Customer Acquisition: 8 Strategies To Gain & Retain New Clients
Getting new customers is the goal of every business, but reaching potential patrons and converting them into consumers of your product or service isn’t as easy as 1, 2, 3. You need a solid customer acquisition strategy.
To that end, it’s crucial to understand there’s no one-size-fits-all solution. Just because a particular acquisition channel (say, an email or sponsored social media post) works well for one company doesn’t mean it’ll work well for yours. Your marketing costs budget and target audience will also play a significant role in how you approach garnering new clients.
In this guide, we’ll break down the basics of customer acquisition and share several tried-and-true strategies that can help grow your business and boost your bottom line.
What is customer acquisition?
This is the term used to describe the process of winning over new customers. It usually involves a sequential customer journey including different marketing channels to get in front of new eyes, encourage leads to engage with the business and eventually make a purchase.
Why is customer acquisition important?
It’s true, customer acquisition methods make the business money by converting new customers. A successful customer acquisition strategy does more than that though. For example:
- Brand awareness – A strong presence on various marketing channels creates strong brand awareness, making the business recognizable and familiar.
- Customer trust – With a strong online presence and brand awareness, customers are more likely to trust the business. It creates a sense of legitimacy.
- A metric of success – High-converting marketing campaigns reflect well on the business as a whole. It acts as evidence of business success for prospective customers and investors alike.
As you can see, the return on investment of customer acquisition comes in various forms.
Customer Acquisition Channels
There are various customer acquisition channels that connect your business with your ideal customer. Here are some of the channels you have to choose from:
- Websites
- Blogs
- Webinars
- Emails
- Referrals
- Social media
It’s worth utilizing more than one at once so as to not put all your eggs in one basket. Experiment to see which ones have the best conversion rate and are the most cost effective for your business.
What is a customer acquisition strategy?
In its simplest terms, a customer acquisition strategy is the method (or methods) you adopt to sway consumers to buy your product or service. The goal of customer acquisition is to attract new customers and keep them coming back for more. Depending on your target audience and your allocated marketing spend, you may choose to do this through email newsletters and Facebook ads or old-school radio, TV, and billboard promotions.
What is customer acquisition cost (CAC)?
The money it takes to bring in new consumers is known as customer acquisition cost, often abbreviated to CAC. For instance, if you spend $3,000 on a marketing campaign that garners 150 new customers, your customer acquisition cost is $20 ($3,000 divided by 150).
However, that simple calculation gets a lot more complex once you factor in the various expenses it took to get that campaign off the ground, from the actual cost of the ads to paying the agency or marketing department handling it for you.
Using this same example, let’s say the campaign results in sales that average $30 per new customer. That means your profit is $10 per sale, which is great—if your CAC is truly only $20. Overhead costs might end up reducing that profit or negating it entirely.
Ultimately, the goal is to bring in more money than what it costs to acquire each customer, so do your research (and do the math) to land on the most cost-effective solution.
How to Calculate CAC
Tracking your CAC is essential to finding a successful customer acquisition strategy. As there are various different customer acquisition methods, it takes some experimentation to find the ones that work best for your business, depending on your brand, products and customer persona. Which ones get you the best return on investment? Calculate your CAC and discover the cost-effectiveness of each strategy with this simple formula: marketing spend/new customers=CAC
For example, you may find that paid ads cost $4000 a month and convert 250 new customers. So using this method costs you $16 per customer. In essence, does the number of customers converted by the campaign justify the total cost?
8 Customer Acquisition Strategies
Before you start implementing any customer acquisition strategy, set specific goals you’d like to reach. Doing so will help you determine if a particular approach is working and how to evolve your plan. Here are a handful of proven acquisition tactics you may want to consider.
1. Referral Programs
Referral programs are an excellent way to garner new customers. Also called referral marketing, this type of customer acquisition strategy relies on existing customers recommending your brand to friends, family, and peers. When you consider that up to 92% of shoppers trust recommendations from their peers more than advertisements, this could be the most powerful (and cost-effective) approach.
Here are some examples of referral programs. Dropbox encourages existing customers to earn free storage space by referring friends. T-Mobile’s refer-a-friend program offers existing customers a $50 prepaid Mastercard for every friend who opens a qualifying account.
Meanwhile, natural beauty brand 100% PURE gives both parties an incentive—new customers get $15 off their first order, and existing customers get $15 once that first-time purchase is made, plus the chance to win a $500 gift card.
2. Content Marketing
Creating fresh, relevant, and engaging content online is a customer acquisition strategy used by businesses of all breeds and sizes. Content marketing can include creating blog posts, podcasts, and videos.
Search engine optimization (SEO) goes hand-in-hand with content marketing. In a nutshell, SEO means increasing your website traffic by elevating the visibility and value of your landing pages. But rather than just blindly writing blog posts, content marketing requires a more methodical approach. It involves identifying keywords that your potential customers are searching for and creating helpful content surrounding those keywords.
For example, say you’re a tea shop in Austin that wants to broaden your customer base and you have the capacity to ship products beyond your local market. Creating an SEO-driven website filled with articles on various tea-related topics (and links to your product pages) can be a fantastic form of lead generation that pulls potential buyers to your site and ultimately converts them into paying customers.
If you don’t believe that’s a realistic scenario, check out the case study on Cup & Leaf, a real-life tea shop that went from 0 to 150,000 monthly organic visitors in just eight months.
