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 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 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. From digital newsletters and Facebook ads to old-school radio, TV, and billboard promotions, there are various customer acquisition channels that you can use.
A key to a successful customer acquisition strategy is knowing your target audience—that is, the group of consumers you’ve determined you want to reach. For example, if you sell affordable women’s fashion, your target audience might be female millennials and Gen Zers.
What is customer acquisition cost?
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. There will be some trial and error when trying to find the best customer acquisition strategy, but that’s just the nature of business.
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.
5 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.
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.
To incentivize your current customers, maybe you offer 30% off their next purchase or some other perk when they get a first-time customer to make a purchase or sign up for your service. 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.
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 video.
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.
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, it might not make sense for an auto repair and service shop to send daily or even weekly emails, but if you know when a customer’s oil change is due based on the information you recorded from their last visit, you can send a 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.
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.
You can use paid ads that target a specific segment of your audience to reach people who have expressed interest in products or services that are similar to what you offer. 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.
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.
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 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.
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.