Customer acquisition is the practice used to bring in new customers by identifying, targeting, and converting prospective customers. Successful customer acquisition refers to generating leads, nurturing them in a sales funnel, and converting them into buyers.
Customer acquisition methods are beyond doubt the number one priority of successful marketers, business owners, and industry experts. The acquisition of new customers starts with the product or business goal you are trying to accomplish. Such goals revolve around targeting and acquiring a group of potential customers and converting them into loyal customers.
This post will take you deep into the world of customer acquisition practices, and help you understand the best methods to widen your reach and optimize your conversions. So, without taking any further, let us get started right away-
Table of Contents
What Is Customer Acquisition?
Customer acquisition refers to the process by which a company converts a potential customer into a buying customer and then into a loyal customer. Some examples of customer acquisition are through advertising, direct marketing, customer relationship management platform, sales promotions, etc.
Customer acquisition is defined as the process of acquiring new customers by identifying, connecting, convincing, and converting them. It is essential to businesses of all sizes and types. Gaining customers is the basic necessity of any business. The customer acquisition process enables your business to-
- Meet maintenance costs
- Pay your employees
- Gain profits and reinvest the capital
- Acts as evidence of growth for the investors, partners, shareholders, etc.
Stages of Customer Acquisition
The customer acquisition channels start with awareness which is the widest funnel at the top to capture the maximum attention. By going down, the funnel narrows down to peel away low-quality leads.
The whole process includes 6 phases and the bottom-most phase is the purchase. Let us have a look at all the six phases here and now-
Steps involved in acquiring Customers
How does a consumer become your customer?
There are three necessary steps in how you meet your potential customers and convert them into customers.
- The consumer becomes aware of your brand through some means.
- He considers the utility value and affordability of your product/ service to him.
- After considering the details, he makes an informed decision to become a paying customer of your business.
Some people consider the acquisition of customers similar to the lead generation strategies. Let us understand the exact difference between them here and now-
After looking at the steps, the fundamental question is, what is the difference between lead generation and customer acquisition? We will help you understand it better.
Now, considering the three steps, lead generation can be called the first step.
Those three steps as a whole are called customer acquisition. In short, lead generation can be called a part of customer acquisition.
All in all, lead generation revolves around the strategies for widening your reach, while customer acquisition is dedicated to converting those leads into loyal customers. Let us now go through some of the strategies that can supercharge your acquisition practices for improving the customer base-
Successful Customer Acquisition Strategies
The plans you employ to attract consumers to your business and make them your customers are customer acquisition strategies.
Your customer acquisition strategy includes all the steps you take to make a consumer buy your product or service. Effectively, this implies that you will have to use your time and money to devise and implement your customer acquisition strategies.
To devise an efficient customer acquisition plan, some of the strategies you can use to acquire customers are –
1) Identify your target audience through a customer acquisition funnel
Every business has its target customers. Not everyone will buy your product/ service.
And to gain these customers, you will first have to identify your target audience. This is the group of prospective consumers who you think would be interested in buying your product or service.
All the customer acquisition strategies must be concentrated on that group. Knowing your target audience turns out to be extremely useful because it lets you channel your resources onto a specific group of people.
That way, you can pay more attention to your potential customers and make the most of your funds.
2) Know the Right Channels for Customer Acquisition Campaigns
Now that you know your target audience, you can devise various strategies to acquire customers and make them buy your product.
Adept use of the right customer acquisition channel to channelize customer relationship management not only optimizes business presence and awareness but also boosts conversions and sales. Different techniques used for acquiring new customers involve-
Below listed are some of the best tried and tested customer acquisition channels that will not only help you acquire new customers but also empower your customer retention objectives –
The first step to a successful customer acquisition strategy should be designing a perfect landing page. It should be pretty, and attractive, and should invite your potential customer to buy your product or service.
