Episode 108 | How to Increase Profits by Reducing the Customer Acquisition Cost

In this episode...
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Increasing a company’s bottom line is arguably the most important metric!
Decreasing your Customer Acquisition Costs (CAC).... not rate (we want to increase the acquisition rate) is one great way of increasing profits! Here are the strategies that have worked for our product business.
Here are a few ways to reduce your CAC:
- Know the psychology of your customer aka the psychographics so you can make the best product that will solve the problem for your customer.
- Create an influencer marketing campaign and provide a culture where your customer will share how they are using your products! Now you will get in front of your customer and help increase motivate a purchase.
- Create a community by involving your customer in product development, and inviting them to be a part of the team as an affiliate. We love using the following apps to help create a great community.
Here are a few apps that we use:
Check out alsosophia.com
Catch a few more episodes regarding psychographics!
Remember, you got this!
A Team Dklutr Production

Episode 108 | Transcript
Note: We use AI transcription so there may be some inaccuracies
Laura Hargrave: Welcome everyone here at Boss It. We would love to hear from you. Join us in our Boss It community by heading over to our website, bossitclub.com, and join our mailing list. As we grow, we will be launching our community of fellow Boss It BFFs, and we want you to be a part of it.
Okay, Sophia Noreen, let's dig into this. I can't wait to tell them all about how we got here.
Sophia Noreen: Welcome to the Boss It Podcast. My name is Sophia Noreen and I took an Etsy startup and launched it in big-box retailers within 12 months. As a creative with an entrepreneurial drive, I left my full-time career in healthcare to find better harmony between career, family, and self-care. We believe you can have it all. Yes, you can launch and run a successful scalable business while maintaining harmony in all aspects of your life. We believe we can learn from each other and draw on many experiences to create the best life possible. During each episode, we will share proven life hacks that will keep you on top and striving every day.
There should be no hesitation. Make a plan. Take action. We are here for you!
Sophia Noreen: What's up everyone? Welcome back to another fantastic episode of the Boss at podcast. My name is Sophia Nare. If this is the first time you are joining us, and today I want to talk about how you can use your social media influence and social media platforms to continue to grow your business.
Now, I'm sure you already know this, but those who are on social media, be it a personal brand or a. Our product are getting reach and getting the attention of more customers than you will if you're not on social media. So as much as we shy away from the social media game personally, we do need to put our products and services.
On social media because you are losing a big chunk of the market. Now, I've spoken about this in past episodes, but today I wanna just do a flashback of what we've been able to accomplish with our business also, Sophia, over the last four years, and why it was social media that allowed us to get so much traction within our community and also the.
Attention of big retailers like Walmart, who have continuously supported our growth in retail because we had social media backing, and we offer that as a bonus every time we walked into their store with a product. So let's get into that. And guys, if this is your first time joining us, make sure you hit the bell and subscribe wherever you're catching in this episode because we wanna make sure that we help support your growth as a business.
And remember, you can always hit us up on Instagram at BT Club if you wanna have more of a conversation about your individual situation. Okay? Let's get into it. So anytime that you're going to be developing a product or a service for your customer, the best thing you need to start with is the psychology of your customer and ask yourself, who are they and what problem are you solving for them?
The closer you get to understanding the psychology of your customer, the better product and service you are going to create. Now, why is this important when we speak about social. It's because if your product or service is terrible or doesn't solve the problem for your customer, you will be unlikely to see the benefits of social media because your product or service will not get that.
Review or the confirmation from the customer, they will not tell their friends, they will not recommend your product. And it sounds very, very straightforward that of course, you would wanna create a product or a service that your customers would like and recommend, but you would be surprised that many businesses will miss that mark.
They won't fully understand the psychology of their customer or who their customer actually is and what the problem is, so they won't be able to. The business misses the mark and they don't create the product or the service that is likely to be recommended to their friends and family. And that is the trick you can get on social media.
You can put up all the content in the world, you can do influencer marketing, you can do it all, but if your service or your product sucks and doesn't, Or is priced poorly or it doesn't offer what it promises, then it doesn't matter how much marketing you will do. You're just pumping marketing dollars either through ad spend on social media or through influencer marketing, and you will not see the organic growth that you can expect if you do have a product that will solve the problem for your customer.
Now, just bringing it back to what we've been doing for the past three to four years now on social media with the also Sophia. I will leave a link in the show notes so you guys can go check out that website, but basically we really tapped into what the customer needed from that community. And because the product was serving well and it was priced well, it was being recommended organically on top of the strategies we use with social media.
So we not only had the compounding effect of the recommendations from clients and customers, but we also had ad spend dollars going through and influencer marketing. So the trifecta was really helping to bolster up the. So I'm gonna go into why we need to ensure that we're doing all three in a. But the point is you really, really, really need to understand your customer, and you really, really need to understand the psychology of your customer.
