If your SaaS startup is spending more money attracting and converting new users than your customers ultimately end up spending on your product, is it really worth it? Your business will never be profitable if you’re spending way too much money bringing users in. That’s why an important metric to measure is your user acquisition cost.

By measuring — and lowering — your user acquisition cost, you can scale your business faster and more efficiently. If you’ve never calculated your user acquisition cost before, don’t worry, it’s a simple formula. All you do is take the total cost of your marketing and divide it by your total number of customers. And if you find your user acquisition cost is too high, what can you do to lower it?

Let’s dive in, here are four simple ways to lower your user acquisition cost.

1. Get detailed about who your audience is.

The first step to lowering your user acquisition cost is to hunker down and get really detailed about who your target audience is. Marketing dollars are wasted when you don’t truly know who you’re marketing to. You could be marketing in the wrong places online, using copy that doesn’t connect with your audience or targeting an audience segment that has no use for your product at all. So to avoid spending your marketing dollars on consumers who will never convert, create a user persona to help you focus on those that will.


You can use a free template from Xtensio to create a detailed user persona in minutes. Brainstorm and do some research on your target audience’s motivations, preferred channels, goals, frustrations and more. Creating user personas will help you better understand how to sell and market to your target audience, which means you’ll spend less money trying to convert them.

2. Create useful content.

Blogging is one of the most low-cost strategies to convert visitors into paying customers. In fact, according to Hubspot, marketers who have prioritized blogging are 13X more likely to enjoy positive return on investment (ROI). By providing useful content on your blog, you’ll be found by more of your target audience on the web and you’ll become an authority in the industry. Users will trust what you have to say and will be more likely to become loyal customers.

Boosting your organic traffic will help reduce your reliance on paid marketing. But remember to include long tail keywords within your content. Long tail keywords are what your audience is searching for on the web. For instance, if your business is an online photo editing software, your target audience might be searching the web for “best online photo editing software”, and if you include that long tail keyword in your content, users who are looking for your product will find you and become customers.

3. Use retargeting.

Think of all the users who visit your site, only to leave and never return. You’re missing out on the opportunity to turn those visitors into paying customers. After all, you already know those users were interested in your product/service because they took the time to check out your site in the first place. So how can you get those users back? The answer is retargeting. Retargeting is a pixel you can add to your website that “follows” users who left your site without purchasing to sites like Facebook and displays targeted ads to convince them to return and buy.

Take a look at ted retargeting ad below. Enticing abandoned website visitors by telling them they’re minutes away from starting their own online business is a powerful way to get them to come back and buy.


So, instead of searching the internet for people who might be interested in your company, with retargeting you can focus on the users who you already know are interested for sure. Plus, the ability to continue communicating with visitors to your site after they’ve left is priceless.

4. Test, test, test.

Another important step to lowering your user acquisition cost is to be constantly testing your strategies so that you know what works and what doesn’t. You should be split testing your landing pages, home page, email marketing newsletters, subject lines, copy, popup optins, social media ads, everything — even down to what colors work best.

Split testing, otherwise known as A/B testing will allow you to see the effectiveness of your marketing efforts in real numbers. For instance, using your email marketing software you can see how many people clicked on a link inside your email message. Therefore, if you see that many more people click on a link when it’s in a green colored button versus a red button, you know going forward a green button will get you more clicks, and those clicks can lead to buys.

Now that you know these easy-to-implement tips for lowering your user acquisition cost, you’ll be able to keep more money in your business and turning people into loyal customers will be less costly than ever before. Start today and watch your return on investment soar.