Companies and organizations see the cost of customer acquisition as an important indicator when assessing the value that customers bring to their business. Customer acquisition management refers to a set of methods and systems for managing customer prospects and inquiries generated through various marketing methods.
What Is Customer Acquisition?
Customer acquisition is about attracting new consumers. Acquiring new customers means persuading consumers to buy a company's products and services.
The Customer Acquisition Funnel
In the business world, you typically visualize your customer journey with a goal-achieving process or similar graphic that highlights the stages of the purchasing process and the mindset of your prospects. When a consumer goes through the goal-achieving process and becomes a buyer:
- Get attention to your brand
- Add your products and services to their review pool
- Decide to be a paid customer for your business
Acquisition marketing aims to promote your product to new audiences and attract new customers. Therefore, it is an integral part of e-commerce marketing for all companies. More specifically, acquisition marketing is aimed at prospects in the "interest" or "review" stage of the conversion funnel.
8 Customer Acquisition Strategies to Try
1. Paid Advertising
Paid marketing is one of the fastest ways to help potential customers discover your brand and what you have to offer. Paid marketing buys ads that can target a specific audience rather than waiting for them to find you organically.
Paid marketing appears on search engine results on pages (SERPs) and social media channels. When creating paid marketing ads, select a specific channel and define your target customers based on location, search terms, interests, demographics, past purchases, and other pages you visit.
It takes practice to set up an effective campaign. Many companies choose specialized institutions for this purpose.
Startups and well-established organizations
2. Influencer Sponsorships
Influencers today are very reachable, and therefore their opinions are strong. As a result, more and more companies are dealing with influencer marketing. Generally, when a company decides to partner with an influencer, it sends the influencer a free product or service. Influencers receive a product/service, try it out, and then rate it to their viewers.
- It helps reach relevant audiences
- It enables you to build trust
- It expands the range of your brand
- Fake influencer marketing mistakes can sacrifice your brand
- Consume a lot of time
- High risk
Freelancers and startup companies
Marketing a product or service via email is a fast, flexible, and inexpensive way to reach new customers and retain existing ones by facilitating recurring access to your website. In addition, email marketing enables the creation of targeted and personalized messages.
- Flexible design
- Personalization and segmentation
- Undelivered emails
- Design problems
Small-sized to mid-sized companies
4. Referral Programs
If you run a good business, your current customers will help you grow over time through referrals. But it will probably attract more customers. Unfortunately, changing this isn't easy, so moving to a more extensive, profitable account usually requires a lot of time, energy, and a skilled salesperson.
- Referrals have the lowest cost per lead
- Referrals usually have a higher conversion rate
- You can't control the type of client you accept
- You can't control your growth
- You may have a hard time raising your price
5. Traditional Advertising
Traditional marketing uses offline channels to promote products/services/businesses and attract target audiences. Therefore, traditional marketing, like online marketing channels, is essential to your business's growth and development.
- It connects you with your local audience
- Traditional marketing creates credibility
- Promotional materials are reusable and recyclable
- Expensive compared to digital marketing
- It cannot be adjusted
- A little informative medium
Small-sized companies with digital unawareness
6. Search Engine Optimization
SEO is the process of getting internet traffic from free, organic, editorial, or natural search engine results. The purpose is to improve the website's ranking on the search results index.
- Raise brand awareness
- It makes you a market leader
- Do not disturb users who are not interested in your business
- Results are not guaranteed
- Regular maintenance is required
- There is no profit at first
7. Audience Building
Audience development is essential to any business, and you may already be doing some without knowing it.
- Building a community
- Build good connections
- Better collaboration
- Entirely not digital
- Time-consuming process
8. Content Marketing
Content marketing helps attract viewers, build relationships, and ultimately increase sales. However, there may be particular challenges.
- Build brand awareness, trust, and loyalty
- Increase traffic and conversions
- Support other marketing tactics
- Benefits are not immediate
- Skills and resources
- Find content ideas
How to Measure Customer Acquisition?
Customer acquisition cost (CAC) is a company's spending to attract new customers. It helps measure the return on investment of efforts to expand the customer base.
How to Calculate Customer Acquisition Cost?
To calculate the CAC, add up the costs of acquiring new customers (the amount spent on marketing and sales) and divide that amount by the number of customers who have earned it.
CAC = MC / CA,
CAC - customer acquisition cost
MC - marketing costs
CA - customers acquired
CAC Formula Example
If your organization spends $ 1,000 yearly on marketing and gets 1,000 new customers, dividing $ 1,000 by 1,000 customers gives $ 1 per customer, so CAC is $ 1. On the other hand, if you get 500 customers, you spend the same amount to get half the number of new customers, doubling the CAC to $ 2.
How to Minimize Customer Acquisition Cost?
