you figure out what new customer acquisition costs your small business? You need to learn how to calculate your small business’s CAC.

Use the following customer acquisition cost formula to calculate the expense:

To calculate your business’s CAC, choose a period, such as a month, quarter, or year. Then, add up your costs associated with acquiring new customers during the period. Divide your cost by the total number of new customers you acquired in the period.

Example of calculating CAC

Let’s say you want to calculate your customer acquisition cost for the quarter. During the quarter, you spent $5,000 on related employee salaries, $100 on an email marketing program, and $4,000 on social media ads. Add up these expenses to reach your total costs.

For the quarter, your total costs devoted to acquiring new customers were $9,100. And, you acquired 200 new customers.

Customer Acquisition Cost = $9,100 / 200

Customer Acquisition Cost = $45.50

During the quarter, you spent $45.50 acquiring each new customer. Depending on your industry and the average price of your goods or services, this CAC might be considered high or low.

How to reduce the cost of acquiring new customers

If you want to increase net profit (and who doesn’t?), you need to keep your cost of acquiring new customers low. To reduce your business’s CAC, improve your current customer acquisition strategy.

Take a look at these three ways you can lower your cost of acquiring new customers.

Measure your customer acquisition cost

You will have no way of knowing whether your customer acquisition cost is good or bad if you don’t measure it. And, you need to go further than measuring it once. Create a document (e.g., spreadsheet) that lists your customer acquisition cost per period.

Compare your CAC between periods to measure your efforts and improve your strategy. To come up with a killer customer acquisition strategy that keeps your costs low, don’t be afraid to experiment.

Find alternatives

Acquiring new customers doesn’t have to be an expensive process. You can find less costly advertising alternatives that result in new customers.

Consider using customer cost saving ideas for the workplace, such as social media, email marketing, small business blog, and a refer-a-friend program.

Cut costs

If one method of acquiring customers has subpar results, cut it. Every business is different, and if one marketing strategy doesn’t work for you, focus on the ones that do.

You can try to determine how many new customers come from each marketing channel. For example, find your customer acquisition cost for LinkedIn and Facebook advertisements. If your customer acquisition cost is high for one of them, cut it.

Want to organize and track your expenses? Patriot’s online accounting software can help. Easily manage your incoming and outgoing money, get access to free support, and more. Try it for free today!

This is not intended as legal advice; for more information, please click here.

The post Keep Your Customer Acquisition Cost in Check to Maximize Earnings appeared first on Accounting Tips, Training, and News.

from Accounting Tips https://www.patriotsoftware.com/accounting/training/blog/what-is-customer-acquisition-cost/

[seo78580]

a16z Podcast: Why paid marketing sucks, Network effects, Viral Growth, and more

Dear readers, It was my pleasure to be on my first ever Andreessen Horowitz podcast! if you haven’t checked it out, you can subscribe here. I’ve linked to the Soundcloud and included a transcript below.

In the podcast, we cover a broad overview of growth/marketing topics, including:

The natural “gravity” that slows down high-growth businesses

What’s really happening beneath the surface of exponential growth curves

Organic, paid marketing, and LTV/CAC

Why blended CAC numbers are misleading

Why offline products are so compelling for acquiring customers

Cohort analysis and looking for “smile curves”

The Power User Curve aka L28

Why onboarding is so important for retention/churn

Phases of growth- why early companies focus on acquisition, but big companies focus on churn

High frequency versus episodic usage products

Why adding lots of spammy email notifications decreases your DAU/MAU

Network effects and why different products’ network effects are different from each other

Why Google measures many short sessions, versus other products focus on long sessions

Hope you enjoy it!

And thank you to my colleagues Sonal and Jeff for making this happen :)

Andrew Palo Alto, CA

Part 1: User Acquisition

Hi everyone welcome to the a16z Podcast, I’m Sonal. Today’s episode is all about growth, one of the most top of mind questions for entrepreneurs — of all kinds of startups, and especially for consumer ones.

