Subsidizing Customer Acquisition Costs through Community Building

Customer Acquisition Costs

Subsidizing Customer Acquisition Costs through Community Building

The craft retailer industry, known for its creativity and passion, faces unique challenges, particularly in acquiring and retaining customers. One of the most significant hurdles is the high cost of customer acquisition (CAC). As the digital landscape grows more competitive, traditional marketing methods can seemingly drain resources. However, an effective strategy to offset these costs lies in building a robust community of loyal customers. By fostering a sense of belonging and engagement, craft retailers can not only reduce CAC but also enhance customer retention and brand advocacy.


Understanding Customer Acquisition Costs (CAC)

Customer Acquisition Cost (CAC) is a metric that reflects the total cost of acquiring a new customer. This includes marketing and sales expenses divided by the number of new customers gained during a specific period. In the craft retail industry, high CAC can be particularly challenging due to the niche market and the intensive effort required to attract customers who appreciate unique, specialized items.


Several factors influence CAC in today’s digital age. Online CAC include: 

  • Advertising
  • Social media marketing efforts
  • Content creation
  • Influencer partnerships

Offline costs include: 

  • Running ads in local papers
  • Partnering or hosting events
  • Joining networking programs like a Chamber of Commerce. 

As these costs rise, the impact on profitability becomes more pronounced, making it essential for craft retailers to find innovative ways to manage and reduce CAC.


The Power of Community in Craft Retail

Building a community around your brand can significantly reduce CAC. A community in the context of a craft retailer refers to a group of engaged, loyal customers who share a passion for crafting and have a strong connection to your brand. This community can drive numerous benefits:

  1. Increased Customer Retention: Loyal customers are more likely to make repeat purchases, which boosts your revenue without additional marketing spend.
  2. Word-of-Mouth Marketing and Brand Advocacy: Satisfied customers will recommend your products to friends and family, effectively acting as brand ambassadors.
  3. Increase Average Order Value (AOV): Loyal customers are happy to shop bundles and sales as often as your new products, often increasing your AOV. Higher revenue per sale with less effort leads into our next point: 
  4. Reduced Marketing Expenses: Engaged communities generate organic content and buzz, decreasing the need for expensive advertising campaigns. Additionally, loyal, returning customers do not require as many touchpoints to be ready to purchase. The trust is built in. 


Strategies for Building a Community of Loyal Customers

Now that we’ve revealed how a strong community can reduce CAC, let’s talk about four effective methods for building a community around your brand. 

  1. Providing Value-Added Content and Resources

Content is queen, especially in the craft industry. By offering tutorials, DIY guides, and inspiration, you can engage your audience and provide value beyond just selling products. Exclusive access to expert advice and tips can further deepen the connection with your customers.

Create a blog or a YouTube channel showcasing different crafting techniques, featuring guest crafters, and highlighting customer creations. This not only educates and inspires but also fosters a sense of belonging among customers.


  1. Facilitating Engagement and Interaction

Utilizing platforms for customers to interact with each other and with your brand can enhance their loyalty. Online forums, discussion groups, and social media communities can serve as gathering places for crafters to share ideas, seek advice, and showcase their work. Interested in creating your own online community? Check out our review of some of the most popular content community platforms for further insight and ideas. 

Using social media hashtags specific to your brand can also encourage customers to share their creations, increasing visibility and engagement. For example, a brand-specific hashtag on Instagram can lead to a vibrant, interactive gallery of customer projects.


  1. Rewarding Loyalty and Fostering a Sense of Belonging

Loyalty programs and incentives can motivate repeat purchases and deepen customer loyalty. Offering rewards for frequent purchases, exclusive discounts, or early access to new products can make customers feel valued and appreciated. Interested in creating a customer loyalty program? Read our post about different types of customer loyalty programs for examples on where to start.

Recognizing and showcasing customer creations on your platforms can also create a sense of belonging. Featuring customer stories, holding contests, and celebrating customer milestones can strengthen the community bond.


  1. Hosting Events and Workshops

Events and workshops are excellent ways to bring your community together. In-person events foster strong personal connections, while virtual events can both reach a broader audience and show the community your brand is invested in accessibility. Workshops offer hands-on learning experiences, enhancing skills and nurturing a deeper connection to your brand. Read our top tips for hosting in-person and online events.

Collaborating with influencers and industry experts for these events can attract new customers and add credibility. These events provide opportunities for customers to interact with each other and with your brand, further solidifying their loyalty. Consider partnering with other local businesses and tap into their audience reach with cross-promotion—they don’t have to be in the craft industry for this to be a success! Curious about how to work with influencers? Read our advice for working with influencers!


Calculating the ROI of Community Building

Measuring the return on investment (ROI) of community-building efforts is crucial to understand their effectiveness. Key metrics include:

  • Customer Retention Rates: Track how many customers make repeat purchases over time.
  • Referral Rates and Organic Growth: Measure the number of new customers acquired through referrals.
  • Social Media Engagement and Sentiment Analysis: Analyze the level of interaction and the overall sentiment of your community on social platforms.


Comparing the ROI of community building to traditional marketing channels often reveals that the former provides more sustainable and cost-effective growth. For instance, a strong community can lead to higher retention rates and lower CAC, translating to increased profitability. Learn more about effective methods for measuring ROI on our blog.

Real-world examples show that brands investing in community building see significant financial benefits. For instance, a craft retailer that invests in creating high-quality content and engaging online platforms often reports higher customer retention and lower marketing costs.



In the craft retailer industry, building a community of loyal customers is not just a strategy but a necessity for subsidizing customer acquisition costs. By providing valuable content, facilitating engagement, rewarding loyalty, and hosting events, craft retailers create vibrant communities that drive growth and profitability. Prioritizing community building can transform your business, turning customers into passionate advocates and ensuring long-term success in the competitive craft retail market.


Do you need help reducing your CAC and building a strong craft community? Stitchcraft Marketing is a marketing agency of crafting experts. We customize every program to showcase your brand, engage your customer base, and generate sales in a way that is nothing less than magical. If you’d like to work with us, contact us today to get started!


Michelle Walker
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