Learn about customer acquisition and its most successful strategies
New customers are a vital part of any business, but every year it gets a little harder — and more expensive — to attract them. Still, 55% of customers have higher expectations for the brands they buy from, so your business needs to do its best to exceed those expectations.
Customer acquisition has always been a tough puzzle to solve, but it’s important to change with the times. Find out how to improve customer acquisition, as well as how to build a structured process for growing your business through marketing channels beyond word of mouth.
In this guide, you’ll learn about customer acquisition, including:
- What it is
- How to create a strategy
- How to measure it
- Common strategies
- Three examples
- How to improve your strategy
- Customer retention vs. acquisition
- How to get started today
What is customer acquisition?
Customer acquisition is the process your business goes through to attract new customers. Acquisition is all about getting new customers, not just creating awareness (although that is part of the process). It sounds simple, but the customer acquisition process is incredibly complex.
The marketing funnel and customer journey both factor into how successful a business is at customer acquisition. With a marketing funnel, customers go through different stages before they finally become a customer. Prospects want to see different information — and in different formats and channels — based on where they are in the marketing funnel. This can have a major impact on whether a prospect becomes a customer or falls out of your funnel entirely.
The customer journey also affects customer acquisition. While the funnel is a representation of the stages people generally go through to become customers, the customer journey is the actual process they go through. If most of your new customers engage with you via email, then on social media, and then finally on your website, that’s an important distinction that affects how you market to new customers.
Why customer acquisition is important
Customer retention is important, but new customers keep a business afloat too. Customer acquisition matters because it:
Increases sales. Retention-focused strategies don’t always increase company revenue. At best, revenue will hold steady over time. If you want to see an increase in sales, customer acquisition is a must.
Improves brand awareness. Even if customers don’t choose your brand, they become aware of you during the acquisition process. They might not become a customer right now, but the brand awareness alone sets you up for success in the form of future sales and word-of-mouth referrals.
Reduces costs. Customer acquisition costs vary by industry, but for ecommerce shops, it costs as much as $533 per new customer. With a customer acquisition plan in place, you can work to decrease that number, bringing in more sales at a lower cost.
Creates a stable business. Once you create a consistent, effective acquisition strategy, you’ll have a proven playbook that will help you enjoy greater stability in your business. Instead of fretting over where your next sale will come from, an acquisition strategy helps you grow without the anxiety.
Creating a customer acquisition strategy
Customer acquisition brings new business into your organization. But you need a solid strategy backing up your acquisition practices for long-term success. Follow these five steps to create a customer acquisition strategy tailored to your business’s ambitious sales goals.
1. Identify your customers
Who are your customers? You need to know exactly who you want to acquire as a customer. After all, targeting a CFO versus a marketing coordinator requires a completely different approach.
The best way to get to know your customers is to compile customer data into buyer personas. But buyer personas are only effective if you back them up with relevant, useful data. Be sure to:
- Check your analytics to follow the customer journey from start to finish.
- Use a real-time customer data platform (CDP) to create useful customer profiles from your data.
- Segment your audience and engage them with the right content at the right time.
Data is a boon for customer acquisition, so compile everything you know about your customers to start this process on the right foot.
2. Determine goals
Knowing your audience is important, but you have to set goals for customer acquisition. What’s important to you? How do you know your acquisition strategies are successful?
When you know what you’re trying to achieve, it makes it much more straightforward to plan the rest of your customer acquisition strategy. Instead of setting flimsy goals like “We need to make more money this year,” set SMART goals like:
- We will increase sales by 5% this quarter.
- We will decrease customer acquisition costs (CAC) by 15% this year.
- We will generate 20% more leads from social media during our product launch campaign.
- We will boost average customer lifetime value (CLV) to $1,000.
3. Choose your acquisition channels
Once you’ve identified your audience and set your goals, you need to determine which marketing channels you’re going to use. Every business is different, but it’s important to choose a mix of channels like:
- Social media platforms (Choose specific channels like Facebook, Instagram, WhatsApp, TikTok, Twitter, LinkedIn, and so on.)
- Paid ads
- Email marketing
- Content marketing (Specify what type, such as YouTube videos, website blogs, or a podcast.)
- Search engine optimization
- In-person or virtual events
Because your business serves a specific audience and not the world at large, you need to be intentional about the channels you choose. For example, if you’re targeting retirees, it’s unlikely that they’re going to be on channels like TikTok, so that platform wouldn’t be a fit for your customer acquisition strategy.
It’s also important to create a separate strategy for each channel. If you copy and paste your Facebook posts to Instagram, they’re unlikely to perform well. Every channel is unique, so optimize your acquisition strategy for each channel according to how your audience uses that channel.
4. Launch the campaign and get feedback
Once you launch your customer acquisition strategy, you’re never truly done working on it. It’s important to listen to customer feedback during the process and adapt your strategy accordingly.
This is why it’s so important to build data collection into every step of your acquisition strategy. Quantitative data is the key to making rational decisions, but you’ll need all of the data you can get to meet customer expectations.