So joining to have this conversation, we have a16z general partners Andrew Chen and Jeff Jordan. And we cover everything from the basics of growth and defining key metrics to know, to the nuances of paid vs organic marketing and the role of network effects and more.

Part one of this conversation focuses specifically on the aspect of user acquisition for growth, and then we cut off and go into the aspects of growth for user engagement and retention, in the next episode. But first, we begin by going beyond the concept of growth hacks — and beginning with the fundamental premise that businesses do not grow themselves…

Sonal: So the topic we wanted to talk about today is growth, which is a big topic. What would you say are the biggest myths and misconceptions that entrepreneurs have about growth? Andrew: You know, not only is there the misconception that it happens magically, then the next layer I think is that it’s really just like, oh, a series of, you know, tips and tricks and growth hacks that kind of keep things going as opposed to like a really rigorous understanding of, you know, how to think about growth not just, as kind of the top line thing but actually that there’s acquisition, that there’s engagement, that there’s retention, and each one of those pieces is very different than the other and you have to like tackle them systematically.

Jeff: It is a scientific discipline, done right, because it requires you to understand your business and business dynamics at this incredibly micro level.   Sonal: I love that you said that because one of the complaints I’ve heard about “growth hacking” is that it’s just marketing by a different name, and what I’m really hearing you guys say is that there’s a systemic point of view, there’s rigor to it, there’s stages, there’s a program you build out.

Jeff: If you’re fortunate enough to achieve product-market fit and your business starts to take off, typically, you know, when in the wonderful situation do you get this hyper growth where you’ll grow year over year, you know, it’s triple digits. It’s just exploding. And then gradually the law of the large numbers starts to kick in and maybe the 100% growth becomes 50% growth the next year, and then the law of large numbers continue to kick in and there’s 25% and then it’s 12.5% and so growth tends to decay over time even in the best businesses. And so the–   Sonal: — Didn’t you use to call it like “gravity”?   Jeff: I called it gravity, you just would…it comes down to earth. And then the job of the entrepreneur is to be looking years down the road and say, “Okay, at some point growth in business A is going to stop and so I want to keep it going as long as I can and there’s a whole bunch of tactics to do that,” but then the other tactic, the other strategies, okay, I need new layers on the cake of growth.

At eBay the original business was an auction business in the U.S. and so, you know, some of the things we layered on early days we layered on fixed price in the U.S. — it’s not revolutionary but it really did grow then we went international. And then we layered in payment integration and each time we did that the total growth of the company would actually accelerate which is very hard to do at scale.   Sonal: That’s the whole point… like there’s intentionality to it. It’s not an accident that you guys introduce new businesses, new layers on the cake.

Jeff: Businesses don’t grow themselves, the entrepreneur has to grow them. And, you know, occasionally, you stumble into a business that seems to almost grow itself but they’re just aren’t many of those in the world and that growth almost never persists for long periods of time unless the entrepreneur can figure out how to continue its growth.   Sonal: Right. I remember a post you wrote actually a few years ago on “The ‘Oh, Shit Moment!’ When Growth Stops” because people are a little blindsided by it.   Jeff: And that’s the flip side of it. You know, early on you get this great growth, you had to keep it going. When it stops your strategic options had been constrained dramatically.

Andrew: A lot of times when you’re looking at what seemingly is an exponential growth curve. In fact, it’s really something like, oh, you’re opening in a bunch of new markets, right, so there’s sort of a linear line there, but then you’re also introducing products at the same time and you’re also reducing friction and, you know, sign-ups or retention or whatever, and so, the whole combination of those things is really kind of like a whole series of accelerating pieces that looks like it’s, you know, this amazing viral growth curve. But it’s actually like so much work underneath.  <Sonal: Right.> You know, that makes that happen. Sonal: I’ve also heard you [Andrew] talk about, being able to distinguish what is specifically driving that growth, so you don’t have this like sort of exponential-looking curve without knowing what that lever that you’re pulling to make that happen or knowing what’s happening even if it’s kind of happening naturally or organically. Can we break down some of the key metrics that are often used in these discussions including just what the definitions are and maybe just talk through how to think about them?   Andrew: Right. Yeah, so when you look at a large aggregate number like, you know, total monthly active users, right, or you’re looking at like —    Sonal: — “MAUs”   Andrew: –Yeah, MAUs, right. Or you’re looking at, you know, the GMV like all the…adding up all the transactions in your marketplace–

