Case Study

How we slashed Postmates CAC 82.5% on $1.3M in spend (398k Conversions)

How a marketing agency helped Postmates achieve an 82.5% reduction in their budgeted customer acquisition cost (CAC) by creatively pivoting their ad targeting strategy from "meal delivery apps" to "menus," ultimately resulting in a $3B acquisition by Uber.
May 4, 2023

Introduction

Reducing your customer acquisition cost (CAC) is essential to the success of any business. A high CAC can put a strain on your marketing budget, making it difficult to acquire new customers and grow your business. In this blog post, we will discuss how we were able to slash Postmates' CAC by 82.5% on a $1.3M spend, resulting in 398k conversions. We'll also share our approach, solution, and case study results, as well as tips on how to growth hack your customer acquisition.

Our Problem:

Postmates, a popular on-demand delivery app, needed to acquire new customers at a $40 CAC to hit their next milestone and continue to raise capital. Our challenge was to reduce their CAC while also increasing conversions.

Our Approach:

To reduce Postmates' CAC, we decided to pivot from their existing strategy of targeting people searching for "meal delivery apps" and instead target "menus." We remembered the massive amount of search volume in "menu" keywords and realized that hungry people searching for "Leonardo's Pizza Menu" in Gainesville, FL in 2008 were wishing there was an app like Postmates. Therefore, we built an entire menu operation into the Postmates app, mapping every single item from every single restaurant and building landing pages. Then, we drove users to those landing pages based on keywords like "Joe's Pizza menu."

Our Solution:

By being creative and pivoting our strategy, we were able to deliver an 82.5% reduction in Postmates' budgeted CAC, delivering a $7 CAC over a 1.5 year period. We also attained the lowest CAC in the entirety of their account spend.

Case Study Results:

Here are the metrics from our Postmates campaign:

  • $1.3M Spend
  • 1,048,026 clicks
  • 398,419 conversions
  • $3.36 CAC (budgeted $40)
  • 36.51% conversion rate
  • $1.28 Average CPC
  • $14.55 Average CPM

How to Growth Hack Customer Acquisition:

To optimize your customer acquisition and reduce your CAC, consider the following tips:

  • Conduct keyword research to identify popular and high-ranking search terms related to your topic
  • Create engaging and informative content that provides value to the reader, includes eye-catching headlines, and incorporates multimedia elements such as images or videos
  • Include clear calls to action throughout the post to encourage readers to take the desired action, whether that be signing up for a newsletter, purchasing a product, or sharing the post on social media
  • Measure and analyze your results to identify what works and what doesn't, and adjust your strategy accordingly

Conclusion:

Reducing your CAC is crucial to the success of your business. By being creative and pivoting your strategy, you can achieve significant cost savings while also increasing conversions. Use the tips and case study results discussed in this blog post to help you growth hack your customer acquisition and take your business to the next level.

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