Redefining Acquisition: How AI is Saving Brands & Boosting ROI Amidst the CAC Crisis

In today’s Future Friday…

• Scale Profitably and Lower Ad Costs by 3X with AI Predictive Intelligence | Alex Song from Proxima

• How Brands are Bleeding Money on Customer Acquisition Costs

• Why Traditional Partnership Marketing Is Failing You (And What AI Does Differently)

• Your Next Marketing Move Should Be AI-Powered: A Closer Look with Proxima

• How to Use Predictive Intelligence to Bring Back Lost Customers and Dramatically Reduce Ad Spend

Dive in as we unpack how predictive analytics, powered by AI of course, not only lowers customer acquisition costs but also elevates your advertising and marketing strategies.

Join 9,000+ founders getting actionable golden nuggets that are tailored to make your business more profitable.

TOPIC OF THE WEEK

Rising Customer Acquisition Costs Are Secretly Bankrupting Brands

Competition is fiercer than ever. Customers are more elusive. Marketing channels are saturated, conversion is an uphill battle, and to top it all, customer acquisition costs are skyrocketing.

The landscape of acquiring new customers is daunting. So, where do you find your edge? Through leveraging artificial intelligence (AI).

In this piece, we're going to cut through the complexity of attracting new customers and how you can use AI to not only drastically lower costs but also elevate your entire customer acquisition process despite those challenges.

Acquisition is getting harder.

What do we mean? 

There’s hope on the horizon though. McKinsey suggests that AI could add a value of $1.4 to $2.6 trillion to worldwide sales and marketing.

ℹ️ Why This Matters Today

Think about this surge in CAC… How it puts a strain on marketing budgets, reduces profitability, and forces companies to rethink their acquisition strategies.

Traditional advertising and promotions seem less effective, leaving many feeling lost.

🏆 How to Use AI to Overcome the CAC Crisis

Data is your best friend when it comes to using AI to trim down those CAC figures across marketing, sales, and customer service.

By embracing data-driven AI strategies, you can not only save on costs but also create a more targeted, effective approach to growing your customer base.

Let’s break it down:

💰 Impact On Your Business

• AI can ramp up your growth marketing game, helping you reach targets faster and more efficiently.

• Targeted insights can also sharpen your retention strategies, making sure customers stick around longer.

• Using AI for data analysis helps you make informed operational decisions by pinpointing where growth is happening.

• Senior executives can use insights from AI to allocate budgets more wisely, especially in marketing, where spending is typically highest.

More about AI-driven marketing strategies in the next section 😉 

Looking to transition into AI-powered marketing optimizations?

⚒️ A roadmap for leveraging AI in marketing strategies.

🎯 1. Build AI Audiences for Meta Prospecting

Dive into your customer data to find what makes your best customers tick. Use those insights to target similar potential customers on Meta, making your marketing more effective and cost-efficient.

What to do:

1. Gather data on current high-value customers (behaviors, preferences, and engagement patterns).

2. Use machine learning to analyze this data and identify their traits and patterns.

3. Create lookalike audiences in Meta’s Ad Manager based on these insights.

4. Continuously test and refine audience targeting based on performance data.

📈 2. Scale Your Ads Profitably

Let AI manage your ad budget, focusing on what works best. This smart approach keeps your ROI strong as you increase your ad spend, ensuring your growth is always profitable.

What to do:

1. Integrate AI algorithms capable of evaluating ad performance across different customer segments and channels.

2. Adjust ad budgets to focus on the highest ROI areas.

3. Monitor ad performance to enable the AI's learning and adaptation.

4. Employ iterative learning loops, where the algorithm refines its targeting and budget allocation strategies based on ongoing results and data analysis.

📈 3. Scale Your Ads Profitably

AI can take over the heavy lifting of analyzing and optimizing ads. This frees up your team to tackle bigger projects, keeping your marketing sharp without the time sink.

What to do:

1. There are tools you can implement, such as Smartly.io and Revealbot to automatically analyze performance data from Ads Manager.

2. Use AI to automatically adjust targeting and ad placements based on ongoing analytics.

3. With AI handling routine data analysis and ad optimization, focus team efforts on strategic initiatives and creative aspects of marketing that AI cannot address.

4. Create or use an existing comprehensive dashboard like Tableau that allows for quick oversight of AI-driven activities and results, ensuring alignment with overall business goals.

So these are the actionable steps you can start working on with your team to get the ball rolling.

While it's possible to handle these tasks manually, there are tools and services out there to help you achieve quicker results without the hassle of doing everything yourself. 

And what would a Future Friday be without exploring the solutions that can propel your strategies forward? Let’s check out Proxima.

