What Is Customer Acquisition?
Customer acquisition is the process of attracting leads and turning them into paying customers. It involves identifying who is most likely to be interested in your product or service, introducing them to your business, and then persuading them to make a purchase.
How To Develop Your Customer Acquisition StrategyNow that we understand customer acquisition and how we measure it, let's look into developing an effective customer acquisition strategy. Here is a simple 7-step framework to build your own:
1.) Identify Your Ideal CustomerIf your company already has customers, start by analyzing their demographic and psychographic characteristics. Look at their age, gender, location, interests, values, job titles, and more. This data will be available on Google Analytics, social media accounts, and other marketing channels. Once you have the basics down, consider what makes your customers unique and why they may have chosen your business over competitors. Or, if you have the resources to do so, conduct customer surveys and interviews. Ask about their needs, preferences, and perceptions of your products or services. And if you do not have any existing customers, begin with market research. Try to understand the market, customer behavior, and recent trends. Read industry reports, join forums, talk to experts, and get in front of as many actual buyers as possible. Use this knowledge to create a profile of your ideal customer persona. The profile should help answer questions like:
- Who do we serve?
- Where do they spend time?
- What are their goals?
- What pain points do they have?
- What role do we play in their lives?
2.) Define Your Unique Selling Proposition (USP)Every business should have a clear USP — a distinguishing characteristic, feature, or benefit that sets it apart from competitors. To determine yours, follow these three steps:
- Analyze your competition: Look at what other businesses in your niche offer and how they market their products or services. Search their reviews, social media comments, and platforms like Reddit to find candid customer feedback.
- Identify your strength(s): Ask yourself why your product or service is better than others. This could be your expertise, special production processes, quality standards, or top-notch customer service. Whatever you choose, make sure that your competitors cannot match your specific strength. Potential customers should be able to readily identify that you offer a unique feature, a lower price, faster delivery, or something else of value.
- Distill your message: From your list of strengths, craft a concise USP. This one-sentence statement will reinforce why a customer should choose your business over another. Keep your USP specific and benefit-focused. A broadly-applicable statement may sound safe, but it won't motivate action. Instead, hone in on your ideal customer persona and explain how you can support them.
3.) Create A Data-Driven ApproachMarketing without data is like driving with your eyes closed — essentially guessing in the dark. Without measuring your efforts' success, you won't know how to adjust your customer acquisition strategy to push further growth. Fortunately, there are plenty of analytics tools available today. Most digital channels have built-in data analytics capabilities, and you can supplement these with third-party solutions depending on your specific customer acquisition strategy. For example, Facebook advertisers should take advantage of the native Facebook pixel. Shopify merchants may want to use Google Analytics and an attribution platform like TripleWhale. And SEO campaigns call for Google Search Console and a tool like Ahrefs or Moz to track rankings. These data providers can help you better understand the performance of your customer acquisition efforts and track everything from campaigns and budgets to website visits, leads, sales, and customer behavior. But simply gathering data is not enough. When implementing your analytics platforms, deciding which metrics are most relevant to you and your business goals is important. Beyond blended CAC, which averages your customer acquisition costs across all marketing channels, you may also want to track:
- Total website visits
- Conversion rates
- Leads generated
- Return on ad spend (ROAS)
- Channel-specific CAC
4.) Explore Multiple ChannelsTesting a wide range of marketing channels offers several benefits. Businesses can reach a broader audience, diversify their customer bases, determine which channels perform best, and create a unified customer journey. From Facebook to LinkedIn to radio and print, there are hundreds of customer acquisition channels to choose from. To get started, here are the most popular categories to consider:
- Search engine optimization (SEO): Optimize your website performance and content to improve your visibility in search results. Build a keyword cluster, write helpful and engaging posts, and acquire white hat backlinks from relevant websites. As Google and other search engines determine that you have topical authority, your rankings and search traffic will improve.
- Paid advertising: Use targeted ads to reach a specific audience, drive website visits, and expedite the customer acquisition process. Social networks allow you to narrow your target audience based on demographics and perceived interests. Search ads are great for appearing in front of people already searching for a product or service like yours. And display ads can help to remind potential customers of unfinished purchases.
- Social media marketing: Leverage social networks like Facebook, Twitter, Instagram, and TikTok to introduce users to your brand, nurture leads, and convert customers. Visual content such as lifestyle imagery, short-form videos, and influencer collaborations can help you attract attention and establish an organic presence.
- Content marketing: Create valuable content about your products or services, the problems they solve, or the industries they serve. Publish blog posts, eBooks, infographics, videos, and podcasts, and distribute them widely. The goal here is to build trust, credibility, and brand loyalty, which can lead to lower customer acquisition costs in the long run.
- Email marketing: Offer exclusive deals, discounts, or content in exchange for opt-ins to your email list. Then, send personalized emails to prospects and customers with information about upcoming promotions, new products, or industry updates. With the right copy and design, email campaigns can help you convert leads into customers at an economical CAC. But don’t forget to follow email security best practices to avoid the spam filter and protect your email list from cyber threats.
5.) Build Strong PartnershipsOne of the most overlooked strategies for customer acquisition is to leverage the power of partnerships. This involves teaming up with other businesses, influencers, or even your own customers to access their networks and increase your reach. Here are a few simple ways to build partnerships:
- Strategic alliances: Collaborate with another business in your industry that serves a similar target audience. You can share resources, co-brand products, or cross-promote each other's services to tap into each other's trusted customer bases.
- Joint ventures: Instead of simply aligning incentives, create an entirely new business in partnership with another company. Joint ventures are used to create new services, expand into new markets, or share distribution channels. This can help businesses leverage each other's strengths, pool resources, and share common risks and rewards.
- Referral programs: Reward existing customers for referring their friends and family to your business. You can accomplish this through rewards, discounts, merchandise, exclusive events, and more. Because these referrals come from trusted sources, they often result in higher conversion rates and lower customer acquisition costs.
- Affiliate networks: Partner with influencers, marketers, and other businesses who will promote your products or services in exchange for a percentage of each sale. Affiliates can generate substantial revenue when adequately incentivized. So don't be afraid to offer as generous of a commission as your margins allow.