Customer Acquisition – Definition, Strategies and Tools
⏱ Reading Time: 12 minutes
Your business can’t survive without customers, right?
In the last couple of decades the cost of customer acquisition has increased by over 50%. This however is not the reason to stop the whole process. It’s an encouragement to be even more creative along the way.
Businesses can not survive without customers. However, the most efficient and cost-effective customer acquisition methods are rarely obvious, especially if your business is new.
You may have the greatest product or service, the best customer support, and an efficient business model. But without a growing customer base, your business won’t evolve and produce higher profits.
What is Customer Acquisiton?
It is the process of finding and attracting new customers or clients for your business. You’d probably agree that it’s one of the key processesin a company of any size and type.
Customer acquisition brings much needed financial benefis, which enable your company to grow further, invest, cover business expenses and reinvest.
And what are the most effective customer acquisiton strategies? Let’s take a look.
Common Customer Acquisition Strategies
A customer acquisition strategy involves any activity in your business that brings in new clients and customers.
Traditionally, managers only considered mass-level marketing as a successful way to get new customers. These strategies consisted of mass-marketing and direct marketing advertising through the following media:
- ‘Snail Mail’
Picture 1. Common customer acquisition strategies
These were effective mediums to target ‘qualified’ customers rather than ‘interested’ parties.
Meanwhile, marketplaces have become overcrowded. In 2018, 105 billion emails were sent daily. This number has increased to over 200 billion as of 2020.
That means it’s becoming increasingly difficult to stand out in front of your target audience.
You want to entice customers to consider your offer, buy from you, and stick around as paying customers. And to do so, you need to differentiate yourself from other businesses competing in your market.
You can achieve that by following customer acquisition strategies below:
Content marketing is a cost-effective way to build relationships with your audience. It helps your messages stand out from ‘false’ and ‘untrustworthy’ advertisements that they see daily.
Content marketing is more effective and 62 percent less expensive than other marketing methods. Additionally, all kinds of businesses can benefit from content marketing. Over 50% of businesses today use some form of content marketing.
Every business has something to say about how they can solve their customer’s problems. Businesses can use different content types to deliver value to their audience:
- Blogs posts
- Content upgrades
Your content should always be of high quality. Valuable, informative, and engaging content will give your audience the information they need to make a buying decision.
Also, don’t forget about SEO or Search Engine Optimization. It improves the rankings of your content in search engines and makes your content more visible to your target audience.
Picture 2. Paldesk offers a range of eBooks to download
The Main SEO Tactics
- Using industry-related keywords within the content.
- Obtaining backlinks from relevant and authoritative websites.
- Optimizing a site for mobile devices.
If your site and content are fully optimized, your audience will easily find you when they look for solutions to their problems through search engines.
However, you don’t have to constantly come up with new content. You can boost the search engine rankings of your older content in a couple of easy steps.
Simply changing the date of one of your blog posts and republishing it will increase its Page Rank. This will help it get a boost in the search engines.
Another easy method to rank old content is to update pieces of content with stats, references, and information. Then, you can send it out to social media, email lists, and online forums to earn extra backlinks.
Social Media Marketing
Social media marketing is another great method to use in your customer acquisition strategy. First, it helps to build brand awareness. Second, it amplifies your content marketing efforts by sharing your content on places where your audience hangs out online (Facebook, Twitter, Instagram, etc.).
However, social media marketing seems to be a hit or miss proposition. 13 percent of marketers say that social media marketing is one of the most overrated forms of digital marketing available.
Regardless, the other 87 percent of marketers must be benefiting from their social media marketing. Otherwise, they would have deemed it as overrated too.
To acquire customers from social media, leverage your audience’s interest in your content or product to help spread awareness about your brand.
Giveaways and referral programs are effective ways to get your audience to share your stuff and business with their followers.
A giveaway means offering something for free in return for a share or shout-out on social media. That way, you create a group of advertisers who will promote your products, services, and content to their followers.
You can also make your product go viral by offering an incentive that benefits both the referrer and the referral.
For example, Dropbox, a file storing and sharing site, offers those who refer a friend an extra 500mb of storage. Additionally, they offer an extra 500mb of storage to those who were referred into their membership program as well.
A referral program creates more incentive for social media users to share your offers even if they are not currently part of your audience.
