How can you reduce customer acquisition cost?

To lower CAC, focus on conversion rate optimization by simplifying checkouts to reduce drop-offs. Implementing content marketing and organic growth strategies like SEO reduces reliance on expensive advertising costs. Additionally, use marketing automation for retargeting to improve customer loyalty and maximize the lifetime value of a customer.

What is the average CAC for eCommerce in India?

The average customer acquisition cost for eCommerce in India typically ranges between INR 800 and INR 1500. These industry benchmarks fluctuate based on your target market and product category. Brands achieving best results often balance Google Ads and Facebook Ads spend to maintain healthy profit margins within their business model.

What is the formula for CAC in eCommerce?

The formula is: Total Sales & Marketing Costs divided by the total number of new customers acquired during a given period. To ensure sustainable growth, your cac ratio should compare this cost against gross profit. This calculation helps determine if your marketing budget effectively generates a high average customer value.

What is the customer acquisition cost?

Customer acquisition cost (CAC) is the total investment required to gain a new customer acquisition. It includes all advertising costs, salaries, and content creation expenses incurred over a specific time period. Monitoring this metric is vital to protect your market share and ensure the business model remains profitable as competition increases.

How to calculate CAC in Shopify?

In Shopify, calculate CAC by dividing your total marketing budget (including Facebook Ads and Google Ads) by the number of new customers gained. Use customer segmentation to track which ad platforms yield the best conversion rate optimization. For best results, perform an A/B test on landing pages to lower the marginal cost of each sale.

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15 Ways To Reduce Customer Acquisition Cost Of Your eCommerce Brand (2026)

Want to reduce your customer acquisition cost (CAC)? Just keep doing what you’re doing and hope for the best. Or, read on and learn some actual strategies.

The global eCommerce sector is growing at an exponential rate and there’s no slowing down anytime soon. From India’s context, the country’s eCommerce industry is expected to value at over $200 billion by the end of FY 2026. And, the key factor behind this rapid growth is the number of brands entering into the digital space. While this is a good sign in terms of digitalisation and scalability, this also means more competition.

And, when the competition increases, brands end up spending more to get in front of their target audience, irrespective of the channels they use. This leads to increased customer acquisition cost, impacting the revenue of an eCommerce brand and bringing down profitability to a great extent.

Closely working with 500+ D2C brands, GoKwik has gathered a lot of information about how online eCommerce businesses can reduce customer acquisition costs and safeguard profits.

Let’s take a look.

What Is The Average Customer Acquisition Cost In eCommerce?

Customer acquisition cost (CAC) represents the total investment required to earn a single new customer. While this figure is a vital health metric for any brand, it is never "one size fits all". Your specific CAC will fluctuate based on your industry, geographic region, business scale, and specific marketing goals.

To give you a baseline for comparison, here is the average customer acquisition cost across key industries, according to Shopify:

Industry Sector	Average CAC (USD)
Arts and Entertainment	$21
Health and Beauty	$127
Fashion and Accessories	$129
Home Decor and Garden	$129
Electronics	$377

Unfortunately, staying profitable is becoming more difficult. Recent studies indicate that CAC has surged by 60% in just the last few years. This steep incline is driven by a "perfect storm" of industry shifts, including:

Privacy & Data Restrictions: The phasing out of third-party cookies and a sharp increase in customer privacy regulations have made precise ad targeting more expensive.
Market Saturation: The ease of launching digital brands has led to an explosion of new players, resulting in fierce competition for the same target audience.

GoKwik helps reduce customer acquisition costs

15 Ways To Reduce Customer Acquisition Cost Of Your eCommerce Brand

According to a blog published by Profitwell, customer acquisition cost has increased to almost 60% in the last five years. This means that while a company was spending INR 1000/- to acquire a new customer, now they’re spending INR 1600/-. In business terms, it’s a pure loss of INR 600/- which you, as an eCommerce company, can utilise otherwise and gain from it.

Listed below are 15 ways on how to reduce your CAC.

1. Narrow Down Your Audience

Instead of broad targeting, focus your marketing budget on high-performing segments. Use demographic data to identify top-selling locations and align your campaigns with local trends. Phase out low-performing categories or use clearance sales to move "dead stock". By doubling down on your most active traffic sources, such as Instagram, you drive organic growth and lower CAC.

2. Improve Customer Support And Shopping Assistance

Real-time assistance prevents potential customers from bouncing. Implement marketing automation via live chat or WhatsApp commerce to guide users through their target market journey. Automated responses on social platforms ensure no lead is ignored, which builds the customer loyalty needed to reduce customer acquisition cost.

3. Run Ads In Non-peak Hours And Run Retargeting In Peak Hours

Maximize your advertising costs by running broad promo ads during non-peak hours when competition and CPC are lower. Save your high-intent retargeting for peak hours to capture users when they are most likely to convert.

Lower customer acquisition cost ecommerce paid ads strategy.

For a detailed deep dive into ways to reduce your RoAS, refer to our guide on “5 Tips On How To Increase ROAS For Your D2C Brand.”