Now, we talked about this in past episodes, so I'll leave a link for another episode somewhere on this screen if you're catching some of the YouTube or in the show notes, so you can go catch more information about how to understand your customer and their psychology. I know there's demographics, but psychographics are actually more important in my opinion, because sometimes you'd be.
That there will be somebody who's not falling in the demographics, but they still have the same psychology that might allow them to be your customer. So we really need to look at the psychographics, in my opinion first, and then perhaps tailor it down to demographics if that's important for your strategy.
So definitely catch those episodes after you hear this one. But the first thing is you have to understand your customer. You have to know their psychographics. You have to know what the problem is you're solving, and you have to have a product or a service that can actually do that for them. If you provide them a product or a service that doesn't actually do that, they will not recommend your product or your.
They actually could do the opposite. Not recommended at all by saying terrible things. Reviews, I see so many ads. One of the things I will do sometimes is you'll see the sponsored ads come up on social media and Facebook or Instagram is a good example and you can read the comments below and it's unfortunate.
Or you go to the brand social media Instagram page and you'll look at the comments and you'll. That they have terrible, terrible, terrible comments about customer service and all the rest of it. And to a new customer like myself who may be drawn in through an advertisement or some other type of marketing, I will go and look at those dms or I will go and look at those comments, or I'll look at those comments under the ad.
And if it's negative, I won't go any further. So if your customer is not satisfied with you, then they will do the opposite. They won't even not recommend you. They will go and say something on your public platform. And if you are not on top of that, that can just snowball into a whole other set of problems.
So make sure you are creating a product for your customer that's solving the problem and not ruining your. Once you feel you've nailed down the psychology of your customer and you've created the best product for your customer at that time. Now we do talk about how your product will need to be changed over time.
Remember, business is an iterative process. You are going to be changing things as they come up. But assuming that you feel that you've done the best possible, minimal viable product for your customer, and now you wanna take it to social media, you want to ensure that you are creating an atmosphere for your product to be shared.
Now it's also Sophia. That was our trick. It was influencer marketing, which we started. So that was step one and the trifecta. And essentially because we had the influencer marketing campaign, which was pretty robust when we first started, it allowed shareable content. So we had many products that were unique to the stage of our e, the Ramadan product line, and we had our influencers showing how.
Designing or decorating or doing their setups for E and Ramadan. And essentially that became something to aspire to. So we knew the psychology of our customer and the psychology was that our customer wanted to elevate the celebrations in the home for their children, primarily being mothers or caregivers for younger children in North America wanted to elevate the celebration.
So that's what you need to do too. You need to understand what is the motivation for them to buy your product or your. Now we need to share it on social media. So with the influencer marketing campaign that we developed, we ensured that the influencers who were selected were basically speaking to our customer.
We didn't select individuals who were perhaps fitness gurus or doing makeup. We went to the mom, lifestyle bloggers who fell within a specific demographic that would be talking specifically to our customer. And our customers are their followers, and you know, it's a whole science around it. But getting on social media and having shareable content, having those influencers share the content was the first thing that ignited that desire for our customer, because your customers won't always know what they want or what they need.
They know that they have a problem. Now, you as an entrepreneur or a business individual, need to know your role is to solve the problem, and if you can solve that problem, well then they will continue to recommend your product, which is exactly what we're trying to do. The reason why word of mouth marketing.
it's so powerful. It's because it reduces your acquisition cost for your customers. So instead of paying 15, 16, $17 to acquire a customer, it can be brought down to zero. If you are working only with. Word of mouth marketing, not a real life situation because chances are you will have to continue marketing to find new customers.
But the point is, the more word of mouth, the better it is for your business. So the goal is you start using your influencer marketing or social media marketing, and you tap into these pools of people who are following different influencers. That is the first. After knowing who your customer is and designing the best product, the real core marketing tactics is, in my humble opinion, influencer marketing.
And that will help elevate your brand as well. Because as a new brand or a new business, it's hard to get attention from everybody when you're competing with big businesses or already standing up businesses. So having an influencer in your team really helps you feel like, Elevating your business and really helps you feel like, hey, there is people here on my side that are gonna continue to share my product and show off my product and recommend my business.
So I really feel that if you can use influencer marketing with your social media campaign planning, you will highlight the benefits of your product. And help start that natural word of mouth spread, which you need once you get that going. The last part, besides paid advertisement, which we're not gonna talk about today, cuz Facebook and Instagram and YouTube and Google ads are all there for you.
Now it's TikTok as well. TikTok ads, we're not talking about that today. There's one more part that I think is very important and is very understated when it comes to social media, so let's talk about that. Okay. Let's talk about one more core thing that I feel will really help elevate your brand when it comes to social media marketing, and that is with the end goal of building a community around your brand and your product and services.
If you can do this, your brand and your community will be unstoppable. Because your brand is now not just a commodity. The goal really is to elevate your brand to a point where your brand is going to stand out in the crowd and have a community behind it to support its growth. And again, when you have a community, it will naturally result in a lower acquisition cost for your customer because they are likely to use word of mouth and spread your brand name.