Picture 3. Dropbox referral program
Instead of immediately trying to convert your audience into customers, you can turn them into leads first.
Email marketing is a popular and effective customer acquisition strategy. This comes as no surprise, considering it boasts the highest ROI out of all marketing strategies with a whopping average of 4,400 percent.
It’s more cost and time-effective to get your audience on your email list first before trying to convert them. Once they’re on your list, you can market to them for life, or at least until they unsubscribe.
However, you need to keep them engaged long enough to convert them into customers. That’s why you should regularly provide them with valuable content and offers.
Increasing Interest and Engagement
You can offer them some of the following value-oriented items:
- Industry-based content
- Product information
Email marketing also helps build a long-lasting relationship. This is because you can send out highly personalized and customized emails such as birthday discounts or targeted offers.
To do this, you’ll need to segment your subscribers based on which stage they are in the customer acquisition cycle.
If someone has just opted into your list, send them engaging emails that further build trust. Later, you can start pitching them your products or services.
Subscribers that have been on your email list for a month or more are better suited for product information messages. They will benefit from content that helps them make an informed buying decision.
Lastly, those that have received all of your product information emails are best suited for promotional emails. By this time, they are more likely to trust you and the information you have given them about your products.
But what about those subscribers who do not open your emails?
You can still convert them into customers, but you have to do it quickly.
About 48 hours after sending an email message to your list, look for subscribers who got your email but never opened it. You can find this information with most email marketing software.
Then, resend an email with a different subject line to those subscribers who did not open your email the first time. You can get a 30 percent increase in open email rates and click-through rates by using this tactic alone.
Measuring Your Marketing Strategies
So far, we have looked at marketing strategies you can use in your customer acquisition process. Naturally, you’ll also want to measure if those strategies are profitable.
Customer acquisition cost (CAC) is a measurement of how much it costs to bring in new customers through marketing, advertising, and sales. Some of the CAC costs include:
- Marketing costs
- Advertising costs
- Event costs
You can use a simple formula to figure out CAC:
CAC = MC (marketing costs) / CA (customers acquired)
You can also use other metrics besides marketing costs to figure out CAC. For example:
- Wages for marketing and sales.
- Software for marketing, advertising, and sales.
- Any outsourced services to acquire new customers.
- Overhead costs for marketing and sales.
Other formulas you can use to measure your marketing strategies are:
New Customers Added / Total Customers
Sales Growth – Marketing Investment / Marketing Investment
The former shows how many new customers your marketing strategy brought in a given time frame. The latter uncovers the ROI or how profitable your marketing and advertising efforts are.
Improving Customer Retention
You can use many methods to lower the cost of customer acquisition. Nevertheless, the most effective one is to keep already acquired customers happy. It costs five times less to keep an existing customer than to acquire a new one.
The following tips can help keep your customers happy and loyal to your brand:
Understand Why Your Customers Are Leaving
This is the first step in developing strategies to keep existing customers on board.
To figure out why your customers are leaving, you should ask them. You can obtain customer feedback in two ways:
- by email
- through surveys
When a customer unsubscribes or terminates their account, send them an email asking why they decided to leave. This will give you insights into what you should do to increase customer satisfaction and loyalty.
You can also send customers a survey after they cancel their account or subscription. Tailor your survey to reflect the reasons for cancellation. These can be, for example, ‘poor customer service’ or ‘insufficient loyalty programs’.
Leave sufficient space for your departing customers to enter additional comments. That way, they can give you more detailed reasons for why they left.
Work On Customer Experience
Almost 70 percent of customers leave due to poor treatment. Luckily, there are some ways you can increase customer experience:
- Using customer feedback to fix customer retention problems.
- Working on specific parts of your business that will help increase customer retention.
In the first case, your customers tell you what the problem is. Figuring out what to work on is, therefore, quite simple.
The second scenario takes some investigation. You need to figure out which aspects of your business requires improvement to increase your customer retention rates.
To get started, you can follow some general guidelines. First, make the customer onboarding experience as smooth as possible. Provide all the information your new customers need to use your product effectively.
To improve customer retention rates, also consider updating your customer service protocols. When deciding whether or not to do business with a company, 90 percent of American consumers view customer service as an important factor.
