Introduction to customer acquisition strategy
What is customer acquisition?
Customer acquisition is the process of bringing new paying customers to your brand. It involves a wide range of strategies and tactics aimed at attracting potential customers and converting them into loyal buyers. In the context of data management, especially in ecommerce and content marketing, customer acquisition includes various methods to reach potential customers who are strong candidates for the products or services you’re offering.
In this guide, you’ll learn about customer acquisition, including:
- Why customer acquisition is important for business growth
- What are the key customer acquisition strategies
- Understanding and measuring customer acquisition metrics
- Developing and refining customer acquisition models
- Customer acquisition vs. customer retention
Why customer acquisition is important for business growth
Customer acquisition is essential for boosting your company’s profits, increasing brand awareness, and building a stable foundation for the future. While retaining existing customers is crucial, bringing in new customers is what keeps a business growing. Without a consistent influx of new customers, even the best retention strategies may only result in stagnation rather than growth.
Key customer acquisition strategies
1. Search engine optimization (SEO)
SEO is one of the most important methods of customer acquisition. It involves optimizing website content to earn unpaid, organic traffic from search engines. Since nearly 70% of all online experiences start with a search engine query, SEO is crucial for positioning your brand where potential customers can easily find it. This strategy builds momentum over time and is a foundational tactic for any customer acquisition plan.
2. Content marketing
Content marketing is another vital customer acquisition strategy. It involves creating and distributing valuable content that attracts and engages your target audience. This can include blogs, videos, podcasts, social media posts, and more. Content marketing not only introduces potential customers to your business but also solves problems and answers questions, establishing your brand as an authority in your industry.
3. Email marketing
Despite being one of the oldest strategies, email marketing remains incredibly effective for customer acquisition. It allows businesses to connect with potential customers directly in their inboxes, where personalized messages can influence purchasing decisions. Email marketing is also cost-effective, with a high return on investment, making it a staple in any customer acquisition strategy.
4. Social media marketing
Social media is a modern and powerful tool for customer acquisition. Platforms like Facebook, Instagram, TikTok, and Linkedin offer unique opportunities to engage with potential customers. Whether through organic posts or paid ads, social media allows brands to reach large audiences and build relationships with customers in a more casual and interactive environment.
5. Paid advertising
Paid advertising, especially digital ads, is a quick way to generate traffic, leads, and sales. Whether through search engine ads, social media ads, or display ads, paid advertising can introduce your brand to new audiences and drive immediate results. However, it’s important to monitor the cost and effectiveness of these ads to ensure a positive return on investment.
6. Referral programs
Referral programs leverage the power of word-of-mouth marketing by encouraging existing customers to refer new customers in exchange for rewards. This strategy not only brings in new customers but also increases loyalty among existing ones. Since referrals often come from trusted sources, they tend to convert at higher rates and have a longer customer lifetime value.
7. Other effective strategies
- Video marketing: Video content, whether recorded or live, can significantly boost customer acquisition by providing a dynamic way to showcase products, answer questions, and engage with potential customers.
- Giveaways: Running giveaways on social media platforms can attract new customers by encouraging them to try your products or services.
- Events: Hosting or attending events, whether in-person or virtual, offers a unique way to introduce your brand to new audiences.
- Offline marketing: Traditional marketing methods like print ads, billboards, and direct mail can still play a role in customer acquisition, especially in markets where digital saturation is high.
Understanding and measuring customer acquisition metrics
What is customer acquisition cost (CAC)?
CAC measures the cost of converting someone into a customer. It’s calculated by dividing the total cost of a marketing campaign by the number of new customers acquired. Monitoring CAC is essential to ensure that your acquisition strategies are financially sustainable. A high CAC means you’re spending too much to acquire customers, which can hurt profitability.
What is customer lifetime value (CLV)?
CLV represents the total value a customer brings to your business over their lifetime. It’s crucial to compare CLV to CAC to ensure that acquiring new customers is profitable. Ideally, the ratio of CLV to CAC should be at least 3:1, meaning the value a customer provides is three times the cost of acquiring them.
What is acquisition rate?
Acquisition rate is the percentage of leads that become customers. This metric helps gauge the effectiveness of your campaigns in converting interest into actual sales. While not always precise, it provides insight into how compelling your acquisition efforts are and whether they resonate with your target audience.