Sonal: — So, “gross merchandise value”. Andrew: Yup. And so, you know, when you look at something like that and if it’s going up or down, you don’t have the levers at that level to really understand like what’s really going on. You want to go a couple levels even deeper: How many new customers are you adding? As you’re growing more and more new customers, a bunch of things happen. If you’re using paid advertisement channels, things tend to get more expensive over time because — you know, your initially super, super excited core demographic of customers — like they’re gonna convert the best and as you start reaching into different geographies, different kinds of demos, all of a sudden they’re not gonna convert as well, right?

Sonal: Just to pause in that for a quick moment, you’re basically arguing that growth itself halts growth in that context. Andrew: Right. Yeah. So the law of large numbers means that you know there’s only a fixed number of humans on the planet, there’s only a fixed number of people that are in your core demographic, right? Once you surpass a certain point, it’s not like it’s it falls off a cliff, it’s just more gradual that you know that the customer behavior really changes.   Sonal: How do you determine what’s what when you don’t have product-market fit? Sometimes aren’t these metrics ways to figure that out or is this all when you have product-market fit… like is there a pre- and a post- difference between these?

Andrew: Very concretely, you want to understand how much of the acquisition is coming from purely organic (people discovering it, people talking to each other), as opposed to, oftentimes you’ll run into the companies that have over 50% of their acquisition coming from paid marketing and that tells you something that you’re, you know, needing to spend that much money to get people in the door.   Sonal: Yeah. So CAC, “customer acquisition cost”, that’s what you’re talking about when you talk about acquisition.

Jeff: CAC is what it cost to acquire a user, “blended CAC” is what it costs to acquire a user on a paid basis plus then also what free users you acquire. So if you’re acquiring half your users through paid marketing you’re paying a $100 to acquire a user but half of your users are coming at zero, paid CAC is 100, blended CAC is 50.

I think blended time is a really dangerous number. Most of the best businesses in the internet age of technology haven’t spent a ton on paid acquisition. And so the truly magical businesses, you know, a lot of them aren’t buying tons of users… Amazon’s key marketing right now is free shipping. And then, yeah, the economics of paid acquisition tend to degrade overtime.   Sonal: As it grows. Jeff: As it grows and you just try to scale it and, you know, largely you’re cherrypicking the best users and then you’re trying to also scale the number you get to grow. I need twice as many new users this year as last year and you typically pay more so that magical LTV to CAC ratio which early on says, “Oh, we are three to one, you know, in two years it’ll probably be one and a half to one if you’re lucky,” or something like that. So we typically do try to look for these other sources of acquisition be it viral, be it, you know, some other form of non paid <crosstalk>

Sonal: I want to quickly define LTV — it’s “lifetime value” of the customer, but what does that mean?   Jeff: When you’re showing an LTV to CAC ratio you have no idea of what you’re seeing essentially given all the potential variations of the numbers. So we will almost always go for clarity. LTV, lifetime value, should be the profits, the contribution from that user after all direct costs.

