Acquisition & Engagement

How to reduce customer acquisition costs by 10X with targeting jiu-jitsu

Becky Doles

Free image from Pixabya

Can targeting make your business profitable?

I recently talked to a marketing expert who absolutely pulverized a mobile app developer’s cost of user acquisition. Before the change, the developer was paying $3-4 per user. Literally an hour later, the developer was paying 30-40 cents.

How did he do it?

The developer he met was targeting very broad categories. Think: “people who like golf.”

Tighten your targeting

That’s a wide swath of people — tens of millions of people — which generally means it’s expensive to target, particularly on platforms like Facebook. It also includes many who might not actually be passionate about golf. Narrowing focus and targeting people who like “Arnold Palmer,” the famous golfer, or “Golf Town,” a golf-specific retailer, reduces the population numbers to manageable numbers: from a few hundred thousand to half a million.

Just as importantly, it considerably tightens the focus, ensuring that really intense golfers are in your target pool, not just casual fans.

The result, in less than hour, was a cost of user acquisition that plummeted from $3-4 to 30-40 cents per user. And the result of that was profitability for the app developer, whose LTV was about a dollar.

The process was simple.

  1. Start with the broad topic
  2. Find brands, celebrities, or groups that are more narrow targeting of the broad topic
  3. Target off those narrower criteria (lookalikes, people who like X, etc.) not the larger topic
  4. Enjoy better-quality users
  5. Enjoy lower prices — often because conversion rates are up, and platforms seek to deliver relevant ads to their users, rather than just noise

What could you be targeting tighter than you currently are? And how would cutting your cost of user or customer acquisition in half affect your profitability?

Author
Becky Doles

Becky is the Senior Content Marketing Manager at TUNE. Before TUNE, she led a variety of marketing and communications projects at San Francisco startups. Becky received her bachelor's degree in English from Wake Forest University. After living nearly a decade in San Francisco and Seattle, she has returned to her home of Charleston, SC, where you can find her enjoying the sun and salt water with her family.