You’ll need a communication strategy for acting on user feedback, as well as data collection for every channel. In practice, this might mean:
- Monitoring social media comments
- Checking reviews
- Sending customer feedback surveys via email
- Adding “How did we do?” surveys to your website
Be patient as you collect data. Resist reacting preemptively at the beginning of your acquisition campaign so you get a fuller picture of what’s going on — you also need a decently sized data sample to spot trends. But thanks to the power of customer feedback, you’ll be able to find holes in your strategy you didn’t initially see, which can help you design stronger acquisition campaigns going forward.
5. Measure results and optimize strategy
Although customer feedback is important, your sales and marketing team needs to gather and analyze data to determine how successful your acquisition strategies are.
A customer acquisition strategy isn’t “set and forget.” You need to constantly tweak and experiment to find what works best for you and your customers. The only way to know if it’s working is through the data. Regularly monitor the goals and key performance indicators (KPIs) that you set up in step 2. If you see a concerning peak or dip, that’s a sign that something needs fixing.
How to measure customer acquisition
Creating a customer acquisition strategy is just the beginning. Sales and marketing teams need to justify their strategies with quantifiable results, which is why it’s so important to measure customer acquisition metrics.
You need to measure the success of your strategy to see if you’re meeting your goals — or if you need to tweak your plan to course-correct before it’s too late. Every business is different and tracks different KPIs, but these three metrics are the most efficient way to determine the true value of your customer acquisition strategies.
Customer acquisition cost (CAC)
CAC measures the cost of converting someone into a customer. If your CAC is too high, that means you’re spending more money acquiring customers and aren’t making much profit (if any). It doesn’t matter how many new customers you bring in — if you’re spending more than you earn, your strategy isn’t financially sustainable.
You can calculate CAC with this simple formula:
For example, if you spent $100 on marketing and acquired five new customers:
$100 / 5 = $20 CAC
In other words, you spent $20 to acquire each customer.
With an effective acquisition strategy, you shouldn’t spend too much to acquire a customer. CAC costs vary wildly across industries and business models, so it’s best to know what’s normal for your business and monitor accordingly.
Customer lifetime value (CLV)
CLV is the amount of value a single customer provides to your business over time. It’s somewhat complex to calculate, but you can use this simplified formula to calculate CLV:
So, if a customer pays you $10,000 a year for three years and you paid $1,000 to acquire them: ($10,000 x 3) – $1,000 = $20,000 CLV
Keep in mind that this is just for a single customer. You’ll need to average all of your customers’ lifetime value (LTV) to see your LTV across the business.
CLV is best used alongside CAC because if your CLV is less than your CAC, you know you’re losing money acquiring customers. It isn’t enough for CLV to be more than CAC, either. A 1:1 ratio means you’re breaking even, which isn’t good for business. Ideally, you want a ratio of 3:1 (CLV:CAC) to ensure you’re profitable.
The good news is that the longer you work with a customer, the higher their CLV will be. Customer retention certainly helps with CLV, but if you nail customer acquisition from the start, you’ll attract the right types of customers who stay with your business for the long haul.
With acquisition rates, you’re calculating the number of leads that became customers versus the number of leads that saw your campaign. Acquisition rate is valuable because it tells you how compelling your audience finds your campaign.
Since acquisition rate is based on impressions and views, it isn’t always precise. Even so, it’s a valuable way to tell if your acquisitions are going up or down once you launch your acquisition strategies.
Common customer acquisition strategies
Because every organization is unique, you need to choose the right mix of customer acquisition strategies for your business. There are a number of different strategies to choose from, but these six are the most effective for customer acquisition.
1. Content marketing
Content marketing is one of the most common customer acquisition tactics because it’s accessible, affordable, and effective. Content marketing is a big umbrella term that includes content creation via:
- Social media
- White papers
- Conference presentations
The key is to go beyond traditional ad copy and create authentic content that customers find appealing. With content marketing, your business creates unique content that:
- Answers a question
- Solves a problem
- Introduces your customer to your business
2. Email marketing
Email might be one of the oldest customer acquisition strategies, but it’s still a great way to connect with potential customers one-on-one. In fact, email marketing generates $36 in sales for every $1 spent.
Amplifon achieved a 30% lift in customer acquisition through the power of email marketing. By creating more targeted email campaigns, the brand saw double the number of visits to its online store and generated significantly more new customers.
There are plenty of techniques you can use to optimize email marketing performance, including:
- Email personalization
- Audience segmentation
- Subject line optimization
- Split testing
3. Social media
Social media is the most modern customer acquisition technique. Businesses love social media because it returns great ROI with minimum effort. If you’re scaling your business with few resources, have a strong social plan in place to do more with less.
Every social network is different, though. Depending on your target audience and business, you’ll need to choose the right social platform for the job:
Facebook — Facebook is popular among adults aged 35 to 44, who primarily use it to socialize with family and check the news.
Instagram — The majority of Instagram users are 25 to 34 years old and use the platform to keep up with influencers and look for product recommendations. Instagram popularized influencer marketing, which is an effective paid strategy for reaching millennial and Gen Z shoppers.
