What if I told you that the cost of acquiring new customers has gone up nearly 10% YoY over the course of the last 6 years? Well, according to Profitwell, that’s exactly what’s happened. Gone are the days where social marketplaces would organically boost your post simply because you made it, or even because it’s quality content. We’re firmly in the pay to play era and have been for a while already.
Marketing is more expensive and customers are less trustworthy of brands, meaning companies should just give up … right? WRONG! Instead of focusing on what’s frustrating, focus on what’s possible — with the right strategy, you can capture customer attention, create greater engagement and improve sales conversion.
In this guide, you’ll learn the basics of customer acquisition, how to lower the cost of acquiring new customers, and how to leverage your loyal ones. By the end, you’ll be able to build an acquisition strategy so agile, it’ll withstand the test of time and ever-changing trends.
Let’s drill down to the basics: What is customer acquisition?
Customer acquisition is the process of onboarding new customers or clients to your business. Customer acquisition professionals use specific techniques to get potential customers to take action. The goal of this process is to create a systematic, sustainable strategy to acquire new customers and grow revenue for the business.
A strong customer acquisition framework consists of: 1) attracting leads, 2) nurturing them until they become sales-ready, and 3) converting qualified leads into customers. The overall cost of these steps is referred to as your customer acquisition cost (CAC).
In many respects, this process is very similar to marketing in general — you’re looking for ways to showcase your brand and connect with customers. But there’s a difference: While marketing aims to build awareness, acquisition looks to drive action. The tactics related to driving action is how acquisition marketing really differs from the generating awareness piece of the marketing funnel. For example, let’s say you run an Instagram ad aimed at your target market. Metrics will help determine if your effort is working — you can track how many people have shared your ad, commented on it, etc. That’s marketing.
Acquisition, meanwhile, focuses on what happens after potential customers have already become aware of your brand and are considering making a purchase. If they’re willing to take action by purchasing your products or services, that’s acquisition. Put simply? Marketing concentrates on generating awareness & recognition — acquisition drives revenue.
Customer acquisition is important for businesses of any age, maturity and size. It allows your business to:
- Make money to meet costs, pay employees, and reinvest in growth, and
- Show evidence of traction for outside parties such as investors, partners, and influencers
Being able to systematically attract and convert new customers keeps companies healthy and growing — and investors happy.
Now that we know the difference between customer acquisition & acquisition marketing, let’s drill down into customer acquisition channels in more detail.
Leverage these acquisition channels
Customer acquisition channels are the platforms companies use to promote their products and services to new audiences — including organic search, organic social media, and email to name a few. The best acquisition channels for your business will depend on your audience, resources, and overall strategy.
Customer acquisition methods can be broken up into a variety of different types: paid and free, inbound and outbound, etc.
Organic Search: Organic search refers to the search engine results pages (SERPs), such as Google’s or Bing’s search results. Organic search marketing, by extension, refers to any efforts you make to rank highly in these results.
To leverage organic search as a customer acquisition channel, you must invest in search engine optimization (SEO). SEO, like social media, complements content marketing efforts by optimizing your content so it’s more easily found by your target audience.
Think about it: When you Google something, you typically click on one of the first results, right? The idea behind SEO is to create content that shows up high on the SERPs and makes searchers want to click on your content.
Thankfully, you don’t have to guess how exactly to use organic search for your customer acquisition plans. You can use tools such as SEMRush, Open Site Explorer, and Ahrefs to find the best keywords for your business and create powerful content that attracts potential new customers.
Paid Search: Paid search marketing (pay-per-click, or PPC) is advertising on search engines themselves. In addition, some PPC platforms, such as Google Ads, allow you to place display advertisements on partner websites and publishers.
Instead of organically optimizing your content, PPC allows you to create a search result and pay for it to show up alongside organic results, theoretically increasing your chances of being found by searchers.
To equip your content and ads to perform best in search engines, you can use tools such as Google Keyword Planner and Microsoft Advertising.
Organic Social Media: Social media marketing consists of two methods: organic and paid. Organic social media is most useful for boosting brand awareness, developing a company personality, and sharing content you’ve published elsewhere (like from your blog or videos). Consider it the gasoline for a fire where you’ve already started using other acquisition methods.
Organic social media also capitalizes on the “virality” factor, inspiring your customers and followers to help you advertise.
Paid Social Media: Leveraging paid social media may be a better tactic for your business, depending on your budget and audience type. Paying for social media advertisements and exposure is a surefire way to get content in front of your audience, without having to build up a network of loyal followers. (But don’t get me wrong — that’s important, too!)
