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2022 CPL and CAC Benchmarks [HubSpot Research]

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2022 CPL and CAC Benchmarks [HubSpot Research]

As a marketer, you know you have to spend money to make money. This is particularly true when you’re trying to generate leads and acquire new customers. However, if there are ways to cut the cost of lead generation and customer acquisition without undercutting either metric.

To help refine your marketing strategy to lower the costs of acquiring leads and customers, here are some helpful CPL and CAC benchmarks from a recent HubSpot survey of hundreds of marketers.

Most Effective Strategies for Lowering CAC

Customer acquisition cost (CAC) is how much a company has to spend to get a new customer. In our survey we found that CAC varies a lot between companies and industries — that said, almost half (48.9%) of the marketers we surveyed said CAC has increased in the past year. Another 48.9% reported their CAC has stayed about the same, and only 2.2% said CAC has decreased.

When we asked marketers what they found to be the most effective strategies in lowering CAC, the majority (67.6%) reported improving customer retention among the most effective. Other strategies reported to be effective are:

  • Implementing a customer referral/affiliate program (62.5%)
  • Optimizing sales funnel (57.6%)
  • Conducting market research to better understand the target audience (55.8%)
  • Using a CRM (Customer Relationship Management Software) to streamline their sales cycle (53.8%)

Marketing Channels with the Highest and Lowest CAC

Being mindful of the channels you’re using and how much those channels cost is another way to lower the cost of acquiring customers.

Marketing Channels with the Lowest CAC

In our survey, 59.8% of marketers listed social media as one of the channels with the lowest customer acquisition costs. 55.8% said the same about email marketing, 41.4% listed experiential marketing, and 40.8% said websites and blogs.

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Marketing Channels with the Highest CAC

When asked what are the marketing channels with the highest CAC, 47.4% of marketers mentioned paid social, which is the practice of showing sponsored advertising content on third-party social media platforms. 46.2% said physical events and trade shows are the most expensive, 42.1% said physical ads, and 42.9% said print advertising.

Most Effective Strategies for Lowering CPL

Cost-per-lead (CPL) is how much money it takes to generate a new lead. Unlike with CAC, the majority of marketers we surveyed (56.2%) reported CPL has stayed about the same in the past year — only 37.7% said CPL has increased.

However, almost 70% of marketers still said their company is working to reduce CPL.

60% of marketers told us optimizing their website to convert leads into customers is among the most effective strategies for lowering CPL — that generally means taking strides like adapting websites for mobile devices or reducing page load times

Other effective strategies listed by marketers are:

  • Analyzing advertisement campaign performance data (55.9%)
  • A/B testing (52%)
  • Leveraging organic search traffic by investing in SEO (52.8%)
  • Conducting market research to better understand target audience (51%)

Marketing Channels with the Highest and Lowest Quality of Leads

Not every lead is a good lead — they don’t all have the need or desire to buy a product or service from your company. To ensure you’re reaching your target audience, here is a breakdown of channels marketers said attract the highest and lowest quality of leads.

Marketing channels resulting in highest quality of leads

In our survey, 44.7% of marketers mentioned social media as being a channel attracting the highest quality of leads. This could have to do with social media apps relying on targeted algorithms that point users in the direction of the content they like to consume.

41.1% of marketers also Search Engine Optimization (SEO) as a source for high quality leads, along with content marketing (37.1%), influencer marketing (37.1%), and virtual events, webinars, and conferences (38.1%)

Marketing Channels Resulting in the Lowest Quality of Leads

Our survey found 38.3% of marketers reported direct mail resulted in the lowest quality of leads. 37.8% also reported the same for email marketing, and 35% answered with experiential marketing.

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Marketing Channels with Lowest and Highest CPL

Similar to CAC, another way to lower the cost of generating leads is to look to channels with the lowest costs.

Marketing Channels with the Lowest CPL

45.6% of marketers reported in our survey that email marketing boasts particularly low CPL. About 40% said the same about websites and blogs and 42.6% said the same about social media. Percentages overlap because respondents were allowed to choose up to three answers.

Marketing channels with highest cost per lead

Half the marketers we surveyed mentioned influencer marketing as having the highest cost per lead — a trend that stems from the fact that influencers with large followings tend to have high rates.

44% of marketers reported print advertising to have the highest cost, and 42.5% of marketers said physical ads. Virtual events, webinars, and conferences were said to have the highest costs by 40.5% of marketers.

