Peter Drucker once said "customer acquisition is the sole purpose of any business, whether big or small."
In that one statement, we cut straight into the heart of your business.
Winning new customers can be like a game. The question is, how do you win it?
With the amount of customer churn that we see in the digital age, it’s safe to say that the customer acquisition cost is deemed to increase.
However, with the right customer acquisition cost formula, you can crack the code of customer acquisition funnels and get creative acquisitions for your business.
Before we look into the top customer acquisition strategies to win your customer’s heart, let me help you understand the term “customer acquisition.”
If you already know about customer acquisition and would like to go through the top twelve customer acquisition strategies to win your customer’s heart, click here.
Customer acquisition is the process of obtaining new customers or clients for your business. The ultimate purpose of this exercise is to create systematic, sustainable acquisition strategies to keep up with the industry trends.
Irrespective of the size of your business, it is an essential factor that helps to run your business besides allowing you to make profits. In the past, customer acquisition was perceived to be all about executing costly unsustainable practices like advertising budgets or deep discounting strategies.
However, customer acquisition is much more than that. It aids you to achieve strategically to get customers to stick around after the first initial purchase.
According to Hubspot, the ultimate objective of customer acquisition is to become sustainable over a period of time, and I couldn’t agree more. It’s a crucial factor in creating a customer base for any business, as you cannot have loyalty without having customers in the first place.
This might seem quite obvious to you; however, several brands find it challenging to find a perfect balance between these two goals. In reality, the acquisition is the very first step in the customer acquisition funnel.
Every business faces opportunity cost. We cannot pursue every campaign, every channel, or
every market segment to pursue our efforts in acquiring new customers. Hence, during such times, marketers must decide where best to allocate their budgets and their marketing efforts.
Before answering your question about calculating “customer acquisition cost,” let me first define it for you.
Customer acquisition cost is the total cost of marketing and sales that you put in to acquire a customer. It’s one of the crucial factors in ascertaining whether your company has a viable business model that can yield profits by keeping customer acquisition costs at a bare minimum as you scale.
The challenge for the marketing manager is to balance out the total sales and marketing costs to acquire new customers with the revenue generated by each customer over their lifetime.
If you play it safe, you risk losing out on potential customers and all the future revenues they’re likely to generate. Overspend, and you’ll end up paying them to be your customers, which will result in failure.
Now, as promised, let me explain to you how to calculate the customer acquisition cost formula.
The customer acquisition cost formula is calculated by dividing the total cost of marketing and sales by the number of customers acquired during a specific period.
A prime example of this is if your company spent $4000 on marketing and sales in a year to reach 100 customers in the same year, their CAC would be $40.
Several reasons make the customer acquisition cost formula (CAC) very crucial for your business.
You need to engage and entice potential customers before a sale can happen. Hence, the customer acquisition funnel starts with capturing their interests. This is the very first step that precedes any marketing activity.
1. Recruit the right people
Your marketing team needs to be inventive, original, and adaptive - such that they remain flexible even when something goes wrong during the customer acquisition process.
Everyone in your company needs to be aware of your product, your customer acquisition process, and their roles throughout the process.
2. Understand the needs of your target customers
Again, before you engage with your target customers, try to ascertain who you are trying to engage with. This is a crucial step in the customer acquisition funnel. Once you understand the demographics of your target customers, you will be able to develop marketing strategies instead of blindly marketing and hoping for the right results.
3. Fix a budget
Customer acquisition can be a very costly affair if you do not ascertain how much budget you wish to fix for every new user acquisition. Starting the new user acquisition process before your brand or product is ready is not a wise decision.
In case you offer your customers an inferior product from the beginning while you’re still fine-tuning it, there’s every chance that you’ll lose out on those new user acquisitions - and it would be challenging for you to regain the traction.
Now that we have looked at how to start the customer acquisition process, as promised, in the next section, I will address the primary question, “ What are the best customer acquisition strategies to win your customer’s heart in the digital era?”
I have already touched upon the steps to start the customer acquisition process in the last section. These were the headstarts to improve your customer acquisition. Now, I will provide a list of some evergreen customer acquisition strategies that you can leverage to ensure that you never miss a chance to gain new customers for your business.
1. Ascertain the right target customers for your business
The very first customer acquisition strategy is to ascertain the right users or potential audience for your business. There’s every chance that your product can solve the problem of a certain demographic of customers. You simply need to discover who they are and focus on user acquisitions to get the right results.
If you do not have a particular target audience in mind, you’re simply restricting yourself from effectively marketing your brand. Until and unless you’re offering something of universal value, it’s much better to focus on finding a niche market where you can grow your products or services.
