SUMMARY
A well-defined customer acquisition strategy can be a complete game-changer for bringing you new business, maximising retention, and multiplying your profits
Charting out your customer acquisition strategy is more critical than ever in the face of soaring Customer Acquisition Costs (CAC), with a jump of 70-75% in most industries
Your customer acquisition framework holds the key to unlocking more sales, greater revenues, and bigger margins while minimising expenditure on bringing new business and streamlining marketing efforts
Multiple factors come into play when you think of fuelling your business growth — and your customer acquisition strategy lies at the heart of it.
A well-defined acquisition strategy can be a complete game-changer for bringing you new business, maximising retention, and multiplying your profits.
Charting out your customer acquisition strategy is more critical than ever in the face of soaring Customer Acquisition Costs (CAC), with a jump of 70-75% in most industries. Relying on an unplanned and arbitrary acquisition workflow can lead to a higher CAC and minimal bottom-line numbers.
The easiest way to come out of this trap is to brainstorm, experiment, analyse different acquisition channels, and create a bulletproof strategy.
This comprehensive guide will bring you up to speed with the complete customer acquisition funnel and parameters to choose the best channels for your business. So, dive right in.
What Is Customer Acquisition?
Customer acquisition defines the framework for making sales and winning new customers. This framework typically spells out the roadmap to:
- Reach out to potential customers
- Tell them about your business
- Convince them to choose your product/service
- Convert them into a paying client
A SaaS brand like Asana attracts and informs potential users about its product through content marketing efforts. It also offers a free trial and leverages email marketing to nudge the users into purchasing a premium subscription — completing its acquisition strategy.
Your acquisition strategy maps out your customer journey, acting as a medium of retention once you’ve closed the deal. Here are some more benefits of a detailed acquisition strategy:
- Strengthen your brand awareness
- Reach your target audience and skyrocket sales
- Prepare a healthy pipeline to bring in new business
- Broaden your profit margins with increased revenue
- Retain new customers and create a loyal customer base
Many business owners and marketers end up using a one-size-fits-all module for all acquisition channels.
However, each channel has its distinctive characteristics, audience demographics, and performance indicators. You have to tailor your strategy for each channel and shape it according to your customer acquisition funnel.
- Awareness: Your acquisition funnel starts when a prospect discovers your brand and learns more about your product/service. You can build this awareness through your marketing efforts or become visible to potential customers through their own research.
- Interest: You have to distinguish yourself from your competitors in the next stage. Tap into your buyer’s pain points and position your brand as the perfect solution. Generating interest among prospective buyers increases your chances of making the sale with a higher customer lifetime value (LTV).
- Consideration: When a prospect reaches the consideration stage of your funnel, they are quite literally considering purchasing from you. So, they’ll try to learn more about your brand by visiting your website and social media, downloading any free resources, or even signing up for a trial.
- Intent: The intent stage is when a potential customer shows a definite desire to buy from you. They’ll hint at a purchasing decision by putting items in their cart or booking a demo call. When a prospect reaches the intent stage, it’s up to you to make their journey easier and nudge them towards completing their purchase.
- Evaluation: As your prospect inches closer to a purchase, they’d want to cover all bases and read reviews to finalise their decision. They might read up articles comparing you with your competitors, check customer reviews, and perform a cost-benefit analysis.
- Conversion: In the final stage of your funnel, you’ve finally won the sale and converted the prospect into a customer. This concludes your acquisition funnel.
What Are The Different Acquisition Channels?
Your business is growing sluggishly, and you can’t figure out how to bring in more customers to maximize profits. You now want to develop a fail-proof customer acquisition strategy to reach the right audience and bring tangible results.
But how do you get the ball rolling and start creating your framework? By understanding all customer acquisition channels at your disposal.
Content Marketing
Fact: Content marketing costs almost 41% less per lead than paid search.
Content works as one of the most versatile and efficient channels supporting your entire acquisition funnel and driving your conversion rate.
Content marketing — including everything from blogs, guides, product reviews, and whitepapers to case studies, infographics, podcasts, videos, and more — allows your brand to:
- Establish your voice in the industry and create brand authority
- Build credibility and win over your prospects’ trust
- Improve your discoverability and gain organic traffic
Unlike false advertising, content marketing can position your brand as a reliable resource — attracting and converting more leads simultaneously. Create content to educate and engage your readers instead of solely promoting your brand.