Other relevant metrics
Other metrics include engagement rates, conversion rates, and the effectiveness of individual channels, all of which contribute to a comprehensive understanding of your customer acquisition performance.
Developing and refining customer acquisition models
What is a customer acquisition model?
A customer acquisition model outlines the process and tactics your business uses to attract and convert new customers. Different organizations may have different definitions of acquisition, and as a result, their models will vary. For instance, some companies consider acquiring an email address as a successful acquisition, while others only count an actual purchase.
Common variants of customer acquisition models
Customer acquisition models can vary based on tactics and objectives. For example, digital advertising might focus on generating website traffic, while referral programs might emphasize conversions. Each model should be tailored to the specific goals of your business.
Indicators of a poor customer acquisition model
A key indicator of a poor customer acquisition model is a disconnect between predicted and actual business results. If your model predicts certain outcomes that aren’t materializing, it’s a sign that it needs refinement. Regular communication between marketing and data teams is essential to ensure alignment and accuracy.
Best practices for customer acquisition modeling
Regularly reevaluating your customer acquisition model is crucial. As customer behavior and market conditions change, your model should adapt accordingly. Additionally, keeping an eye on CAC and ensuring your data management systems are robust will help maintain the effectiveness of your acquisition efforts.
How to improve your customer acquisition strategy
1. Make it sustainable
Customer acquisition is a long-term process. While short-term campaigns can get results, it’s best to use strategies that last. Prove the longevity of a tactic, like a TikTok trend, before you put too many resources into it.
Make sure you have the time and resources to continue your efforts. Otherwise, they will peter out and lose their effectiveness over time. This means your leadership team needs to provide an adequate budget for customer acquisition.
2. Make it flexible
You should always analyze your data and tweak your strategies to increase the effectiveness of your acquisition efforts. Your competitors, customers, business, and industry will change over time, and that’s why flexibility is important.
This means:
- Changing with the times. Make sure your campaign is flexible enough to change on the fly — otherwise, you might be stuck with a strategy that doesn’t work. Being able to change direction will allow you to respond to trends, which is critical to effective acquisition.
- Diversifying your strategies. If you’re only promoting your brand to new customers on social media, you’re likely missing out on customers on other platforms. Your business likely caters to several customer personas that prefer different media. You’ll reach a larger audience with a mix of acquisition channels, which is a boon to your bottom line.
- Adjusting KPIs. As your business changes, your goals should change too. If your KPIs are no longer useful, you have the freedom to change them. Ensure they’re challenging enough that your team is motivated, but not too unrealistic that you never meet your goals.
3. Put the customer first
What do customers want to see from your brand? Adjust your customer acquisition strategies so they meet customer expectations and, if needed, adapt to customer feedback.
Remember, you don’t just want to acquire new customers — you also want them to become regular buyers. If customers feel like you treat them well, they’re more likely to stay with your business, boosting CLV in the process. By prioritizing the customer early on, you can also help improve your customer retention in the long run.
Customer acquisition vs. customer retention
The relationship between acquisition and retention
While customer acquisition focuses on bringing in new customers, customer retention aims to keep them engaged and loyal over time. Both are essential for long-term business success. A strong acquisition strategy that brings in the right customers can enhance retention efforts, as these customers are more likely to stay with your brand.
Strategies to transition from acquisition to retention
To move from acquisition to retention, it’s important to develop a relationship with your customers. This can be done by enriching customer profiles with data, allowing for more personalized and effective marketing. The goal is to create a complete customer profile, often referred to as the “golden record,” which helps optimize marketing campaigns for individual customers.
Which is better for long-term success?
Balancing acquisition and retention is key to sustainable growth. While it’s cheaper to retain existing customers, continuously bringing in new customers is necessary to offset any churn and maintain growth. An integrated approach that gives equal attention to both strategies will ensure long-term success.
Get started with customer acquisition
Customer acquisition is essential for boosting your company’s profits, increasing brand awareness, and building a stable foundation for the future. The first step to a successful customer acquisition strategy is arming your team with sufficient data to connect with your target audience.
Adobe can help
Adobe Marketo Engage is a marketing automation platform that can enhance your customer acquisition efforts. By integrating customer data from multiple sources, Marketo helps build comprehensive customer profiles, ensuring that your marketing efforts are not only targeted but also scalable.
Watch the overview video or take an interactive product tour to learn more.
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