Sonal: How do we define the LTV to CAC ratio? What do the two of them in conjunction mean?   Jeff: Well, let’s break them down. LTV is lifetime value. What you’re describing there is the incremental profit contribution for a user over the projected life of that user. So not revenue per CAC is that you know typically there’s cost associated to user. What’s the incremental contribution that the user brought from that <crosstalk> <Sonal: And that you mean the user brought to your company’s value.> To the company, yeah. Sonal: So it’s a value of your customer to the bottom line?   Jeff: It’s the value of each customer to the bottom line, and then you compare that to the CAC or “cost of acquired customer” to understand the leverage you have between what I need to spend to acquire a customer and how much they’re worth. If your CAC is higher than your LTV you’re sunk. Because it’s costing you more to acquire a user… Sonal: Than the value you get out of it. Now I get it. Jeff: …then you’re going to get out of that user. Sonal: Yeah.   Jeff: If it’s the opposite, at least you’re in the game. You know, I get more profit out of the user than I get the cost to acquire that user. And then there’s this dynamics on how does it scale over time, CAC tends to go up, LTV tends to go down. Because you’re, on the CAC side, you’re acquiring the less interested users over time. So they cost more to acquire and they’re worth less, and so that the LTV to CAC ratio, in our experience, almost always degrades as over time with scale. And so, you know, when you’re in that conversation, you’re in a very specific conversation of, “Okay, how much room do you have?” “How is it gonna scale?” “You know, what’s gonna impact your CAC like a competitive thing?” So there has to be a lot, it had to be like 10 to kind of get you over that concern that oh, my goodness, those two were so close, that you have no margin for error. Sonal: Right. This also goes back to the big picture, the layers on the cake, because if you have other layers you don’t have to only worry about one layer CAC to LTV ratio.   Jeff: It really does affect the calculation. If it’s, I’m in a new business, and I have a whole different CAC versus, you know, LTV ratio then that’s a different conversation as well.

Sonal: And the big picture there, is that if you don’t know the difference of what’s doing what when you may get very mistaken signals, mixed signals about your business, and so you guys don’t want blended CAC because you want to know what’s driving the growth.

Andrew: I think what blended CAC gives you is it gives you a sense for at this particular moment in time, you know, what’s happening. The challenge is that when it comes to paid marketing, in particular, it’s easy to just add way more budget and a scale that than it is to scale organic or to scale SEO. So your CAC is giving you a snapshot, but then as you’re trying to scale the business you’re trying to increase everything by 100% over the next, you’re trying to double everything then all of a sudden, you know, your blended CAC starts to approach whatever your dominant channel actually looks like.   And so if you’re spending a bunch of money then it’ll just approach whatever is your paid marketing, you know, CAC. What entrepreneurs should think about is what is the unique organic new thing that’s gonna get it in front of people, without spending a bunch of money, right?

Jeff: A lot of the best businesses have this very interesting, I’ll call it a growth hack. I mean OpenTable, when I was managing it, did not pay any money at all to acquire consumers. Like how can you do that? You know, it had millions of consumers. The restaurants would mark it OpenTable on our behalf.   Sonal: Right. Jeff: They go to The Slanted Door website like when they were an OpenTable customer and you’d see, you’re looking…you go there to try to get the phone number to make a reservation and they’d say, “Oh, make an online reservation.” And we then got paid to acquire that user in its core form. But that hack was a wonderful thing. It scaled with the business and got us tons of free users.

Sonal: To be fair, and this is another definition we should tease apart really quickly before we move on to more metrics, that also had a quality of network effects which we’ve talked a lot about in terms of these things growing more valuable to more people that use it… is that growth? What’s the difference there?   Jeff: Well, the business grew into the network effect. The key tactic to build the network effect was that free acquisition of consumers that the more restaurants we had, the more attractive it was to consumers the more consumers who came, the more attractive it was to restaurants. So there is a wicked network effect. Sonal: Like a flywheel effect, right. Jeff: If you’re not spending anything on paid acquisition of consumers, how do you start it? And the placements that OpenTable got in the restaurant book both physically in the restaurant but particularly in the restaurant’s website was the key engine that got the network effect started. You had to manually sell some restaurants come for the tools, stay for the network, but then once the consumers got enough of a selection and started to use it, it was game over.   Sonal: Right, that was one way of going around the bootstrapping or the chicken-egg problem and seeding a network.

Andrew: Network effects have…there’s a lot of really positive things about them and one of the big pieces is that virality is a form of like something that you get with the network. You know, the larger your network is, the more surface area, the more opportunities you have in order to encounter it, right. And so, you know, in the case of Uber (where I was recently), by seeing all the cars with the Uber logo like those are all opportunities to be like, “Oh, what is this app? I should try it out.” And so it’s mutually reinforcing: then you get more riders and then you get more drivers that are into it and so, I think all of that kind of plays together.