Nykaa’s BeautyBook blog shows how it’s done. Covering topics centred around its products, the blog is a goldmine for Nykaa’s target audience. It solves readers’ queries and shares beauty hacks to create more authority for the brand.
Social Media
Given the continuously increasing social media usage, it’s no surprise that 66% of marketers get great lead generation results from their social media presence just by spending 6 hours a week.
Social media platforms offer two acquisition channels: paid and organic.
- Paid social media: It works best for businesses with a budget to spare and a clear idea of their target audience. These social media ads put you right in front of your target audience, bringing much-needed exposure to kickstart your acquisition funnel. Sponsored posts also help build brand awareness by getting more eyes to your content.
Sleepy Owl ran a unique ad campaign on all social media platforms. Their mute ads only used animated subtitles to convey the essence of the ad and created huge buzz for the brand. So, a dash of creativity is all you need to make paid social media work for you!
- Organic social media: It supplements your content marketing efforts for acquisition. Even though it takes relatively long to produce visible results, organic social media activity is a cost-efficient solution to interacting with your existing customers and attracting new ones.
Masalabox’s Instagram page is proof of the community you can build through organic social media marketing. The food delivery brand posts consistently about recipes, facts, and memes to engage with their 35,000 strong follower base.
Choose a social media acquisition channel according to your budget, level of competition, and target audience.
Search Marketing And SEO
Search marketing mirrors social media with its paid and organic channels. While organic search marketing focuses on search engine optimisation (SEO) — that is, optimising your website to rank high on search engines, paid marketing includes pay-per-click ads.
The fact that 44% of online purchases start from a search query underlines the importance of SEO for your customer acquisition strategy. Take a leaf from Heads Up For Tails’ SEO book that bagged them the top place for a high-value keyword. So, the brand can instantly attract new visitors and potential clients with greater visibility.
On top of bringing new customers, SEO allows you to:
- Bring in quality traffic and targeted prospects to your website
- Reduce expenditure on paid marketing activities
- Improve your click-through rates than ads (71.33% of people click on an organic result over an advertisement on Google)
- Enhance your discoverability and convert more leads
While SEO is a long-drawn process that could take months to take you on the first page of Google, pay-per-click ads offer a shortcut to come in front of your audience. You can artificially increase your visibility and traffic using a comparatively expensive search marketing method.
Email Marketing
Once you’ve aced the first two stages of your funnel, how exactly will you persuade a prospect into making a purchase? With a targeted email list.
Email marketing is a rather evergreen acquisition channel that gives you the platform to nurture personalized communication with every prospect. Whether it’s about bringing them back to their abandoned cart or sending them a customized coupon, email marketing is your go-to solution.
Here’s how Furlenco uses email marketing to engage with its existing and potential customers. The D2C brand creates topical and product-centric emails to get more clicks.
With an average return on investment of $38 for every expense of $1, email can prove more lucrative than most other channels — and help you create a direct line of contact with your prospects.
Cold Calling
Cold calling is among the most overlooked channels for customer acquisition — mainly because of the challenging process of closing a sale through cold calls.
However, studies proving that 57% of C-level buyers prefer to hear about a purchasing opportunity through salespeople show the massive potential you can unlock with a solid cold calling strategy.
Depending on your type of business and customer segmentation, you can use cold calls to explore new markets and broaden your territories to win new business.
Affiliate And Influencer Marketing
Riding on someone else’s influence until you build your brand reputation is another excellent means of customer acquisition. Both affiliate and influencer marketing is based on this notion of leveraging a famous individual’s network to make more sales.
Although entirely different in execution, these tactics rely on creating constructive partnerships with influential creators to create buzz about your brand. These collaborations will promote your business and drive more sales because of word-of-mouth marketing.
All you need to do is: identify the right affiliates/influencers in your niche and analyse the audience in their network to ensure you’re tapping into the right market.
Here’s how Be Bodywise collaborated with a food influencer to promote its health supplements. The brand earned more discoverability through this collaboration—expanding its list of interested customers.
How To Choose The Right CAC For Your Company?