Make sure your customer support team is accessible. Incorporate a live chat option or a phone number on your site for customers to contact you.
One solution is to add more employees to your support team. This may be more expensive upfront. However, increased customer retention will result in a steady stream of sales that will make up for the costs.
Picture 4. Paldesk live chat
Build Stronger Customer Relationships
There are other ways you can build a stronger bond between your business and your customers.
- Providing a customer loyalty program.
- Building a community.
Providing perks to existing customers in the form of a customer loyalty program can increase business by 54 percent.
If your customer reward program isn’t congruent with your products and services, its value will be lost. It won’t entice your customers to stay on board and continue to buy from you.
Picture 5. Dunkin’ donuts loyalty program
Building a sense of community is another great way to instill and grow loyalty to your brand.
One great community-building method is to host events and gatherings for your loyal customers. However, that’s expensive and time-consuming. Alternatively, you can build a community online through social media.
Starting a Facebook group around your business can keep your customers engaged and feel like a part of your business family.
Customer Acquisition Tools
Acquiring a new customer is often a long, expensive, and arduous task. Luckily, there are plenty of tools available that make acquiring customers easier.
Content Marketing Tools
The following tools can simplify your content marketing tasks:
- BuzzSumo helps with topic research and finding influencers that will help market your offers.
- Trello: teamwork collaboration tool.
- ClickFunnels: the most popular sales funnel builder on the market.
- Canva: free design tool for creating eye-catching images to use with any form of content.
- Uberflip: a collection of content marketing tools that helps improve ‘content experience’.
- SEMRush: an all-in-one tool for search marketing.
- Ahrefs: helps with outranking competitors in search engine results.
- Grammarly: spelling and grammar tool.
The above list gives you the basic tools that can help your content become more relevant, more visible, and professional.
Picture 6. Ahrefs
Email Marketing Tools
There are various email marketing tools for businesses that help capture and manage leads. Some of the more prominent lead generation and lead management tools are:
- Salesforce: CRM (customer relationship management software) with built-in lead capture automation
- AWeber: one of the first autoresponder tools on the market.
- GetResponse: email software provider that collects and manages leads.
- MailChimp: another email software provider that has a user-friendly dashboard.
- MailGenius: a free tool that inspects emails for spam triggers.
- Flashissue: one of the best tools for creating and emailing newsletters.
- ToutApp: considered as the ‘Swiss Army Knife’ of email marketing tools.
- YesWare: focuses on sales teams who need to send mass mailings.
- Voila Norbert: email finding and email verifying tool.
The above list shows you what some email marketing tools can do for your business. They can assist with capturing, storing, and managing leads. They also enable sending relevant and timely email messages that turn leads into customers and customers into repeat buyers.
Social Media Marketing Tools
There are many social media marketing tools that can be used to increase brand awareness and boost your content marketing.
Here are some of them:
- Tweriod: a Twitter-based tool. It lets you know when your audience is online so you can reach them at that moment.
- MashShare: creates social share buttons on websites that readers can’t ignore.
- HootSuite: automates and minimizes the time it takes to share content on different social media platforms.
- Kred: connects brands to influencers willing to share content with their followers.
- Audisense: social intelligence tool that helps uncover new targeted audiences.
- Socedo: automatically finds people on social media who fit a brand’s buyer persona.
- AgoraPulse: social media scheduling and analytics tool.
- TailWind: helps create content for Instagram and Pinterest.
- SproutSocial: all-in-one social media marketing tool.
- Buffer: social media content curation tool with auto post and follow up features.
These tools can help you manage and optimize your social media posts. They can also assist in uncovering audience data and behaviors crucial to your social media marketing campaigns.
Smart customer acquisition is not only about getting new customers. It’s also about getting customers that are going to stick around for the long-term.
The above strategies, tips, and tools can help you build a smart acquisition plan to lure in buyers and keep them engaged long enough to become repeat purchasers.
Fresh leads, repeat buyers, and loyal brand ambassadors are the real secret behind steady and consistent business growth.
Heather Redding is a part-time assistant manager, solopreneur and writer based in Aurora, Illinois. She is also an avid reader and a tech enthusiast. When Heather is not working or writing, she enjoys her Kindle library and a hot coffee. Reach out to her on Twitter.
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