Customer acquisition is the process of bringing new paying customers into your organization.
● Customer acquisition models vary by organization because different organizations have different definitions of acquisition.
● An acquisition model needs to match actual business results. A key indicator that your model needs to be refined is if your results are showing a different outcome than your model predicts.
● One of the best practices for customer acquisition is to reevaluate your model on a regular basis. Often, people don’t behave in the way they’re expected to. It’s important to reevaluate your model in case user behavior has changed, or in case your marketing tactics have changed.
Matt Skinner is currently a senior product marketing manager at Adobe, where he oversees product development and marketing for Adobe Real-time Customer Data Platform and the Adobe Audience Manager data management platform. Before bringing his talents to Adobe 5 years ago, Matt worked for 3 years as a senior marketing manager of demand generation at Levi Strauss. He has almost 15 years of marketing and communications experience.
Q: What is customer acquisition?
A: Customer acquisition refers to any time you’re obtaining or bringing in new customers for your organization. This is a key way to grow your business.
In the context of data management, and especially in ecommerce and content marketing, customer acquisition includes the different tactics you use to reach potential customers who seem like strong candidates for the products or services you’re selling. An example of a customer acquisition tactic would be an organization buying an email list of users and employing email marketing efforts about relevant products to increase their number of customers. Another example would be a sporting goods company buying advertising on sports websites in order to attract new customers that are interested in sports.
Q: What does a customer acquisition model look like?
A: A customer acquisition model varies by organization because different organizations have different definitions of acquisition. In some cases, organizations might run a campaign just to acquire email addresses, for example, so that they can do future marketing to those potential customers and call that customer acquisition. In other cases, some organizations might not consider it acquisition until a customer actually makes a purchase. The way your organization defines acquisition will determine the layout of your model.
A customer acquisition model also varies by tactic because some tactics are better than others at achieving certain objectives. For instance, with digital advertising, banner ads on a website or Facebook ads are good at getting attention and getting potential customers to visit your site. Even encouraging referrals through word-of-mouth is effective, but unless somebody has already heard of your brand or engaged with the content on your site, they probably won’t convert right away. The types of tactics you choose to employ will affect your model.
Q: How do you go from customer acquisition to customer retention?
A: The first time somebody engages with your site, you may have very limited data about who that person is and what their interests are. Even when you acquire that person as a customer, you might not have enough data to market to them right away. The best way to retain existing customers is to develop a relationship with them so that you can enrich their profiles with additional data points. More data allows you to have a complete view of who your customers are. You can use this data to market to them appropriately. Some organizations refer to a full customer profile as “the golden record,” or the 360-degree view of a customer. Having a complete customer profile helps you optimize marketing campaigns for that customer’s experience.
Q: What is the process of customer acquisition?
A: The first step is exposure. For this step, you might have an awareness campaign to encourage your target audience to learn more about your company. After the campaign, you’ll have a subset of people who move on to your website. Let’s say that one of these people wants to learn more about the products and services on your site and get to know your company. They may make a purchase or provide an email address to receive your newsletter or special offers and become part of your customer base. You now have data about that person so you’re able to market to them in the future. You’ve acquired them as a customer, or at least as a prospect.
Q: What are some customer acquisition metrics?
A: For B2B marketing, marketers look at marketing qualified leads, sales qualified leads, and total leads generated.
For B2C companies, marketers will look at things like reach, engagement, conversion rate, and purchase metrics. But these types of metrics look different for every organization. For one company, engagement could be a potential customer visiting three pages on their site. For another company, engagement might be a potential customer visiting a specific page on their site. Each company is going to have their own success metrics and KPIs based on how they conceptualize these metrics to work for their business.
Q: What are some indicators of a poor customer acquisition model?
A: An acquisition model needs to match actual business results. A key indicator that your model needs to be refined is if your results are showing a different outcome than your model predicts. This is one of the reasons why it’s important for your marketing team and your data team to communicate about business objectives and results. Otherwise, you might have inconsistencies between your model and your data.
Q: How do you change your customer acquisition model?
A: There are a few different ways to change your customer acquisition model. One way is to look at where people are losing interest with your company early on. For example, say you’ve noticed that a lot of website visitors are coming from search engines, but not many of those visitors are taking additional action. It may be wise to improve the content on your site and make the way to the next step clearer.
Another way to change your customer acquisition model, especially for bigger problems, is to evaluate how you define certain milestones or signs of success. For instance, the way one company defines conversion might be less appropriate for your own business objectives.
Q: Are you supposed to have more than one customer acquisition model?
A: A lot of companies do have multiple types of models — sometimes one model for each brand awareness tactic or department. If you want a cohesive customer acquisition strategy for your organization, each model should be consistent with that strategy.
The benefit of consistent customer acquisition models is smoother customer experiences. If you have a customer who’s engaged with your brand in multiple parts of multiple models, you don’t want them to have disjointed experiences as they go through points of contact with your brand. It’s important to understand how one user might show up in different parts of different models, and how you can ensure that their experience is consistent as they interact with different divisions of the company.
Q: What are some variants of customer acquisition modeling?
A: There are a few different variants of customer acquisition modeling. These variants are better when you have specific circumstances about available data and other factors. For example, an audience classification approach**** — often facilitated by artificial intelligence — is best used when you have limited data on somebody. Being able to group potential customers based on any data you do have can help marketers test different messages and understand what’s resonating with those users at scale. AI can fill in the gaps for the data that has not been gathered yet.
Q: What are some best practices for customer acquisition modeling?
A: One of the best practices for your customer acquisition process is to reevaluate your model on a regular basis. Often, people don’t behave in the way they’re expected to. It’s important to reevaluate your model in case user behavior has changed, is different than predicted, or in case your marketing tactics have changed. You want to make sure that the model you’re using is still relevant. You should also keep an eye on your customer acquisition cost (CAC), because this will change as your model changes.
Another important practice with customer acquisition is having the best data management software that can help you build profiles of customer behavior to determine what experiences are going to be relevant for your existing and potential customers.
Q: What is a common drawback with customer acquisition models?
A: A common drawback with customer acquisition models is that it’s often hard to understand the impact of different marketing tactics on a purchase decision, from the first social media awareness campaign to eventually gaining a new customer. Sometimes, it can be hard to predict which tactics will drive potential customers to make purchases and continue their relationship with your brand.
Q: How will customer acquisition models look in the future?
A: In the future, customer acquisition models are going to have many new features. For example, one of the features that Adobe already employs in our products is propensity scoring, which helps you understand which of your new prospects are most likely to take certain actions and fall into certain audience segments. This feature helps you categorize and group similar people together for your campaigns, making it easier to acquire new customers.