The question is, how to ascertain the right target customers for your business? One way to do that is by conducting comprehensive market research to confirm who and how you should market your product to win new customers.
For example, according to Invesp, SaaS companies can double their paying customers by simply offering a free trial without asking for credit card information.
Such information can be vital and is only possible if you are conducting market research with significant efforts. It’s the basic pillar that accounts for maximum creative acquisitions that you will ever get in the market.
2. Pick the right channels
Once you have defined your target audience, it’s time to pick the right channels for engagement and acquisition of potential customers you’ve identified through market research.
A customer acquisition channel is any place your customers meet your brand for the very first time. It can be through social media, organic search, or paid advertising. With the help of the right customer acquisition channels, you can bring in new customers.
Here are some of the most popular customer acquisition channels:
3. Different strategy for each channel
Now, after looking at the different customer acquisition channels, you might want to get on every channel possible; however, that can hinder your customer acquisition strategy. A prime example of that is, if you’re trying to reach out to customers in their early 20’s, you might want to find your audience on Instagram or TikTok. You might not get the required results if you put all your resources on Google Shopping Ads or Facebook.
While devising a strategy for each channel, ascertain:
Based on your customer acquisition strategy, you may realize that you don’t have to employ TikTok if your customers are primarily on Facebook. Or if you ascertain that you can say more through videos than with words, YouTube or Instagram may be more helpful.
Try and research the best strategies for each channel to get the most of your customer acquisition efforts.
4. Co-branding content and sharing leads
What you were doing alone will now be done by other brands as well. Confused?
I’m referring to co-branding, where a piece of content is promoted by two brands who have mutually agreed to do so. The scale of success in this strategy is quite massive as your content gets viewed by your customers and the customer-owned by the other brand.
You partner with a substantial customer-based brand; however, they are not your direct competitor. For example, do you remember the collaboration between Redbull and GoPro and their “Stratos” campaign?
Yes, I’m referring to this. In this co-marketing effort, while two brands promote a single content, they also share the leads. Both brands then employ leads generated by this collaboration. This way, it’s a win-win situation for both brands.
Here are some of the ways to promote and get customers through co-branding:
5. Easily accessible website
People will not care if your website has 1080p image sliders or embedded QR codes. The only thing that matters to first-time visitors is whether they can find what they’re looking for and then purchase it from your website. Hence, it’s highly critical to you to keep things simple and easy to use.
If you have an eCommerce website, ensure that you have a one-page checkout process to make things easier for your customers. Also, I would recommend you to have comprehensive product descriptions that inform customers what they’re getting when they order from you.
An immaculate product description is only the first step towards a great customer experience, true customer satisfaction, and customer success. The real test ensures that your order fulfillment process 100% guarantees that your customers get the correct product, in the right size, and on time.
You also need to keep a tab on the load time of the website. If you’re using a bulky web platform, chances are, you could have a higher bounce rate as visitors decide it’s not worth waiting for a page to load.
Here I would suggest you include live chat software on your website. Various reputed brands like Amazon and eBay have a customer-facing live chat integration that allows them to get higher customer satisfaction, increasing their revenue.
6. Publish content on external sites
One way to boost the organic search ranking of your website is by combining blogging campaigns with referral tactics for an acquisition rate increase. Relevant and authoritative sites might be an ideal platform for you to spread the word about your brand, increasing the volume of traffic you get from external sites.
7. Marketing on social media
Social media allows you to make some of the most creative acquisitions possible. It aids in building brand awareness. It also amplifies your content marketing efforts by sharing content on places where your target audience hangs out, like Facebook, Twitter, LinkedIn, Instagram, etc.
However, marketing on social media seems to be a hit or miss proposition. 13% of marketers believe that social media marketing is one of the most overrated forms of digital marketing available. Regardless, 87% of marketers seem to be benefiting from their social media marketing.
To acquire customers from social media, leverage the interests of your target audience in your content or product to help spread the word about your brand.
8. Cross-channel acquisition
Digital marketing may be utilized and reported on in separate channels and platforms. Hence, it’s imperative to unify your customer acquisition strategy across all of them. In case you’re reaching out to your target audience on more than one channel, you’re more than likely to influence their behavior on another channel.
A prime example of that is someone who just saw your marketing email might then search for a product like yours on Google.
In this particular scenario, it becomes essential to ascertain the search terms these customers use to discover your site. This will help you get better informed about your paid and organic search strategy.
You can, then, use this strategy to target the keywords with search ads or with specific pieces of content - assuring that they come to your site instead of going to your competitors.