Proxima Vs. Old-School Cross-Partnership Marketing

Nod your head if you agree that every marketing dollar must work harder AND smarter. 

Classic cross-partnership marketing is straightforward, but it’s also a gamble.

You reach out to a partner brand, run some ad campaigns together, and hope for new customers to trickle in. 

But let's be real. It's hard to know if you're truly hitting your target audience since these campaigns aren't tailored to individual tastes and measuring their real impact.

That's usually anyone's guess because it’s difficult to measure the effectiveness of these partnerships beyond surface-level metrics.

While you have access to each partner's audience, potentially doubling visibility, not all partnerships are built equitably. 

Alex Song from Proxima AI puts it simply: “You need to have a good overlap of quality customers.”

AI-Powered Platforms like Proxima

But what if you could cut through the guesswork and truly understand which partnerships and strategies will actually move the needle for your business? 

No more guesswork, just strategic decisions backed by solid data, from email behaviors to transactions processed through Shopify or WooCommerce, you name it.

The good news is you can do that with AI-powered platforms like Proxima. 

Proxima can help you improve your performance in customer acquisition at scale with its advanced AI analytics, machine learning, and predictive modeling. 

The key is in predictive analytics, which leverages Proxima’s database of over 60 million shopper persona. 

Read next: Hyper AI Automation: The Essential Toolkit for Business

But is it really for you?

We should warn you that AI solutions like Proxima aren’t for every business out there. You might want to think twice if: 

• You don't want to be a data-driven company

• Not spending a minimum of $25,000 monthly on marketing

• Content with your current CAC

• Uninterested in boosting your marketing ROI

CAVEMINDS’ CURATION

Why Every Retailer Needs AI: Cut Ad Costs, Re-engage Customers, & Boost Your Bottom Line

How exactly can I use AI-driven predictive analytics to lower my ad costs and grow profitably?

Well, imagine you're the owner of a pet shop, and you have a customer who hasn't shopped in your store in a year, but has recently started buying lots of pet products elsewhere.

Proxima’s network of over 10,000 brands detects your renewed interest in pet goods, despite them not being from your previous go-to shop.

Leveraging this insight, Proxima cues that customer to send an exclusive offer, reserved for high-value customers like them.

Something that without the correct data network would’ve been impossible, now you have this kind of superpower of seeing through walls.

This strategic move aims to win you back with a deal too good to ignore.

This shared intelligence helps brands pinpoint the perfect moment to re-engage customers.

Instead of the hit-or-miss of mass marketing, predictive analytics uses precise data to win back high-value customers at just the right moment through the right channels—be it email or SMS, without the risk of overstepping.

💡 Potential Use Cases

But it doesn't stop with marketing. You can also leverage predictive data analytics to:

• Expand margins

• Improve inventory turns

• Optimize working capital cycles

• Lower cash burn

And really, the sky is the limit with the right data…

More cherry-picked AI-powered predictive intelligence tools:

• Criteo AI Engine - Empowers advertisers to build hyper-relevant ads tailored to each customer using commerce-focused ML.

• Metadata.io - Platform for B2B marketers that offers audience targeting solutions.

• DrivenIQ - specializes in custom micro-audience data that helps you reach your ideal customers with targeted messaging to drive sales.

NEEDLE MOVERS

Say Hello to Rufus: Amazon's Beta AI That Knows What You Want

Amazon has introduced Rufus, its new AI shopping assistant, now in beta on their mobile app. Designed to streamline your shopping journey, Rufus taps into Amazon's vast product catalog, customer insights, and internet-wide data to answer queries, compare products, and offer personalized recommendations.

Initially available to a select group of users, Rufus is set to expand to additional US customers in the coming weeks.

Microsoft Copilot for Sales and Copilot for Service Goes Live

Microsoft has just upped the game for sales and customer service teams by launching Copilot for Sales and Copilot for Service.

Priced at $50 per user per month, these AI-powered tools are designed to streamline the sales and customer service workflows. If you're already on board with Copilot for Microsoft 365, you can snag these new tools for an additional $20 per user per month.

Google Bard Now Has a Free AI Image Generator (and Other Cool Updates) 

Google has rolled out exciting updates for Bard. The AI chatbot now supports Gemini Pro across additional countries, improving its answer-checking mechanism for accuracy.

However, the standout feature in this update is Bard’s new AI image generator. Google said you can now generate “high-quality, photorealistic outputs” in Bard at no cost.

Just type in a description — like “create an image of a dog riding a surfboard” — and Bard will generate custom, wide-ranging visuals to help bring your idea to life.

That’s all for today!

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