4. Personalise And Optimise Landing Pages

Directing traffic to a generic page wastes your Google Ads spend. Use dynamic content and product recommendations to match a visitor's specific intent. Streamlining navigation is a core best practice for conversion rate optimization, as it removes friction and directly impacts your profit margins.

5. Optimise Your Checkout Process

Shoppers abandon carts due to poor experiences; a "one-click" style checkout is essential. Solutions like GoKwik offer single-sign-on and pre-filled addresses, allowing users to finish a purchase in under three minutes. Reducing the total number of new customers who drop off at the final stage is the fastest way to achieve the best results in lowering CAC.

6. Redefine Your Payments Page

Besides optimising your checkout process, the payments page is another area where maximum drop-offs happen which ultimately leads to high CAC due to customer retargeting.

To ensure conversions, offer multiple payment options to your customers and provide clear and concise instructions throughout the process. Meanwhile, it’s equally important not to clutter the page. Sometimes, too many options can intimidate and confuse customers causing abandonment.

Here, you can leverage GoKwik’s payment suite. It puts all available payment options into categories and makes it convenient for customers to pay without having to choose payment aggregators, reducing considerable cognitive load. For instance, find all UPI payment-related options such as PhonePe, Google Pay, etc. under the “Pay Via UPI” tab.

Reduce customer acquisition costs by converting more customers through easy payment options

Additionally, GoKwik automatically switches between PA-PGs ensuring high success rates. GoKwik’s UPI suite has the industry’s best success rates, thereby further optimising on conversion rates.

GoKwik helps reduce customer acquisition costs for D2C brands

7. Weave Referrals Into Checkout

We all know that word of mouth is one of the most potent forms of marketing. People are more likely to trust recommendations from their friends and family than from ads. So, why not tap into this powerful marketing tool to reduce your CAC?

One effective way to do this is by weaving referrals into the checkout process.

After a customer completes their purchase, you can nudge them to share their purchase on social media or recommend it to a friend in exchange for additional discounts or store credits on their next purchase. This is the perfect moment to ask for a referral, as the customer has just experienced the “aha moment” of completing their purchase and is likely feeling good about their decision.

Referred customers are coming to you without having to spend a ton of money, they are more or less free. They have more lifetime value and are more likely to refer more customers. It can massively boost your sales and bring down your CAC.

8. Engage Micro-influencers

Collaboration with influencers can improve brand awareness and bring in more customers to your brand, thus reducing CAC. Here’s how your engagement with micro-influencers can work:

Micro or niche influencers have a small following. However, their followers are highly interested and engaged consumers who are interested in specific products and services. This means if you collaborate with a micro-influencer specialising in your industry, you can reach out to a larger group targeted audience.

Micro-influencers specialise in specific products and niches, making it easier for brands to choose to work with influencers relevant to your industry. Moreover, unlike celebrity influencers, micro-influencers are affordable.

9. Increase the average order value (AOV)

Acquiring new customers is 5 times more expensive than retaining existing ones. This means that focusing on your existing customers more than acquiring new customers can help in reducing customer acquisition costs.

How does increasing AOV help reduce CAC?

Your revenue will increase without spending on acquiring new customers
You won’t have to spend on marketing strategies to acquire customers
It helps increase the customer lifetime value and long-term revenue stream

Now let’s look at some strategies to increase AOV.

Upselling: An excellent strategy that can be applied throughout the checkout process, upselling involves recommending products of a higher value compared to the ones customers have selected.
Cross-selling: This strategy can be applied soon after a customer checks out. Encourage customers to purchase a related or complimentary product.
Loyalty programs: Keep customers engaged for the long term by offering incentives. Turn customers into brand ambassadors and referrers to bring new customers.

10. Retarget customers

Many times customers leave products in carts or wishlists without completing the checkout process. In such cases, instead of letting the customer go, you could retarget them by encouraging them to purchase the products they left on your website.

How does retargeting help reduce customer acquisition costs?

It helps encourage and convince customers to purchase products they are interested in.
As you nudge customers to make purchases, retargeting helps improve the conversion rate.
Retargeting uses data such as customer behaviour, preferences, etc., which helps create highly targeted campaigns which have high relevance to customers.

Here are some retargeting strategies:

Retarget customers on social media
Send retargeting email campaigns
Retargeting pop-ups
SMS, Messenger, WhatsApp campaigns

Kwik Engage from Gokwikhelps you retarget 30% more website visitors through automated WhatsApp marketing campaigns.

11. Include Email Marketing

Even though one of the oldest marketing strategies, email can significantly reduce customer acquisition costs. Email is a personal communication channel that helps build stronger one-on-one relationships with customers. Relatively more cost-effective than other marketing methods, email helps you with customer acquisition and retention at lower costs.

Now let’s look at how exactly we can use email to reduce customer acquisition cost.