3. Email Marketing
Sending out emails to promote your products or services might seem a bit outdated in the age of viral videos and Instagram likes, but using your email list as part of your marketing efforts can be incredibly effective. According to recent stats from the Data and Marketing Association, you can expect a $42 return on investment for every dollar you spend. (The report calculated its findings in British pounds, but you can use the U.S. dollar equivalent to get the idea.)
Depending on the nature of your business, you can send daily, weekly, monthly, or seasonal updates about specials or promotions you’re offering. For instance, an auto repair and service shop could track when a customer’s oil change is due and then send an email reminder or offer a discount code when it’s time to return.
You can also use email as a way to check in with your customers to get feedback and foster a stronger sense of connection to build customer loyalty and improve your customer retention rate. Consider tying in some of your other content acquisition strategies by sending emails that offer a customer incentive (say, $10 off their next purchase) if they take a particular action.
A call to action might be signing up for your business’s Facebook Messenger alerts, following your company page on Instagram, leaving a review on Google, or writing a testimonial for your website. However you use it, a well-considered email marketing strategy will pay off.
4. Social Media
From Instagram and Facebook to Twitter and LinkedIn, social media marketing is another way to promote your product or services. This type of customer acquisition can grow brand awareness, word-of-mouth referrals, and increase the chance for virality.
Successful social media marketing involves posting engaging content. This could be informative content, entertaining content or posts that start a conversation. You can also have a giveaway or contest on one (or multiple) social channels and encourage people to “like” your page or tag a friend as a way to enter the contest. Track your results so you can double down on what works on social media for your business.
5. Customer Retention
As its name suggests, customer retention is a company’s ability to retain customers over a period of time. Although customer retention is often seen as the desired outcome of a customer acquisition strategy, it might be time to rethink this and consider it your first line of defense against customer churn.
If you have happy customers who are enthusiastic enough about your brand that they share it via social media, word-of-mouth, or a modern referral program, you have a built-in marketing team right there. As such, great customer service, personalization, and gathering customer feedback is critical. When you improve your customer experience, you reduce the risk of customer churn, thereby reducing the need to spend more on customer acquisition.
6. PPC Ads
If you want to get your business in front of new customers quickly, pay-per-click ads are the way to go. The reason Google ads and Facebook ads are so popular among established and new businesses is because these platforms allow advertisers to specifically target the buyer personas they want their content to be shown to, increasing the conversion rate.
You can even run retargeting campaigns to warm leads who showed interest but are yet to convert. That being said PPC ads will take up a lot of your marketing spend because they can be costly to run, especially when finding your feet at first.
7. Customer Reviews
A consistent stream of new positive reviews will make your customer acquisition efforts so much easier. Reviews give prospective customers an honest insight into your business and increase trust within the customer relationship. On top of that, building a strong platform on review sites such as Google Reviews improves your SEO ranking, increasing the chance new customers will find your business.
8. Influencer Marketing
One of the most popular approaches to acquiring new customers is through social media influencers. In 2018, 78% of marketers used influencers to build brand awareness, and 81% of them considered it effective.
For example, if teenagers are your target audience, it might be wise to consider YouTube as a platform for reaching potential buyers. One study found that 70% of teenagers trust influencers more than traditional celebrities. Depending on the number of followers and level of engagement that an influencer has, your company can reap the benefits of this trusted personality promoting your product, service, or brand.
However, be cautious of the dangers of influencer marketing, which often includes fake followers (or rather, paid followers) that an influencer will secretly buy to make it look like they have a bigger audience.
Tips to Improve Your Customer Acquisition Strategy
Whatever combination of customer acquisition methods you decide to move forward with, here are a few considerations to optimize your customer acquisition methods.
1. Ensure your strategy is sustainable.
The strategies you decide to use should be something you can keep up with over time to get results in the long term. You’re looking for a consistent stream of new customers, not a quick win.
2. Research your target market and personas.
The better you know your customers, the easier it will be to win them over. This knowledge will inform the customer acquisition channels you invest in and the content you produce for them. Make sure you’re targeting the right people in the right way.
3. Diversify your strategies.
A combination of diverse customer acquisition methods is the best way forward. It gives you multiple sources of new customers so you’re relying on one and customers that see you on multiple platforms are more likely to remember and engage with you.
4. Deal with customer churn.
There’s no point in attracting new customers if they quickly disappear. You want to be attracting people with a good customer lifetime value. Who are they and how do you attract more of them?
5. Build an acquisition funnel.
It’s unlikely that new customers will make a purchase after one interaction with you, so create an intentional customer journey – a marketing funnel – to keep them engaged with the business until they are ready to buy. Keep the journey going after their first purchase too!
6. Track your campaigns’ performance.
To make informed decisions about your customer acquisition efforts, you need to be collecting data from the metrics of the marketing channels you’re using. This will give you a clear picture of what’s working and what isn’t. What you should continue to do and what needs to be improved.
Acquire Customers and Watch Your Business Grow
For businesses of all sizes, the customer acquisition process isn’t a one-and-done deal. Convincing consumers to buy your product or service requires foresight, focus, and finances. But it doesn’t have to be complicated.
To that end, consider using Podium to help execute your digital marketing strategy and start reaping the benefits of new paying customers. Regardless of your business type or which customer acquisition strategy you use, creating a positive customer experience is essential. Happy customers are the core of any business, and they can help you grow and thrive for years to come.