Whereas sponsored posts on Facebook, Twitter, or Instagram simply get your content in front of the right eyes, Facebook Lead Ads allow you to advertise on social media and gather customer information such as email addresses and names. This information can make the difference between a follower and a lead, so if your business is looking to build its list, this might be the acquisition method for you.
Email: What do marketers do with all that customer information they collect through other customer acquisition channels? They build an email list, and they leverage that email list to connect with and convert their customers.
Email marketing might seem like an outdated acquisition method, but it’s a highly effective way to stay in front of your customers and promote quality content, product information, and discounts and events. Email is also a great way to simply connect with your audience, whether by sending a happy birthday email or a valuable promotional email.
Email marketing provides a direct line into your consumer’s inbox, unlike social media, search, or content marketing. Outside of direct sales, there’s no better acquisition tactic than email marketing that gets to the heart of the individual customer.
Referrals: Sometimes, you don’t need to look any further than your own customers for a proven customer acquisition method. Earning customer referrals is one of the most powerful ways to acquire new customers. While you can’t force your current clients to refer others to you, you can encourage this behavior in a few ways.
Creating a referral program is a surefire way to bring in new business through your customers. Offering incentives — whether credit, physical gifts, or monetary rewards — is usually the best way to motivate a customer to share about your company (and compensate them in return). If you consider a customer referral valuable for your business, you must provide something equally valuable as a trade.
While a structured, incentive-based program typically works best for B2C companies, B2B companies might have better luck asking for direct referrals from their customers.
Whichever referral strategy you choose, be sure to provide value first and ask questions later. Give your customers a reason to want to refer you — because they’re so delighted by your business, they can’t help but share.
Events: Events — like conferences, webinars, and trade shows — are a fantastic way to connect with interested prospects and acquire new customers.
Today, most events are online, which can make customer acquisition easier, as attendees have to register with their email addresses to attend (whether they pay or not). This information isn’t always easy or natural to capture when meeting prospects in person.
Plus, virtual events are a fun way to connect with prospects and sponsors from the comfort of your own home. If this customer acquisition channel is new to you, consider holding a small webinar or virtual summit, or renting a booth at a larger event.
Traditional Advertising: Traditional advertising channels — such as TV, radio, and print media — are a great fit for local businesses, as well as large businesses that have the budget for launching multi-city campaigns. Traditional advertising can be a powerful customer acquisition method if you properly target your ads and carefully consider the audiences that each publisher caters to.
You can typically get audience details from the publisher’s media buying guide. There, they’ll also delineate the accepted dimensions, as well as any other requirements for publishing or running your advertisement.
Now that we’ve gone over a few channels you can use for your customer acquisition plan, let’s cover a few specific strategies that fall under each channel’s umbrella.
Tips your brand can implement today to hedge against rising customer acquisition costs
Here’s a simple truth about marketing: You can always do better. You can always reach new audiences, market with better messages, and minimize associated costs.
Depending on your outlook, this could be good or bad news. There’s always something to learn and always something to improve upon. Better yet, you aren’t stuck with a subpar metric that your executives or investors aren’t quite happy about.
If you’re looking to improve your CAC, here are a few ways to minimize the cost of acquiring new customers:
- Improve your website conversion efforts. Enhance your calls-to-action, ensure your site is mobile and tablet responsive, optimize your landing pages, and clean up your copywriting. Consider A/B testing a landing page or shopping cart to see if a certain design or copywriting angle works best. These will make sure any customer acquisition methods you’re already employing are working as perfectly as possible.
- Boost the value of your current customers. This may involve releasing a new product or upgrade in which your customers can also invest in. User value can also skyrocket when they refer other customers or simply act as promoters for your business.
- Adjust and optimize your customer acquisition strategy. Take some time to structure your acquisition blueprint and see what each method is costing you. Where could you cut back on extra marketing spending or manpower? Costs for specific channels can rise over time, and you can always minimize CAC by finding newer, cheaper channels to invest in. This process also ensures your strategy reflects the most recent marketing trends and remains agile.
Closing thoughts
Customer acquisition is the lifeblood of any company, small or large. That means you can’t quite afford — no matter the cost — to give up on marketing to new customers. But research has shown that the key to growth lies not with your marketing or sales team but your customer service team, and your customers themselves.
That’s right — companies that succeed put their customers in the spotlight, for both acquisition and retention. Set up your acquisition strategy correctly, and you can expect to not only lower your customer acquisition cost but also increase your customer lifetime value.
Customer acquisition is all about acquiring the right customers that stick around — and help you acquire more. Instead of visualizing customer acquisition as a one-way funnel, start picturing your customer acquisition and retention methods as a flywheel: Always work to bring new customers on board, but don’t forget about them once they’ve joined the crew. Equip them to succeed, and they’ll go to work on your behalf.