TikTok — 53% of TikTok users are 18 to 24, so if you’re targeting Gen Z with video content, this is the right platform. Video marketing on TikTok also allows you to do product demos, answer questions, and say more in less time.
Twitter — This short-form, text-based platform is great for B2B shoppers as well as media releases.
LinkedIn — LinkedIn is a professional network, so it’s ideal for B2B brands or brands that do account-based marketing (ABM).
Some platforms, like Facebook, are pay to play, meaning you need an advertising budget to get more eyes on your brand. However, prospects don’t respond well to spammy content, even if it’s promoted. It’s best to promote high-performing organic content with paid ads to get more traction on your account.
4. Search engine optimization (SEO)
Nearly 70% of all online experiences start with a search engine query. With SEO, you can better position your brand to stand out every time users look for information related to your products, brand, or industry. Since SEO generates 1,000% more traffic than organic social media posts, it’s an effective way to acquire more customers in less time.
To acquire more customers with SEO, you can try:
- Optimizing your website content for frequently asked questions
- Consistently creating new content for your website
- Adding metadata to your website
- Sourcing high-quality backlinks to your website
SEO is one of the most important customer acquisition channels because it can be done in an organic, cost-effective way — making it a must-have for brands on a limited budget.
Unlike paid ads, SEO meets the needs of customers and offers help when they need it. Even so, paid ads do have a place — provided your organization has the budget for it.
5. Paid advertising
Sometimes the best way to reach customers is to run an old-fashioned ad. However, paid ads have changed to suit modern times — instead of pricey TV ads, you can quickly run ads on Facebook, Google, or Instagram in minutes. In fact, when most people refer to “paid ads” today, they mean digital ads.
Digital ad spend is expected to hit nearly $240 billion globally in 2022, so this is clearly an in-demand acquisition channel. Social media ads are the most common paid advertising strategy, but options like pay-per-click or display ads are also available.
6. Referral programs
More than 90% of consumers trust recommendations from people they know. Referral marketing (also known as affiliate marketing) relies on word-of-mouth marketing through consumers’ social circles to bring in new customers.
This is a great way to create a more structured, incentivized version of word-of-mouth marketing. While you can hire influencers to work as affiliates for you, you can also leverage your existing customer base to help your business grow. Best of all, you only pay affiliates when they get results, so this is an ROI-positive customer acquisition channel.
Three examples of customer acquisition strategies
There are lots of customer acquisition strategies, so it’s easy to feel overwhelmed. If you’re looking for inspiration, check out these three real-world examples of customer acquisition strategies in practice.
Walgreens paid ads
Image credit: Facebook
Walgreens did a co-branded paid ad campaign that promoted its Red Bull drinks in July 2022. They used different ad formats on Facebook to engage users with multiple shots of the product. Walgreens even drilled down on its audience, specifying that the brand was for physically active people. This is a great way to segment ads and reduce irrelevant ad spend.
Marriott Bonvoy referral program
Image credit: Marriott
To encourage more travelers to book a stay with Marriott, the hotel chain incentivizes existing customers to bring in new customers. Not only do referrers earn 50,000 points, but recipients get 10,000 points when they sign up. By designing a win-win referral program, Marriott scales its acquisition strategies without lifting a finger.
Ben & Jerry’s email newsletters
Image credit: mailcharts
Beloved ice cream brand Ben & Jerry’s uses email newsletters to cleverly boost its acquisition rates. The brand regularly sends fun, hip newsletters to subscribers — but there’s very little selling going on. In this newsletter, Ben & Jerry’s announces a doggie dessert pop-up event, which is a clever blend of email marketing and live event marketing.
How to improve your customer acquisition strategy
You’ve done the hard work of creating a customer acquisition strategy, but that often isn’t enough. You need to ensure your strategy is effective and that it’s continuing to bring in new customers over time. Follow these three simple steps to improve your customer acquisition strategy as your business grows.
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 TikTok trends, before you put too many resources into it.
Ensure that 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 acquisition.
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.
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.
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 retention vs. customer acquisition
Every business needs to source new customers, but customer retention is important too. Customer acquisition focuses on bringing new customers in the door, while customer retention focuses on keeping customers with your business.
The longer a customer stays with you, the higher their CLV will be. Your churn rate, or the number of customers you lose over a period of time, does have an impact on your profits, so you’ll need customer retention strategies in place to reduce churn as much as possible. You need to acquire a lot of new customers to stay profitable if you have high churn, which is why retention is so important.
The good news is that a strong repeat customer base can be an acquisition strategy in and of itself — happy customers are much more likely to refer new customers to you.
It costs five times less to retain existing customers than it does to acquire new customers. While it can be cheaper to focus on retention, you still need new customers coming in the door. It’s important to strike a balance between acquisition and retention for that reason, ensuring you give both strategies equal attention and resources.
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 Experience Platform makes real-time customer experiences possible. As the foundation for Adobe Experience Cloud products and services, Experience Platform is an open system that stitches together customer data from every interaction through every channel in real time. The result is true, comprehensive profiles that drive relevant experiences for every customer.