Customer acquisition guide; Customer acquisition is a significant pain point for many business owners. What’s even harder is developing a consistent way to bring in new business.
Your goal should be to establish a customer-winning system on almost autopilot. However, saying this is easier than doing it.
This guide will help you get started.
What is Customer Acquisition?
Customer acquisition is the process of bringing in new customers for your business. The aim of every business is to create procedures that make acquiring new customers simple and systematic. Unfortunately, many small businesses and freelancers struggle to develop a process to bring in new customers. A crucial part of the puzzle is the ability to measure a business’s customer acquisition cost. In the digital marketing space, this is often referred to as “CPA” or “cost per acquisition.”
Whether you’re using paid advertising, organic reach, print media, radio, TV, or anything else, the concept holds true. You need to know how much you should spend to acquire a customer. Once you determine that, scaling your marketing becomes much easier because you’ll know you can pump more dollars into your campaigns and what you can achieve for customers.
What’s the Purpose of Customer Acquisition?
The purpose of customer acquisition is self-explanatory. If you don’t have customers, you don’t have a business. Without consistent customers, you won’t have a steady business.
A small caveat here is that businesses need to focus on retaining customers as much as they do on acquiring them. Retention is about efforts to keep the customer, rather than going through the endless loop of acquiring new ones. Increasing your retention rate by just five percent can boost your profits by up to 95 percent.
When you combine customer acquisition and retention, you have a recipe for success. Here’s why:
It allows you to earn the money you need to cover costs and pay employees, reinvest in your business, and get better results for your customers. It demonstrates steady growth and success to partners, investors, and external influencers. Continually attracting new business to your company makes everyone happy, but it’s not the ultimate goal. The aim is to hold onto your existing customers for as long as possible. While acquiring new ones might cost money, retaining them doesn’t.
Customer Acquisition and Lead Generation There might be a bit of confusion between the two, but the distinction is simple: lead generation is a step in the customer acquisition conversion funnel. A person or organization needs to become aware of your business before they can consider making a purchase. This often happens as a result of a potential sale.
For instance, let’s say your business runs a Facebook ad. This typically targets cold traffic (people who haven’t heard of you before). They see your ad and pause for a second to look at it. They’ve now become a lead, and they’re not cold traffic anymore because they’re aware of you.
Perhaps they click on the ad, fill out a form, and start a conversation with you. All of these are steps in the general customer acquisition funnel. Generating a lead is just one step in that.
Customer Acquisition Guide
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Customer Acquisition Plan
Now, let’s discuss some
actionable steps to develop the best customer acquisition strategies.
Define Your Customer Avatar
The first step for every business (even before you have a business!) should be creating a customer avatar or buyer persona. This is who your ideal customers are, what they like, their problems, and demographic information.Having a good idea of who a business’s customers are is a fantastic strategy. For example, if you’re selling anti-aging cream, you’ll have a clear target audience.
Your target could be women over 40 who have an advanced skincare routine but need a bit more help. They might be upper-middle-class and can’t afford surgery or cosmetic procedures, but they can afford your dream.
Knowing exactly who your target is will make it much easier to speak their language with your ads, images, and products.
Set Goals
Once you have your customer avatar, note down some goals and objectives. What are you trying to achieve with your marketing efforts? Here are some examples: Awareness: Are you trying to spread awareness about a cause, shed light on something, or introduce yourself to a specific audience? Foot Traffic: Does your business require people to physically come to a place? Phone Call: Do you need to convert online traffic into a phone inquiry? Form: Is your traffic still at the “getting to know you” stage? If so, you might just ask them to fill out a form. Conversion: If your traffic already knows who you are, you might be trying to convert them into a sale. Whatever your goal, make sure you have one. The clearer your direction, the easier it will be to communicate the right message and get your audience to take the desired action.
Choose a Platform or Avenue
Once you understand who your target audience is and what you want them to do, you need to decide on the method to reach them. There are plenty of customer acquisition channels, both online and offline. Here are some of the most popular:
Content Marketing
Content marketing is a fantastic long-term way to build customer relationships and drive traffic to whatever you’re trying to accomplish. Better yet, there’s no one-size-fits-all solution because you can tailor content to your niche.Remember, content marketing is more than just writing a blog on your website and waiting for people to find it. You need to understand basic SEO, know it’s a long-term strategy, and that it might take months to see results.
Social Media Social
media provides multiple avenues to gain customers. You can use paid ads, or you can organically grow a follower base, slowly building by sharing posts and engaging with people to start conversations.
I love using social media as naturally as possible, and this comes from “being social.” Start conversations, send messages, and provide value. They’ll respond. Seventy-three percent of marketers find social media to be “somewhat effective” or “very effective” in their business. It all starts with a conversation.Paid Advertising
Whether it’s PPC on Google or Facebook ads, paid advertising is a great way to immediately get in front of the right target audience. Just remember that Google Ads might have a 100% CTR, but it requires understanding how to do it right.
Set a Budget
If you’re planning to be successful, you need a budget and a customer acquisition cost formula. Without a budget, marketing can quickly become more expensive than anticipated.
Start with a small budget and scale up as you experience success.Optimize and Adjust
When you have the chance to gather data on how people are interacting with your ads, content pieces, etc., use this data to optimize and adjust as needed. For instance, if you find that a specific demographic converts the best in a social media ad, consider allocating more ad spend to them and less to those who aren’t converting.Successful Customer Acquisition Examples
One of the best ways to understand how to implement and measure customer acquisition is to see other companies do it successfully. Here are some examples:
Interactive Content A great way to direct people to your site is through interactive content such as quizzes, tests, and even product selection recommendations. This not only makes it fun but keeps people on your site longer, which looks good to Google.Keep in mind that your content needs to be engaging and unique. The internet is a very competitive space, and you can’t just throw something out there and expect people to read it and respond.
Turbotax
Turbotax is a great example of using multiple platforms to get their message across. You’ve likely seen their ads somewhere, talking about how their services are free for individuals and will always be. If you understand neuro-linguistic programming, you know that “free” is a big trigger word.
Make sure you’re offering enough value in exchange for what you’re asking customers to do. Advertising has shifted, and it’s not as simple as telling people what you do. You have to provide value.
Referral Marketing
One of the best ways to get more customers is to get your customers to bring them to you. Referral marketing is a powerful method because it’s not very costly and rewards customers you already have, which can help increase your customer retention rate.
This method is particularly useful when you’re starting out and looking to build a network and establish credibility. Offer something to your customers for bringing potential customers to you.
FAQs About Customer
Acquisition Below, take a look at some frequently asked questions about customer acquisition.
What's a good customer acquisition cost?
A good customer acquisition cost is whatever you need to be profitable. This will vary from business to business. The only important thing is that you're spending less to acquire a customer than what they'll pay you. Don't forget your business costs.
How do you manage customer acquisition?
In many businesses, there are individuals or whole departments responsible for this. Of course, it can be challenging for small businesses, so outsourcing might make more sense. Is retaining a customer more expensive than acquiring one? Acquiring new customers is considered the "startup killer" for a reason. In fact, retaining is much cheaper than acquiring, but you can't have one without the other. Make sure you're focusing on both.
What's the acquisition rate?
Calculate this number by dividing the total number of people who participated in your campaign by the total number of people who saw your campaign.
Summary of the Customer Acquisition Guide There are many ways to approach customer acquisition. While many methods lead to the same destination, there’s no one-size-fits-all solution. What works well for your business depends on finding the right marketing method and consistently applying it.
Most importantly, understanding your customer and your goal is crucial. Once you’ve done that, the rest falls into place.
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