How to Use Email Marketing to Lower Your Customer Acquisition Cost (CAC)

Getting new customers costs money. And advertising costs keep rising constantly. You can’t do anything about it. But what you can do is make sure you’re using all the means you can to reduce the customer acquisition cost.

This is where email plays a big part.

 

 

What Really Drives Up CAC

CAC (customer acquisition cost) is what you spend to get one new customer. You add up your marketing and sales costs, then divide that by the number of new customers.

But many things push CAC up:

• Ads that don’t work well
• Messages that don’t hit the mark
• Pages that don’t convert visitors and so on.

Getting people to buy is no easy task. That’s why most conversion rates are below 10%, and the majority are between 1-3%. People don’t want to part with their money, and we have to work hard to convince them otherwise.

It used to be a lot easier. At least most of the paid traffic was cheaper, so you could afford driving lots of it, and even if just a fraction conferred, you made your money.

Things are different now. You need to employ better strategies to make your paid ads more profitable.

 

Use Email with Paid Ads

We know that not all people convert on the first visit. That’s why we use retargeting campaigns. We also know that some campaigns are better at driving sales than others. That’s why I use micro conversions to scale some campaigns.

If you’re selling something, getting an email subscriber is a micro conversion. But it can help you lower your CAC.

Email works great with ads. Don’t just use ads to sell. Use them to get emails.

 

Here’s how:

• First, make sure you’re tracking email subscribers
• Identify campaigns that drive email sign-ups, and check if you can double down on that
• Launch new campaign types or try different target audiences to see if you can get email subscribers at a low price. It’s easier to get a subscriber than a sale.
• Separate paid email list for the rest of your emails. This is important as you want to understand if these emails convert.

 

This way, you don’t have to keep paying to show them more ads. You can follow up for free by email.

You also don’t need them to buy right away. You have time to build trust. That’s how you make more sales at a lower cost.

Use something like a free guide or offer (a discount code) to get their email. That way, instead of asking them to buy right away, you build a list.

Then, send helpful emails. Show them who you are. Help them understand what you do. Build trust.

Let’s say you spend $100 on ads. You get 100 visitors. Maybe 2 buy. That’s $50 per customer.

Now, spend the same $100, but this time you collect 50 emails. You send them a few good emails. 10 people end up buying. Now your cost is $10 per customer.

Big difference.

 

 

Build Better Email Flows

I’m sure you know that you don’t have to send emails manually. You can set up automated emails. Those are called email flows.

Here’s a simple version:

• Give something away (a guide, trial, or discount). That’s how you get them to sign up
• Send a welcome email. Don’t sell in your first email. Give them what they signed up for, introduce yourself (your business)
• Share some tips or insights. This can also be your business story or your personal story, values, etc. Something that connects with people.
• Show proof—reviews or success stories.
• Make the offer

This flow would take four days. You can have more or fewer emails depending on what you have to say. You don’t need to overthink it. Just be helpful and clear. Write like you talk. Write to a friend.

Also, don’t send the same thing to everyone. Group your list. Send each group what makes sense for them.

And test! Try different subject lines. Try different ways of saying your offer. Small changes can boost results—and lower CAC.

 

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📧 Sample Welcome Email Template

Subject: Welcome! Here’s what to expect…

Body: Hey [First Name],

Thanks for signing up! Over the next few days, we’ll send you a few tips, some behind-the-scenes info, and a couple of useful tools to help you [solve the main problem].

If you ever have questions, just reply. We actually read these.

Talk soon, [Your Name/Brand Name]

CTA: [Link to a helpful resource or your homepage]

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What to Watch

To make sure email is working, keep an eye on:

• Open Rate: Are people reading your emails?
• Click Rate: Are they clicking the links?
• Buy Rate: Are they buying?
• Unsubscribes: Are too many people leaving?
• Cost per Sign-Up: How much are you paying to get each email?

 

If these numbers get better, your CAC gets better.

If you run ads every day to get new buyers, you’re always spending. But with email, you build a list. You can reach out again and again—for free.

You can even use email to re-engage people who clicked an ad but didn’t buy. Instead of showing more ads, send a message. It’s cheaper, and it can work better.

 

 

What You Can Do Now

Most email marketing tools have a feature that allows automated emails to be sent. If you don’t have email marketing software, get one. ASAP.

Once you set up your tool, here’s what you can do:

• Look at how you get customers now
• Add email earlier in the process. Instead of asking for an email in the last checkout step, ask for it on the second step. Test, obviously.
• Offer something to get their email. People love free stuff.
• Send useful, clear messages
• Track email list performance.

Tracking email performance

I’ve mentioned that you need to separate emails, that you got from paid ads. The main reason is that they usually have different metrics. If you are collecting emails using other methods, your paid email performance will get buried in the rest of those emails.

• since you paid for those emails you need to see if they convert at all.
• if they do, you can combine paid ad metrics with email performance to understand email impact.
• Recalculate your CAC using the sales data from emails. Check if the CAC has changed and if it makes sense to continue down that road.

 

The more insights you have into your campaign performance, the better decisions you will make.

You don’t need a huge budget. Just a smart plan. Start using email the right way—and get more customers for less.