How affordable payments reduce CAC - Plural by Pine Labs

How Offering Affordable Payment Options Can Significantly Reduce Customer Acquisition Costs (CAC)

Reduce CAC with Affordable Payment Options

Customer acquisition cost (CAC) is a key metric marketers use to calculate the company’s total cost to gain one new customer. It includes expenses for ad spend, employee salaries, software costs, inventory upkeep, gifts for potential customers, travel expenses, marketing costs, etc.

CAC is rising because of increased competition in the digital commerce space. Impactful digital ad placements command higher expenses; marketing strategies such as influencer partnerships require dedicated budgets, leading to increased CACs.

In fact, according to the CEO of The Pant Project, the digital cost-per-impression (CPM) is rising by 20%-25% every year.

This guide will help you understand how affordability and payment options can help you reduce CAC.

Enhancing affordability to reduce Customer Acquisition Costs (CAC)

Offering affordable payment solutions is a proven strategy to attract more customers, increase conversions, and optimize CAC. Businesses can create a seamless and enticing purchasing experience by reducing financial barriers.

Here are specific methods to achieve this:

EMI options

Traditional EMI used to be a long process that required applications and approvals. Today, however, it has become more accessible:

1. Low- and no-cost EMIs

A partnership with financial institutions empowers you to provide low- or no-cost EMIs that offset the cost of interest to customers. It allows them to split the price of a product as payable in instalments, enhancing the affordability of the high-ticket items.

2. Debit card EMIs

Debit card EMIs enable customers without credit cards to make high-value purchases using debit cards. Debit card EMIs work the same way as credit card EMIs, without the long-winded approval process. Disbursements are quick, and repayment is automatic.

3. Cardless EMIs

Cardless EMIs do not need credit or debit cards to issue instalment-based payments. They work on digital cards that websites or apps can process using a customer’s phone number or other details. This payment method is ideal for customers who do not prefer to use cards to pay.

Discounts and cashback offers

A Harvard Business Review study proves that shorter discount durations significantly impact customers’ purchase intentions as compared to the discount depth:

1. Seasonal and Festive Discounts

Time-bound promotional discounts (for example, Nykaa’s Pink Friday Sale or Flipkart’s Big Billion Sale) during peak shopping seasons create urgency in customers’ minds. Visible price drops help them make quicker purchase decisions by making their wishlist items more affordable.

2. Cashback

You can collaborate with financial institutions or payment gateways to facilitate cashback offers on certain special purchases. It creates a win-win for both parties by giving back to customers in a way that isn’t a loss for businesses.

3. Stackable discounts

Customers get excited about discounts they can apply on top of existing offers or discounts. It makes the final deal more attractive to them, enhancing affordability and brand loyalty. You can easily facilitate stackable discounts by combining brand-funded offers with bank/platform discounts.

Loyalty incentives

Loyalty incentives encourage customers to come back to your brand to shop. Here is how it helps reduce CAC:

1. Point-based rewards

Introduce a points system in which customers accumulate points for every purchase they make with you. Pitch these points as shopping value that customers can redeem at any time during the validity period. Accumulating points in their accounts drives customers back to your brand to shop and redeem, enhancing repeat purchases (and reducing CAC).

2. Exclusive member benefits

Membership tiers customers can escalate through as they shop more with you. Offer more attractive deals with each increasing tier, including personalized offers, early access benefits, extra cashback or points, etc., to improve customer retention.

Referral programs

Referral programs incentivise existing customers to recommend their products to more customers. This word-of-mouth marketing helps a great deal in lowering CACs:

1. Customer referral rewards

You can offer discounts, cashback, freebies, or other incentives for both customers – the referring and the referred.

2. Affiliate partnerships

Collaborating with influencers or other affiliates can enhance your outreach, allowing your content to reach more customers. You can also incentivize your partners based on the number of referrals they bring back.

These affordable payment options lower customer entry barriers and build trust and loyalty, ensuring higher conversion rates and sustainable CAC optimization.

Optimize your CAC with Plural by Pine Labs

Customers today prefer convenient payment options and flexibility, which makes affordability a necessary addition to payment flows. Plural by Pine Labs makes it easy for you to introduce affordability into your checkout process through these fey Features that reduce CAC:

EMI solutions for all customers

Offer low-cost and no-cost EMI options to remove cost-related purchase barriers. Provide debit card and cardless EMI options for your non-credit card customers. Manage your EMI customers centrally through a unified, robust dashboard.

Dynamic offers and campaigns

Plural allows you to personalize discounts, cashback offers and promotional campaigns to fit customer needs. Manage your campaigns easily for time-bound campaigns during festivals or marketing drives.

Quick fund settlements

Plural facilitates T+1 settlements for discounts provided through banks or brands, ensuring smooth cash flow.

Centralized management

Our easy-to-use platform lets you quickly customize and manage your affordability campaigns. You can manage them from end to end on a single interface, boosting operational efficiency.

Get Plural today

Reducing customer acquisition costs is the key to staying competitive in the commerce world today. Integrate Plural’s Affordability Suite into your checkout workflows today to boost sales, loyalty, and customer satisfaction.

Talk to us to explore a variety of EMIs and attractive offers tailored for your customers by Plural by Pine Labs.

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