Now that you know which strategies and channels are the most effective for lowering CAC and CPL, you can confidently refine your marketing strategy to attract new customers and leads while also saving money.

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MARKETING

6 martech contract gotchas you need to be aware of

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6 martech contract gotchas you need to be aware of

Having worked at several organizations and dealt with many more vendors, I’ve seen my share of client-vendor relationships and their associated “gotchas.” 

Contracts are complex for a reason. That’s why martech practitioners are wise to lean on lawyers and buyers during the procurement process. They typically notice terms that could undoubtedly catch business stakeholders off guard.

Remember, all relationships end. It is important to look for thorny issues that can wreak havoc on future plans.

I’ve seen and heard of my share of contract gotchas. Here are some generalizations to look out for.

1. Data

So, you have a great data vendor. You use them to buy contacts and information as well as to enrich what data you’ve already got. 

When you decide to churn from the vendor, does your contract allow you to keep and use the data you’ve pulled into your CRM or other systems after the relationship ends? 

You had better check.

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2. Funds

There are many reasons why you would want to give funds in advance to a vendor. Perhaps it pays for search ads or allows your representatives to send gifts to prospective and current customers. 

When you change vendors, will they return unused funds? That may not be a big deal for small sums of money. 

Further, while annoying, processing fees aren’t unheard of. But what happens when a lot of cash is left in the system? 

You had better make sure that you can get that back.

3. Service-level agreements (SLAs)

Your business is important, and your projects are a big deal. Yet, that doesn’t necessarily mean that you’ll get a prompt response to a question or action when something wrong happens. 

That’s where SLAs come in. 

It’s how your vendor tells you they will respond to questions and issues. A higher price point typically will get a client a better SLA that requires the vendor to respond and act more quickly — and more of the time to boot (i.e., 24/7 service vs. standard business hours). 

Make sure that an SLA meets your expectations. 

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Further, remember that most of the time, you get what you pay for. So, if you want a better SLA, you may have to pay for it.


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4. Poaching

Clients and vendors alike are always looking for quality people to employ. Sometimes they find them on the other side of the client-vendor relationship. 

Are you OK with them poaching one of your team members? 

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If not, this should be discussed and put into writing during the contract negotiation phase, a renewal, or at any time if it is that important.

 I have dealt with organizations that are against anti-poaching clauses to the point that a requirement to have one is a dealbreaker. Sometimes senior leadership or board members are adamant about an individual’s freedom to work where they please — even if one of their organization’s employees departs to work for a customer or vendor. 

5. Freebies

It is not unheard of for vendors to offer their customers freebies. Perhaps they offer a smaller line item to help justify a price increase during a renewal. 

Maybe the company is developing a new product and offers it in its nascent/immature/young stage to customers as a deal sweetener or a way to collect feedback and develop champions for it. 

Will that freemium offer carry over during the next renewal? Your account executive or customer success manager may say it will and even spell that out in an email. 

Then, time goes by. People on both sides of the relationship change or forget details. Company policies change. That said, the wording in a contract or master service agreement won’t change. 

Make sure the terms of freebies or other good deals are put into legally sound writing.

Read next: 24 questions to ask ABM vendors before signing the contract

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6. Pricing factors

There are many ways vendors can price out their offerings. For instance, a data broker could charge by the contact engaged by a customer. But what exactly does that mean? 

If a customer buys a contact’s information, that makes sense as counting as one contact. 

What happens if the customer, later on, wants to enrich that contact with updated information? Does that count as a second contact credit used? 

Reasonable minds could justify the affirmative and negative to this question. So, evaluating a pricing factor or how it is measured upfront is vital to determine if that makes sense to your organization. 

Don’t let contract gotchas catch you off-guard 

The above are just a few examples of martech contract gotchas martech practitioners encounter. There is no universal way to address them. Each organization will want to address them differently. The key is to watch for them and work with your colleagues to determine what’s best in that specific situation. Just don’t get caught off-guard.


Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here.


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About The Author

Steve Petersen is a marketing technology manager at Zuora. He spent nearly 8.5 years at Western Governors University, holding many martech related roles with the last being marketing technology manager. Prior to WGU, he worked as a strategist at the Washington, DC digital shop The Brick Factory, where he worked closely with trade associations, non-profits, major brands, and advocacy campaigns. Petersen holds a Master of Information Management from the University of Maryland and a Bachelor of Arts in International Relations from Brigham Young University. He’s also a Certified ScrumMaster. Petersen lives in the Salt Lake City, UT area.

Petersen represents his own views, not those of his current or former employers.

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