Another case is, you may find that you’re getting lots of website traffic from a few select keywords with your Google Search Ads. You could then employ this to craft messaging in your Display or Facebook ads - designed to better resonate with your target audience.
Apart from these insights, you need to comprehend how many conversions were influenced by your efforts in any given channel - even if the ad did not immediately trigger someone to purchase.
In such a case, it would become essential to ask yourself a couple of questions to comprehend the cross-channel customer journey.
For example, you may have got 100 people to purchase your product. If that’s the case, ask these questions to yourself:
All these questions will help you perform cross-channel customer acquisition.
9. Advertisement on different forums
If you can get your online presence felt on a question-based forum like Quora, it’s enormous. By answering questions and talking about your product, you can make yourself known as an industry expert and attract new prospective customers.
Since discussion topics range across various areas, there are “n” number of opportunities to be seen by simply answering questions concerning your brand.
Just to give you the amount of reach that you can get by answering on Quora, Jason Lemkin, CEO of SaaStr, has responded to “two thousand” questions on Quora, and he ended up generating more than 1 million monthly views as a result.
To find the right set of questions to get the largest return of your time:
While answering questions, do not simply post a link to your content, as it’s more than likely to be removed. And that’s not the way to build trust anyway.
However, you can always include links within your answers on occasion. But, ensure that your answer provides an solution to the readers without making them visit elsewhere.
10. Use email marketing and keep track of the analytics
Email marketing is an ancient practice that is still applicable. It enables you to get in touch with the customers directly. Thus, it has become a vital component of any customer acquisition strategy.
The very first step in email marketing is to get an individual’s verified email address and information. This can be done in different ways:
Once you have the desired email address, you’re well aware that you’re interested in your company. The only thing being, you follow “US CAN-SPAM” laws which allow you to market directly to them and share information about your new products or sales.
Through email marketing, you can learn about an individual’s interests by monitoring click-through rates on different email components.
Even unsubscribing offers invaluable information to your email strategy. By understanding which content resulted in what response, you can continually improve your own customer acquisition strategy for better future performance. Just make sure that you keep track of these numbers.
11. Commence referral programs
If someone recommends you, it goes a long way in establishing your trust factor amongst the other person. Referral programs do the same thing. According to research conducted by Neilson, “Word-of-mouth referrals are one of the most effective forms of marketing.
People trust those whom they know, so when a friend tells them to check out a new product or brand, they listen.”
To use referrals as a new customer acquisition strategy, you need to make it easier for those loyal customers to recruit their friends. This can be done by setting up a referral program in which your existing customers are rewarded each time they recommend someone new to make purchases from your business.
Apps like Loyalty Lion, Smile.io, and Referral Candy offer ways to encourage customers to refer friends through marketing emails, discounts, and incentives for both customers and their newly recruited friends.
12. Attractive offers and discounts
One of the most powerful ways to break into a competitive marketplace is by using attractive deals and discounts as a tool to lure new customers. You can employ this technique to run promotions or offer discounted pricing to improve your competitive footprint in your niche.
Also, customers love promotions and discounts - even if it’s in a relatively mundane field of B2B marketing.
With the help of deals and discounts, you can make reluctant buyers make easy decisions and create viral word-of-mouth marketing for your brand. One of the other alternatives is to offer incentives in your pricing plans for a limited span of time. Experts have given a new name to this type of acquisition technique: penetration pricing.
In this acquisition technique, you outgun your competition by offering products at a lower price during the initial launch phase or for a short time.
However, be very careful while practicing this technique since pricing reflects on your brand positioning. For example, if you offer low prices all year round, your customers might perceive you as a low-price vendor.
Ahrefs.com - an SEO and marketing analysis software - is a SaaS company that does things differently. While its closest competitors like SEMRush and Moz offer generous free trials on their products, Ahrefs offers its users a $7 trial for seven days.
A carefully planned pricing incentive resulted in Ahrefs earning twice as many users to try their platform once they switched from a free trial acquisition model to a $7 day trial for seven days.
Customer acquisition is not a one-day job. You need meticulous planning and execution. It’s equally essential for you to deliberate the best ways to drive and convert visitors into customers on your website.
You must select the right channel to have a good product fit and then test the content to wow the customers to convert quickly.
You also need to be diligent in how quickly you acquire customers, what channels you employ, and executing long-term strategies that will keep your customer acquisition costs well below your customer value.
Apply these top customer acquisition strategies today to help your online business grow by manifolds.
I hope you enjoyed reading this guide on top customer acquisition strategies to win your customer’s heart as much as I did.
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