Improved customer acquisition cost with Shopware

Getting new customers and keeping them is an adventure best spent with trusty tools by your side. Customer retention is a long process, and it takes a combined variety of effort and cost. Online customers are digitally-savvy folk whose daily environment is predominately digital. Getting them on your side means getting on their level first, and practice shows that customer expectations are moving on par with technology standards.

Customer expectations are not what they used to be.

Getting new clients nowadays often resembles a battle between seemingly equal competitors. One tiny advantage can win customers and make your competitors looking for a way to catch up. In a nearly hostile environment like the current online market scene, equilibrium can easily be broken down. Big players may step away – at least temporarily— and give room to newcomers, who managed to gain the trust and loyalty of their clients. Does the client prefer the traditional over the innovation?

What is the Customer Acquisition Cost (CAC)?

Customer acquisition cost (CAC) is a very complex variable – it is tough to calculate and predict. But one thing is for sure: the total amount of CAC has an ever-increasing value, and it steadily goes up every year. CFOs are crunching numbers, always on the look for ways to cut costs and increase revenue. But customer acquisition is not about making people buy the product. The total amount of investment thrown into the CAC mix justifies the investment. For well-recognized brands, any improvement in the overall shopping experience is a major achievement. When big companies fail to sustain product value, not even the brand as a quality guardian can restore the damage. We believe customer acquisition is detrimental to success in business.

First Time vs Return Visitor Revenue

CAC is considered by some experts to be more important than customer retention. With new players entering the eCommerce scene every day, established companies are forced to invest even more in strategies and convince their followers not to get distracted by the conditions of their direct competitors. The heightened competition has practically devalued the power of online advertising, which, in turn, has also become more expensive.

Because of the receding profit margins involved in ad campaigns, advertising cost goes up while its effectiveness goes down. This negative correlation has made companies more careful when planning advertising budgets, and most of them are now on a constant look for alternatives.

Better Customer Journey Reduces CAC

A traditional shopping process involves customers gradually recognizing and getting themselves familiar with the brand. Customers then start to consider one product over another. This process cycle concludes with the finalized purchase. This point in time is where customer loyalty is born, but the process is backbreaking to manage and usually requires the undivided attention of a team of specialists.

Industry leaders are continually setting standards that their rivals must seriously consider to even stay relevant in the business. For example, pizza delivery can be tracked with an app; why can’t my car repair shop track the progress of my vehicle maintenance? It’s the technological expertise that makes the difference between having the tech and knowing how to maximize its potential.

Content journey, along with SEO, is one of the best ways to cut costs by approaching and retaining the right customers. When people get new information through their favorite channels, magic happens. Content and commerce can be merged to produce one of the most effective strategies nowadays for successful product promotion and customer retainment. Online buyers appreciate the convenience of social media and companies that learn to use them as a delivery medium for commerce.

eCommerce through social channels is a smooth digital ride if providers manage to present their product in a seamless and non-invasive way. Aggressive product placement strategies are usually not the best move on socials. Plus, providers advertising successfully on social channels have a good chance of leveraging the loyalty factor. Making new clients is great, but building a happy client base is priceless.

Some companies have content strategies in place, but they fail to interpret customer’s reaction accurately. For example, a company may have a product with heightened attention. Still, the marketing team might not detect that what brought the customers was a YouTube video published earlier. Shopware’s headless CMS is excellent for setting up and monitoring traffic and extracting meaningful insights about customer behaviour and trends. So you can trace what made that initial spark and plan your next move.

When customers pull away, it is considered a bad sign in E-commerce. This accident could happen for several reasons, one being the difference in design and layout between various eCommerce components. For example, some payment gateway pages come furnished with specific design, hardcoded, and resistant to visual changes. With regular CMS, developers are struggling when their task is to universalize the website’s look across all pages. We think these dark days are over. Enter Shopware.

Shopware’s Headless Commerce for a flawless digital experience

Marketing strategies that employ measures for reduced CAC understand the need for fluent eCommerce experience. The traditional approach to eCommerce by established companies uses the brand as a focus point. For big brands, content management is low in priority, but at the same time, not a prominent factor in creating a great shopping experience. We think regardless of background or exposure – content marketing is here to stay and does help visitors turn into valued customers., especially with start-up businesses.

Successful eCommerce websites put customer satisfaction at the core of their primary strategy. The idea is saturated within every little internal process, and Headless commerce is one of the best tools for such a client-first approach. Without headless, most developers face the lack of synergy between front- and back ends. Changes applied in the admin requires sacrifices in front-end, and consequently, the overall shopping experience.

Headless commerce has made a significant entry into the online market. Amazon, Walmart, and Coca Cola use headless architecture because it supports the complex eCommerce system they need.

In non-headless eCommerce websites, any modifications in the admin potential call for some bad post-effects, usually affecting crucial areas like site SEO and web traffic. Customers are not interested to know that the functionalities they like to use came as a result of sacrifice elsewhere in their journey. Sacrifices are common inevitable, but anything hindering the comfort and trust of clients seems counterintuitive to success.

Smart online marketers strictly examine what their clients say about their products. The ideal eCommerce site should be as if customers made it themselves. Therefore, the value of technology depends on how well you manage your feedback channels. Developers can build and enhance, but only if they know precisely what the customer wanted. Unfortunately, knowing your customer is a process similar to Scrabble – easy to get into, hard to master. But once learned and adopted by your whole team – multiple factors related to client retention will improve, and such factors include customer acquisition cost.

The idea behind Shopware eCommerce lies at the core of headless architecture. It allows the presentational layer to enable the ultimate shopping experience while firmly controlling the backstage strings. Business executives that delve into eCommerce choose the headless method because it clears the space and time the need to invest in things that matter.

Brand and Trust with Shopware 6

Every piece of company asset must carry the confidence guaranteed by the brand reputation. Some online purchases fail due to a lack of confidence, and trust customers have towards the product or service. In this particular study, researchers recorded participants’ eye movement and how much time they spend on each object or feature on the screen. These and other factors are used to determine what makes the customer tick. Tests like these are an excellent example of how complicated it is to define and maintain customer preferences, so you can arrange for the customized delivery they expect. They also predict how these changes evolve in time.

Headless commerce enables a flexible interchange of back end components, without negatively affecting the quality of product presentation. One of the coming mistakes of rookie marketers is putting site structure and functionalities first, and adapt that to customers need. This approach leads to problems when personalizing the shopping experience, and customers quickly notice it by comparing it to the abundance of competitive companies out there.

With Shopware powered by headless commerce, your developers can easily follow customer requirements and feedback. Also, non-developers can edit the presentational part, without breaking the system, as seen in traditional eCommerce projects running on standard CMS. This condition doesn’t only alleviate developers so they can focus on more worthy tasks. It is also excellent for making the site front-end customizable by any team member without interfering with developers’ work, so they can finally focus on the things they do best — pure magic.

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Author

David Dorr, Head of eCommerce

David is the Head of e-Commerce at CodeCoda where he is responsible to lead several teams of eCommerce specialists. In his previous role as a data scientist for London Metropolitan Police, he was developing deep learning NLP algorithms as part of the Crime Prediction initiative. He then switched over to combine AI with e-Commerce.
He received a B.Sc in Physics from the University of Surrey, Guildford in 1996. With this scientific background, he switched relatively early in his life towards Neural Networks and e-Commerce and has ever since been fascinated with what AI and Machine Learning can do for Online Commerce.