Different ways you can use landing pages for customer acquisition are-
- Use landing page(s) integrated into site architecture and style
- Opt for bespoke landing pages that are not part of the main site structure or style
- Use Microsites with several pages or tabbed landing pages
- Your home page can also be a landing page
- Best-converting landing pages are minimalist in design
- CTA or Call to Action is the heart of every landing page
- Use effective imagery on your landing pages
Search Engine Optimization and Content Marketing
The use of SEO or Search Engine Optimization is one of the best online marketing efforts for new customer acquisition as well as connecting and retaining existing customers.
Running targeting SEO campaigns is the most effective and sustainable customer acquisition strategy to optimize brand awareness, lead generation, and direct sales.
Blending SEO with content marketing is rated as one of the top-rated customer acquisition methods of contemporary times.
All types of businesses can take advantage of content marketing strategies. You can market your brand by providing eBooks, videos, images, and blog posts. Amateurs, professionals, and consumers continually search for products like these.
Also, you can project your brand authority by sharing your knowledge and expertise. This way, you can boost lead generation as potential customers casually enter your website in search of information.
If they get valuable and useful content here, they will most certainly think about buying your product or service. The different content marketing strategy you can use for customer acquisition is-
- Account-Based Marketing Content Strategy
- Surveying Your Long-time Customers
- Measuring How Your Sales Teams Are Using Content
- Use content to increase brand awareness
Running SEM campaigns or PPC ads or utilizing paid advertising campaigns is also a highly effective acquisition tactic.
You can run paid ad campaigns on Search Engines or Social Media as per your marketing budget to optimize your business, brand, or online store.
All the costs of paid advertising can be tweaked as per your acquisition budget and marketing spend.
Live chat is the most effective and interactive way to communicate with your potential customers, know what they want, and deliver it to them.
If the customers are impressed by your service, skill, and knowledge, they will most certainly consider buying your product or service.
A better option for this is an automated live chat by a live chat software program. This is efficient, as well as cost-effective. One-to-one interaction with the customers increases their engagement with your brand on a personal level.
Some of the top live chat tools you can incorporate into your customer acquisition strategy are-
- HubSpot Live Chat
- Pure Chat
Social Media Marketing
Social media has the power to spread your content like fire. It is the most effective tool as of now because of its ease of use and popularity.
Almost every person using the internet uses some of the other social media websites. It remains your responsibility to make the most out of this handy advertising tool.
Some of the key ways to use social media marketing for optimizing your customer acquisition strategies are-
- Listening to your target audiences
- Engaging your target audiences with content
- Creating immediate opportunities to shop
- Measuring and refining campaigns in real-time
Email marketing might only seem like an outdated option but is still highly relevant.
It is the most non-intrusive way of marketing. Emails have a touch of formality that modern-day social media websites lack.
So, the customer retention rate in this strategy is higher. Also, you get to contact the customer directly through their inbox. Unlike social media websites, you do not remain dependent on algorithms and the online behavior of the customer.
The best direct mail marketing practices for customer acquisition are-
- Write to a real person, not to a list
- Automating the customer journey
- Never bury the lead
- Creating lead magnet
- Running a contest
- Optimizing emails for mobile
- Timing your emails
- Make emails easy to share
- Start using A/B Testing
- Use your website to grow your email list
- Include CTAs at the front and center
It is a common human tendency that a person will believe another person rather than any image, book, video, or website.
Referral programs will help your brand grow by generating word-of-mouth publicity, as word-of-mouth referrals bring a lot of customers to the site and product page.
A simple trick of rewarding the referrer as well as the purchaser will help you generate a lot of extra traffic. Everybody wants to get paid, and you can use this tendency for your benefit.
By using the above strategies, your page will finally start getting traffic. But maintaining this traffic is also essential. So, always keeping your website updated and optimized will further help to convert visitor traffic into paying customers.
You can use loyalty programs to empower your marketing strategy in having optimized customer loyalty. While running an online business, it is crucial that you not only target and convert your prospective customers but you should also run marketing campaigns to retain them.
