5 Effortless Ways to Improve Your Player Acquisition Costs
by Game Marketing Genie, on 13-Sep-2022 10:33:50
With the advent of new digital marketing strategies, advertising costs have skyrocketed. Today, gaming brands have to pay an excessive amount to market their games, acquire new players, and establish brand authority.
Fortunately, there are multiple ways to make advertising cost-effective and generate a high return on advertising spend (ROAS). One of the most effective methods to reduce your ad spend is by optimizing your customer acquisition costs (CAC).
In this blog, let's learn what CAC is and how optimizing it can positively impact your advertising spend!
What is customer acquisition cost (CAC)?
As mentioned above, CAC is one of the most necessary expenses in the total marketing spend. It refers to the approximate cost brands spend to gain a new customer.
Brands often confuse customer acquisition cost (CAC) with cost per acquisition (CPA). However, both are different metrics. CPA measures the approximate cost spent to acquire a lead — not a customer or player — in a campaign. Remember that the objective of these marketing campaigns isn't always to drive more sales. But it can be to increase the newsletter subscriber count, sign up to a website, or download the free trial. Usually, these campaigns aim to collect contact information from prospective players. Though CPA is an important metric to track, gaming brands should pay more attention to their ultimate goal, increasing their game's download rate.
Figure 1: CAC and CPA formula. Source: Wordstream
Conversely, CAC deals with converting customers and getting tangible results, such as higher sales and revenue. It is a must-track metric when running direct-response marketing campaigns. CAC allows you to measure the overall success of your business, while CPA is only limited to highlighting the campaign-level success. A successful business has a lower CAC and a higher customer lifetime value (CLV) — the total amount of money a player is helping you generate throughout their journey with you.
How to calculate your CAC
Now that you know what CAC is, let's learn how you can calculate it. The formula to measure CAC is:
CAC = Total spend on acquiring players / Number of players acquired
In case you're unsure what the "total spend on acquiring players" entails, consider incorporating the following expenditures:
- Ad spend: Amount spent on advertisements aimed at attracting your target audience.
- Employee salaries: Amount you pay to each employee who worked to convert players. You can leverage chatbots and automate specific marketing processes to decrease this cost.
- Creative costs: Amount spent on creating content to establish credibility and highlight industry expertise.
- Technical costs: Costs on particular technologies and software that marketing and sales teams use.
- Publishing costs: Amount spent to release the marketing campaigns to the target audience.
- Production costs: Amount spent to purchase equipment to create content, such as cameras or tripods.
Whenever measuring CAC, resort to monthly measurements to accurately calculate the average cost required to convert customers per month. Month-to-month analysis helps determine the ROAS and assess how effective your advertisements are.
5 effective ways to optimize and improve your CAC
#1. Focus on the right audiences
Before designing ways to minimize your customer acquisition costs, understanding your customer is a must! Without proper knowledge of your targeted audience, you'll be aiming to convert the wrong customer segments for whom your game may not be the best fit. Targeting the wrong customers will also waste your valuable marketing resources. And even if you convert the right players, it'll come at a higher price. Therefore, identify your customers before you create cost-effective marketing strategies to acquire them.
First, outline the players your game is an ideal choice for. With that sorted, you can further brainstorm ways to capture their attention and eventually make them download your game. Modern customers are more inclined towards personalized content and interactions. You need to know your audience's age, interests, lifestyle, daily schedules, income, and online behavior.
Create buyer personas to define your target audience clearly. A buyer persona is a research-based profile of your target video game player. Now, create game marketing strategies and optimize your CAC, keeping in mind your buyer persona.
#2. Test your content
Figure 2: Example of a landing page. Source: HubSpot
You may not realize it, but creating content is a costly affair. Thus, content creation cost is an essential factor when calculating CAC. Therefore, you need to optimize the cost spent on mass-producing content to minimize your CAC.
Start by analyzing your creatives, landing pages, copies, and advertisements. Evaluate your game's website's titles, forms, buttons, and layouts. Testing these elements will help you choose the best-suited content format and visual style that generates more clicks and converts more leads. It will help you determine which version of your website and landing page appeals to your target audience the most.
While testing your content, pay attention to the fluctuations in the conversion rates of your landing pages. Play with the button colors and phrases used for the call to action and finalize the style that boosts your cash flow.
Remember, before adopting a new style and website layout, test the current one for at least two weeks. This will help you get accurate results and choose the best-suited type.
#3. Optimize your marketing funnel
Figure 3: Standard marketing funnel stages. Source: Smart Insights
An effective marketing funnel helps brands manage their customers' journey until their conversion. The four major steps of every marketing funnel are awareness, interest, decision, and action. The right marketing funnel streamlines a customer's journey and helps brands nudge their customers further down the sales pipeline until they purchase the product. Any leaks in the marketing funnel will make you lose your leads before they convert into your buying customers.
A powerful marketing funnel minimizes player acquisition costs, ensuring you receive a high return and more conversions. It increases sales, helping you earn back whatever you invested. Consequently, your final CAC is less, and you gain profit.
Additionally, an effective marketing funnel will offer you ample details on your target audience and help you understand their motivations and why they opt out of your funnel. Analyze these reasons and make appropriate changes to your funnel for improved results and sales.
#4. Keep your marketing strategies updated
Outmoded marketing strategies may generate new customers, but all these leads will convert at a much higher price. To get more customers at a lesser cost:
- Adopt modern marketing strategies.
- Follow the trends in the digital marketing sphere and test if they lead you to a lesser CAC.
- Eliminate outdated processes that aren't offering a higher ROAS.
One of the efficient marketing strategies to attract customers without paying a higher sum is affiliate marketing. This entails collaborating with affiliate partners and leveraging their wider reach to increase brand awareness and engage with prospective customers. Affiliates often have closer connections with their target audience and can convince them to download your game better. This will get you more sales and even reduce CAC, as affiliates only charge a commission on successful conversions. In other words, you are paying for tangible results, and there isn't any upfront cost.
#5. Use the power of influencer marketing
Another popular way to reduce CAC and impact your customers more is influencer marketing. Social media influencers usually have a higher fan following; hiring them to spread the word about your brand will work wonders and help you get more exposure. It is the best way to tap into newer audiences and highlight your game's best features and benefits. Partnering with the right influencers can even help you stomp the competition and inform your audience how your game is unique.
The best part is that influencer marketing can significantly reduce your CAC costs, especially if you partner with nano influencers. These influencers may not have many followers, but they are known for having a stronger bond with them. They're even best-suited for the gaming industry since it has a hyper-niched audience. A study by Tomoson reveals that influencer marketing offers a $6.50 return on every $1 spent. Since you get a high return, the CAC is optimal.
If you're looking for an effortless way to collaborate with proficient gaming influencers, Atisfyreach is the way to go! It is an AI-based influencer marketing platform bridging the gap between brands and influencers. Register today, enter your industry details and the type of influencers you're looking for, and Atisfyreach will send a list of eligible influencers your way!
Getting your gamers gaming
Your players aren't gonna find your game themselves... unless you've got the right player acquisition strategies. Get 'em all in Marketing to Gamers and the Gaming Community: The Complete Handbook.
Spend less, earn more with Game Marketing Genie
Reducing CAC is essential and will positively impact your overall marketing spending. However, there are diverse other research-backed ways to reduce your investment cost and generate higher revenue. At Game Marketing Genie, we can create cost-effective personalized marketing strategies to market your game at affordable rates. We're an experienced game marketing agency offering all the marketing services a brand needs to flourish.
Find out more from our team of experts!