So building community is probably one of the more difficult things for brands to do because you need to stand up in the crowd. You need to solve the problem. You need to go through all the steps of getting the attention from your. Solving your customer's problem and then having a way to continuously engage with your customer.
So the few tricks of doing this would be after you've done a successful influencer marketing campaign, you've already have those influencers as part of your community. You can continue to nurture your community and your influencers by continuing to pull them on social media. These are the few tricks we use.
Pull them, ask them about what they want for product. Ask their opinion when you're doing product development. Show up to in-person events, host events. So a few of the things that we've done in the past is we've definitely pulled our customers on social media so they feel that they're part of the development process when creating a product line.
They also get the sneak peaks. And they also get to basically submit photos. We do have a way of customers applying to be part of our ambassador program, and these are great ways to basically get the customers involved to sell your product. They obviously get a little bit of a kickback with 10%.
Commission rate, and I can put the apps below the links to the apps we use. We use Shopify and we have a ton of apps that I recommend that can help basically automate all of these ways of getting your customers brought into your community and being your ambassadors. So offering a discount for your customers as they become ambassadors and then offering them a commission when they sell that is amazing.
Then also given the opportunity to share. Photos and when they have the opportunity to share photos, we use a great app called Looks for that. They get another discount because they've shared the photos, they've shared the review. And I have to tell you, I think we have over 405 star reviews and we're seasonal.
So that for me means a lot that we have, that many customers that have taken their time, their effort, and gone through and left a review and submitted a. Which you can then use all these photos you can then use in your campaign planning, and it shows future customers that, Hey, look at all these people.
Look what they've done with my product. Look what they've done with all these amazing things and they've recommended us. It is a full circle. Now it goes back to the psychology. The customers want to do things that other customers are. They wanna feel part of the crowd. So it basically will help engage customers who are new and solidify that your brand and your service and your product are the go-to for that particular problem.
So guys, what I'm basically saying is you cannot avoid social media if you are starting a business. If you are a business owner, if you are. Planning to be a business owner or you wanna be a entrepreneur and you're just studying business, it doesn't matter. Social media is what is going to help take your business from basically spending ad dollars all the time, which you do not wanna do, to essentially having the spread naturally organically through word of mouth networking.
And that's what we want. We want your product to sell organic. If it's selling organically, you're gonna lower your customer acquisition cost, and that is gonna help put profits back in your pocket as you scale your business. Our goal is to scale the business. Some people are more about hobby business and they're just doing it as a side gig or side hustle regardless of what it is.
You want to elevate the word of mouth spread, and you want your customers to be recommending your product and not tarnishing your product and your brand. I find this actually happens a lot, but if the customer feels connected to your brand and they're part of a community, they're more forgiving. So again, if there's a problem that occurs and something happens and you have a product fail, your product launch failed, or the product wasn't as good as it how it's supposed to be.
If that customer actually feels like they're part of your community, and I find that they will not go and purpose. Leave negative comments or we'll purposely tarnish the name of your brand because they feel like they're part of your community. And so it really brings back to the last point there that your ultimate goal really should be to have a community around your brand that way, it's almost like building a shield around your brand.
Not to say that you go ahead and purposely create crappy products and crappy services. You have to continue to elevate and continue to iterate and continue to improve your product. And. But having that community in a little bit of a cushion, it's a bit more forgiving cuz I know that it's not just a business.
Now there's actually. Human being that potentially is behind that business or more than one human being a team. And if you can really inspire your customers to realize that you're there to serve them as a community, they're more likely to act as your shield when things may slip through that are not to your standards.
So again, guys, don't ignore social media. To market, take it seriously. It will make or break your business moving forward because that's where many sales are occurring now. They're happening online through the social media apps. There is still space for offline purchases in store brick and mortar, and that's why we speak about the pop-up shops and hosting events as perhaps one of the ways of building your community.
But you really need to make sure that you are adding this campaigning strategy to your marketing, either through social media influencing. We have a program for influencer marketing and you can always click below and watch the pre-training for that, but also have it so that you are starting to think about building that community.
That's the most important thing. When you have that community, it will save you many headaches down the line because now you're not just a commodity, but you're now a brand, and customers will be willing to support your brand as you grow, as you produce more. And as you continue to serve the community, cuz that's ultimately what entrepreneurship and business owning is all about, providing a service or product to serve your customers needs and solve their problems.
Which brings us back to the very first point. Knowing the customer's psychology will help you in spades. And again, we'll leave a link for that somewhere on the video or in the link in the show notes for you to click on that as well. So basically, guys, I gave you a lot of information. I know we talked about a few apps, which will link below a few videos, which will link below.
Again, you can follow us along on Faucet Club on Instagram, or you click the bell and subscribe here on the YouTube or wherever you're catching this episode. And remember, we release an episode every week, so. We will catch you guys again next week. And remember, make a plan and take action. And yes, you can have it all and I'll talk to you later. Bye.
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