Choosing appropriate customer acquisition channels is the first step to engaging the right prospects. Here’s how to do it:
Identify Customer Demographics
No matter how intricately designed, your customer acquisition strategy will fall flat if it doesn’t align with your target audience. Any customer acquisition plan has to start by identifying the ideal customers and their pain points.
So, dig deeper into your product-market fit and get a clearer picture of your buyers. Use tools like surveys, sales data, and brand interaction to perform meticulous customer research.
Here are some helpful questions to determine your customer demographics:
- What are the age and income groups they fall into?
- What is their level of education and occupation?
- What is their nationality and place of residence?
Your customer profile(s) will help you find new territories and acquisition channels for expanding your business. It’ll also help to define your buyer persona — a semi-fictional representation of your ideal customer based on your research.
Define Your Budget
Before jumping to your choice of acquisition channels, look at the budget you have to splurge on your acquisition pipeline. Your budget will essentially be your CAC, which ultimately decides your company’s bottom line.
Fixing your budget will keep you in control and simplify the process of planning how much money you’re spending on your goals.
If you’re on a tight budget, prioritise your goals. So, expanding your acquisition channels will take a backseat while you narrow down your focus on getting the best value for money from a few selected channels.
Besides, setting your budget and tracking your acquisition performance will enable you to iterate your strategy consistently to maximise your ROI.
Evaluate What Your Competitors Are Doing
Amid all your customer research to craft the perfect acquisition pipeline, you can also analyse your competition. While you may not want to imitate their strategy, assessing what they’re doing can help in several ways.
For starters, looking at your competitors will tell you what’s working and what’s not in every channel—be it social media or SEO. You can double down on everything that proved beneficial for them and steer clear of whatever flopped.
Checking up on your competition will also help you figure out the weaknesses in their acquisition strategies. If, for instance, your competing brands are not popular on a social media platform, it opens up a big opportunity for you. Focusing your attention on this platform might give you an edge over them.
Set Clear Goals
Once you’re clear about who you’re targeting, you can attempt to answer why. Defining your acquisition strategy’s goals gives you the much-needed direction to set realistic expectations, measure progress, and make necessary amends to move forward.
Your goals should ideally address customer growth as well as churn. After all, your customer acquisition strategy focuses as much on bringing new clients as it does on retaining the existing ones. So, aim to build new and strong client relationships while zeroing in on your current customers’ satisfaction.
You can also set your goals in terms of metrics to see how well your funnel is working. Measure your CAC on top of the churn rate, the monthly recurring revenue, and the customer lifetime value.
Ultimately, a set of well-defined goals is essential to test the strength of your acquisition framework and get the best results.
Create A Flexible And Sustainable Acquisition Strategy
After you’re done with all the heavy-lifting to brainstorm and strategise your customer acquisition framework, it’s time to bring a systematic strategy in place.
Two factors that will determine your strategy’s success, in the long run, are flexibility and sustainability.
- Flexibility: The marketing landscape is constantly changing, and you need to be prepared to adapt to these changes in customer behaviour. Keep your framework easy to adjust—making it convenient to accept new market trends.
- Sustainability: Remember to plan for the long run. Look at the bigger picture while investing in your acquisition plan. So, whatever activities and channels you want to work with, make sure you make them sustainable for the long run.
Draw up your acquisition roadmap with your target audience, budget, and goals in mind. Monitor your performance to see how these factors play out for your business.
Use Different Acquisition Methods
No matter which acquisition channels you decide for your brand, don’t be afraid of experimenting with different techniques. Keep a tab on your audience’s preferences and pain points to design a unique strategy for each channel you’re using.
Eventually, when the results start showing up, you can think of diversifying your acquisition channels to maximise the results. A diverse approach increases your chances of interacting with potential buyers generating more leads — it also means you’re reaching new audiences.
Besides, diversification helps act as a safety net if one or more channels go down. For instance, if your reach on Facebook starts declining, you can allocate that budget to other platforms like Instagram or Twitter and get better results.
Wrapping Up
Your customer acquisition framework holds the key to unlocking more sales, greater revenues, and bigger margins. Optimising this strategy can minimise your expenditure on bringing new business while streamlining your sales and marketing efforts.
So, use this guide to outline your acquisition funnel, choose the relevant channels, and create a smart and sustainable strategy. Set yourself apart from the competition and build a healthy pipeline of customers with this acquisition toolbox.
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