Retaining customers is also one of the most crucial marketing tactics to lower customer churn rate (which refers to the rate at which existing customers of a business discontinue their interaction or exchange with that business).
It is crucial to understand which of your strategies are working correctly and which are not. That way, you can focus on the best ones and discard the useless ones. This is inevitable if you want your client acquisition to offer favorable results.
Utilizing analytics to the full extent will help you funnel your resources towards effective strategies and increase the business manifold.
The use of analytics will update you about the behavioral preferences and tendencies of your website visitors. By analyzing customer data, you can understand how much value an existing or potential customer is offering to your organic or paid advertising campaigns.
It can help you track sales and understand how much money you should spend to do market research and run customer acquisition campaigns to optimize conversions.
3) Measure Customer Acquisition Costs Regularly
All of the customer acquisition strategies come with a cost. Whether it may be a social media advertisement or landing page development software, all of these strategies need to be paid for.
And, to run a successful business, one has to ensure that whatever one is spending to acquire a customer should never be more significant than what the customer is paying the company. If this doesn’t happen, the company will spend more than what it is earning and incur losses despite high sales.
So, to check the efficiency of your customer acquisition strategy, you will have to calculate your customer acquisition cost (CAC).
Calculate Customer Acquisition Cost CAC
CAC or customer acquisition costs for a single campaign can be calculated by using a straightforward formula that goes as follows-
CAC= MC/ CA
- CAC- customer acquisition cost
- MC- marketing costs
- CA- customers acquired
Now, the marketing costs will include every cost like salaries of employees, the price of resources, etc. So, the formula to calculate CAC for a given time period is further modified as-
CAC= (MC+ W+ S+ OS+ OH) / CA
- CAC- customer acquisition cost
- MC- marketing cost
- W- wages of employees
- S- marketing and sales software
- OS- outsourced services
- OH- overhead for marketing and sales
- CA- customers acquired
By checking the CAC from time to time, you can make sure a good customer acquisition cost remains profitable. If the costs become unreasonable, you can always cut down the marketing expenses or increase the value per customer.
4) Be Aware of the Best Tools to Support Customer Acquisition Efforts
Now, to convert all of the above strategies into reality, you will need a lot of tools.
Luckily, a wide range of tools is available in the market. Since the industry experts meticulously design these tools, they will surely help to turn your potential customers into paying customers. Some of the best ones are listed below.
Cost- Pricing starts from $0 per month.
What does it do- turns conversations into conversions
Cost- Pricing starts from $79 per month
What does it do- It is landing-page development software. It will help you with website pages, landing pages, and popups quickly. It comes equipped with a drag-and-drop mechanism.
4.3. Referral Candy
Cost- Pricing starts from $49 per month
It is a customer acquisition tool and a referral marketer. The device will provide incentives to its customers if they promote your product within their network.
Here is a video by Marketing91 on Customer Acquisition.
Tips to Optimize Customer Acquisition Cost
You can optimize your CAC for the customer acquired by using the following strategies-
- Do optimization of your landing pages and CTAs
- Use strategies to optimize customer loyalty
- Make your existing customers your brand ambassadors
- Tweak your acquisition strategy as per your marketing spending priorities
Customer Lifetime Value & Customer Acquisition
Businesses use customer lifetime value (CLV) for measuring the average customer’s revenue generated by the business over the entire relationship with that customer.
When you compare CLV to customer acquisition cost, you will be able to estimate the profitability of a customer and the potential of the business for sustainable growth.
Customer Acquisition may sound simple attraction to customers but is a pretty complicated process. But by using the information and strategies above, you can generate a healthy customer base and build a stable and profitable business.
On a concluding note, we hope that paying heed to the above-mentioned customer acquisition strategies will help you in finding out, approaching, and fostering new and existing customer relationships.
What are your thoughts about the importance of customer acquisition in optimizing business growth, conversions, and sales? Tell us about your views in the comment section below.
Liked this post? Check out the complete series on Customer Management