Jeff: I’ll bring two examples up, the pink Lyft mustache when I first got to San Francisco.   Sonal: I remember that. Jeff: You can see it once in the car and you’d go, “Oh, that’s pretty weird.” You see it twice in the car and you say, “Something is going on here that I don’t know about, and I have to understand what it is.” Lime is the same kind of thing. Sonal: Right. Jeff: They’re bright green and they glow essentially. So when someone sees one in the wild, someone bolts by them in a glowing green electric scooter and you’re just like, “Okay…what is that?” And Lime hasn’t spent a penny on consumer acquisition. <Sonal: Right.> Because their model is such that physical cue in the real world leads to it.  

Andrew: The other one I’ll throw in as well is within workplace enterprise products there’s a lot of kind of bottoms-up virality that comes out of people, you know, kind of sharing and collaborating.   Sonal: Like with Slack. Andrew: Yeah, like for example Slack is a great, it’s an example of this. And so, these are all kind of really unique ways that you can, you know, get acquisition for free. And so then your CAC is, you know, “zero” as a result. Sonal: Yeah.

You guys have talked a lot, about organic. It makes it sound to me as a layperson that you don’t want paid marketing! Like what’s your views on this — is it a bad thing, is it a good thing; I don’t mean to moralize it but — help me unpack more where it’s helpful and where it’s not. Are they any rules-of-thumb to use there? Jeff: I mean a lot of great businesses that have leveraged paid marketing. The OTA sites (online travel agencies – Priceline and Expedia) just spends, you know, they spend a GDP of many large countries in their acquisition; and then it’s often a tactic in some good business. But if it’s your primary engine, a couple of things happen: One is it tends…the acquisition economics tend to degrade over time for the reason we’re saying…  <Sonal: Right this is…> And it leaves you wide open to competition. Sonal: It gets commoditized basically. Jeff: If you need to buy users, I mean if you’re selling, you know, the new breed of mattress and you need to buy users and early on, you’re the only person competing for that word, flas-hforward a year or two, they’re like six new age mattress manufacturers with virtually identical products competing for the same consumer. The economics are not going to persist over time. And so, you know, one of the key questions in businesses driven by heavy user acquisition is how does the play end? You know, it usually looks pretty good at the beginning of the play but in the middle it’s starts getting a little complex and there’s tragedies at the ends.   Sonal: There’s literally an arc.

Andrew: And I think, you know, if it is something that you’re using in conjunction with a bunch of other channels and you’re kind of accelerating things, that can be great. For example when Facebook in the past broke into new markets they started with paid marketing to get it going. And so in a case like that really paid marketing is a tactic to kind of get a network affect jumpstarted right? <Sonal: Gotcha.> And then you can kind of like pull off from that if you’d like. <Sonal: Right.> Andrew: But if you’re super, super dependent on it and you don’t have a plan for a world that you know all the channels atregonna degrade [in] then you’re gonna be in a tough spot in a couple of years.   Sonal: Totally. Do you have sort of a heuristic for when to stop the paid? Is there like a tipping point, you know, THIS is when you move?

Andrew: I think in terms of how much paid should you do as part of your portfolio, I think that’s the right way to think of it is it’s one out of a bunch of different channels, right? And so I would argue the following: First is you really have to measure the CAC and the LTV and be super disciplined about not spending ahead of where you want it to be and not to do it on some, you know, blended number that doesn’t make any sense. <Sonal: Right.> And then I think the other part is you really want it to be kind of a small enough minority of your channels. Such that if you were to get to a point where it turns out to be capped that you’re okay, that you can live with that.   Sonal: Your business will survive and you continue to grow and be healthy.   Andrew: Right, exactly, and you can still get the growth rates you want and you can still, you have such strong product-market fit that you’re able to maintain that. Jeff: Take a couple of sector examples. You know, ecommerce, a lot of companies..

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