Incorporate contact forms on the checkout page, and pop-ups on the landing page to build an email contact list of visitors.
Create different customer segments based on behaviour, preference, purchase history, etc., so that you can send them relevant emails.
Automate emails all along the customers’ shopping and checkout processes. For example, send real-time offers, welcome, thank you, and other notifications via email.
Send automated abandoned cart emails to bring back customers who left their carts.
Send personalised recommendations to customers based on their browsing and past purchase patterns. This helps increase conversion rates.
Create special campaigns for high-value customers to encourage orders of higher amounts.

12. Minimise Customer Churn

One of the most important factors for businesses is to retain customers. For that, you have to actively reduce customer churn. Meaning, you have to assess customer behaviour and predict when you might lose a customer and take the necessary steps so you don’t lose them.

Here are some steps to minimise churn and reduce customer acquisition cost:

Consistently monitor customer behaviour and keep a check on their actions on your website.
When you notice a possible churn, offer incentives, etc. to encourage customers to stay.
Set up automated abandoned cart email campaigns in your checkout process so you can bring customers back to your store.
Optimise the checkout page to provide good customer experiences to minimise churn

GoKwik helps reduce customer acquisition costs for Shopify brands

13. Increase Customer Lifetime Value To Reduce Customer Acquisition Cost

It’s not always possible to decrease the customer acquisition cost. And so, alongside decreasing CAC, you must also consider increasing customer lifetime value, which is the total amount you earn from a customer over time.

Let’s learn some ways to increase customer lifetime value that can help reduce customer acquisition cost.

Encourage customers to purchase more from your site by offering them discounts, gifts, and personalised offers.
Utilise the power of AI combined with human capabilities to provide a good experience to customers
Provide helpful, informational content to customers for a quality experience
Nurture customer relationships, create a community feel for customers, and engage them outside of transactions
Create more value for customers whether it’s through products, services, or the overall experience.

14. Create A Strong Content Strategy

Today, customers have too many options. It’s easy for them to leave brands and go to the next best option. One thing that can help keep them engaged with your brand is content. The way you communicate, how helpful your content is; does it attract people and excite them; is it unique enough, etc. are some factors you must consider within your content strategy.

Here’s how you can create a strong content strategy to reduce customer acquisition cost:

Provide content that helps customers to make purchase decisions. For instance, a blog on how to use your products or a lookbook on how to style products, can help them make informed decisions.
Automate content sharing with customers based on where they are at in their shopping journey on your website.
Create engaging and interactive content to improve customer engagement and loyalty.
Consistently monitor and analyze content performance and adjust your content strategy for better results.
Share content that helps create stronger relationships, and nurture and grow customers.

15. Optimise Your Customer Acquisition Cost Strategy

Just like any other marketing strategy, you must adjust and optimise the CAC strategy to stay in line with market trends and demands. For instance, the world of eCommerce is constantly changing. New technology, improved digital capabilities, etc. can impact your customer acquisition costs.

Here’s how you can optimise your CAC strategy:

Utilise data to make informed decisions. Incorporate data analysis tools into your eCommerce store and consistently monitor the performance of the various aspects.
Conduct A/B testing for the various aspects of your website, for example, ads, emails, call to action buttons, etc.

Conclusion: Future-Proofing Your Profitability

Reducing your customer acquisition cost is no longer optional; it is the foundation of a sustainable growth engine for any D2C brand. Every rupee saved on new customer acquisition directly boosts your profit margins and strengthens your business model.

By implementing these 15 strategies, from timing your Google Ads to optimizing your checkout, you protect your bottom line against rising competition. The choice is clear: continue with the status quo or take active steps to lower your CAC and increase the lifetime value of a customer.

GoKwik helps reduce customer acquisition costs for Shopify eCommerce stores

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AUTHOR

Atul Bansal

Head of Marketing

AUTHOR

Atul Bansal

Head of Marketing

Atul leads marketing at GoKwik, championing D2C brand building, growth strategies, scalable GTM for e-commerce, and data-driven customer acquisition. A former Amazon leader and IIFT MBA alumnus based in Bengaluru, he brings 15+ years scaling business across e-commerce, and fintech.

15 Ways To Reduce Customer Acquisition Cost Of Your eCommerce Brand (2026)

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What Is The Average Customer Acquisition Cost In eCommerce?

15 Ways To Reduce Customer Acquisition Cost Of Your eCommerce Brand

1. Narrow Down Your Audience

2. Improve Customer Support And Shopping Assistance

3. Run Ads In Non-peak Hours And Run Retargeting In Peak Hours

4. Personalise And Optimise Landing Pages

5. Optimise Your Checkout Process

6. Redefine Your Payments Page

7. Weave Referrals Into Checkout

8. Engage Micro-influencers

9. Increase the average order value (AOV)

10. Retarget customers

11. Include Email Marketing

12. Minimise Customer Churn

13. Increase Customer Lifetime Value To Reduce Customer Acquisition Cost

14. Create A Strong Content Strategy

15. Optimise Your Customer Acquisition Cost Strategy

Conclusion: Future-Proofing Your Profitability

Frequently Asked Questions

Atul Bansal

Atul Bansal