- Improve your website conversion efforts: Make your site responsive on mobile and tablets, optimize landing pages, and clean up copywriting.
- Add value to existing customers: This may include new product releases or upgrades that customers can invest in.
- Adjust and optimize your customer acquisition strategy: Take the time to plan your acquisition and see how much each method costs.
How to Improve Your Customer Acquisition Strategy?
Make Your Strategy Sustainable
A sustainable customer acquisition strategy is a strategy that works in the long run. It means you can sustain your investment (money, time, people, etc.) for the foreseeable future.
Build in Flexibility
Customer acquisition strategies must also be flexible, as marketing and sales and how people respond constantly change.
Find Your Target Market
Not all consumers are the best consumers. Your customer acquisition efforts can waste resources if you don't target the right people. Before investing in customer acquisition methods, you need to define who you want to target with those methods.
Diversify Your Approach
Diversifying your acquisition strategies and using different acquisition methods will increase your chances of reaching new audiences and creating new leads. You can also balance risk and reward by diversifying your customer acquisition strategies.
Customer Acquisition Strategy Examples
Freemium Product: Otter.ai
One of the best ways to get your customers interested in your product is to give them a taste of it through the freemium option. One product that employs the freemium customer acquisition strategy is Otter.ai, an AI transcription tool that captures ideas, stories, and meeting notes.
Email: Kaleigh Moore
Email marketing is a valuable way to engage with leads regularly and keep your brand and product in mind. By turning the website visitors and blog readers into email subscribers, Kaleigh gained new information and is now a customer of the latest creation.
Content Acquisition: HubSpot
HubSpot offers dozens of new content each year, including ebooks, templates, worksheets, and more. This type of content is known as "gate content" because people must enter their email addresses to access it.
Event Attendance: WPMRR
Virtual events are a fun way to connect with prospects and sponsors while relaxing at home. If you are new to this customer acquisition channel, consider hosting a small webinar or virtual summit like the WPMRR. WPMRR does not charge for the event.
Search Marketing: Chima Mmeje
Chima Mmeje is a freelance SEO copywriter who uses search engine marketing (and a little social media) to attract new SaaS clients by bringing the brand from the depths of SERP to the top of the first page.
Customer Retention Is the New Acquisition (Method)
What Is Customer Churn?
Customer attrition represents the percentage of customers who abandon your business and reject your product or service. It is also known as customer turnover or sales.
Customer Acquisition Funnel
As we've already seen, the acquisition funnel is a convenient visualization of how customers learn about and buy your brand. However, nowadays, the flywheel concept has been in place and replaced the funnel strategy.
Turning Happy Customers into Promoters
To turn a happy customer into an advertiser, you need to aim for customer retention and customer joy. Customers who stay for what they want can offer more value than higher revenue.
Ask for Customer Stories
Whether it's a case study, an interview, a review, or user-generated content, ask your customers to tell their stories about how they discovered your business and why they liked it. Instead of bragging about your business through paid advertising and social media, pass the microphone and let your customers do it for you.
Make Content Easily Shareable
Create a social network link to make it easy for your customers to share your social posts, and make sure you have the option to share your posted content via email or social media.
Creating a referral program is a surefire way to make a new business from your customers. Providing incentives is usually the best way to motivate customers to share something about your business, whether it's a loan, a physical gift, or a cash reward.
Let's Talk about Customer Lifetime Value
What Is Customer Lifetime Value (LTV)?
Customer lifetime value is the estimated net profit an individual or company generates over its lifetime as a paid customer.
Smart Customer Acquisition Helps You Grow Better
What Is a Customer Acquisition Specialist? Plus Why You Need One
Customer acquisition is the lifeblood of any business, big or small. No matter how much it costs, you can't give up marketing to new customers. However, research shows that the key to growth lies not with the marketing or sales team but with the customer service team and the customer himself.
Customer vs. Consumer: What's the Difference?
A customer is an individual who buys a product. A consumer is the ultimate consumer of a product or service.
How to Build a Robust Customer Referral Program?
Start with a customer testimonial template. Set your goals. Find out how referrals bring to your business. Decide what fits your business. List potential customer referral sources. Next, identify the channel that hosts the referral program. Finally, make a plan to contact.
Customer Acquisition FAQ
What is a customer acquisition strategy?
Customer acquisition strategies define the best combination of media and engagement tools (lead generation and product delivery), target new customers, and reach them through online and offline customer journeys.
What is the purpose of customer acquisition?
Customer acquisition is vital for starting a business and building a foothold in the market, from acquiring new customers to increasing sales. More customers mean more revenue, which means more profit for your business.
How does customer acquisition different from customer retention?
The acquisition process involves marketing to potential customers and expecting them to try out the company's products or services. On the other hand, customer retention includes customer satisfaction, service quality, and loyalty programs.
What are the customer acquisition tools?
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