What is Customer Acquisition?
Customer acquisition is the act of bringing in new customers or converting website visitors, prospects, and leads into customers. It involves guiding potential customers down the marketing funnel, all the way from awareness to the purchase decision and the actual purchase.
For most businesses, this is rather hard to do. That’s because it isn’t a one-time process. You need to find a way to keep new customers coming in at a consistent or, preferably, increasing pace.
The problem is that it takes a whole lot of time and effort to accomplish this. And it can be expensive. In fact, customer acquisition can be five times more expensive than customer retention is.
You need to find a way to keep the customers flowing in at a high pace, but you also need to find a way to reduce the effort involved in doing that. Essentially, you need to figure out a way to automate your customer acquisition process.
What is the purpose of customer acquisition?
The purpose of customer acquisition is to pull in more customers, generate more revenue, and offset or even overcome the negative effects of customer churn.
As your business grows and evolves, so do your customers and their needs. The goal of customer acquisition is to help you sustain a consistent or increasing flow of new customers, while growing and evolving in accordance with your customers’ needs, desires, and demands.
The whole point of it is to make sure that you don’t get left in the dust and that you manage to keep up with your customers’s preferences.
The goal of customer acquisition is to help you get new customers that you can turn into loyal clients. Essentially, customer acquisition is the first step on the path towards earning customer loyalty.
What is a customer acquisition strategy?
A customer acquisition is a plan that your business curates, and an approach that your company follows in order to reach new customers, interest them in your offerings, guide them down the sales funnel, and convince them to purchase your offerings.
The best customer acquisition strategies are based heavily in data. These strategies are built after collecting and analyzing data, understanding customer behavior patterns, figuring out marketing opportunities and then planning out your marketing activities over multiple touchpoints, preferably in an omnichannel manner, to guide customers through the marketing funnel while retaining context across all these channels, instead of making customers go back to the start.
Experimentation is the most important thing here. You can’t just assume that a strategy will play out right. Your customer acquisition strategy cannot be stagnant. Keep trying new tactics and marketing mixes, collecting data about what’s working, and shift your focus to the channels that work rather than wasting efforts on the tactics that are not as effective.
Collecting data and adjusting your customer acquisition strategy based on this data is the most important thing you can do.
What is a good customer acquisition cost?
Your customer acquisition cost (CAC) is the amount of money that you end up spending to acquire a new customer. It’s the amount of money that you spend on your sales and marketing efforts to pull in new customers.
In most cases, the higher your customer acquisition cost is, the lower your profitability is. You can think of your customer acquisition as a wakeup call.
If your customer acquisition cost is higher than your customer lifetime value, you’re in trouble. A good customer acquisition cost would be around ⅓ of your customer lifetime value.
If your customer acquisition cost is much higher than that, chances are that you’re spending more money to acquire new customers than you should be. But, if your CAC is far lower than that, you might be missing out on an opportunity to grow your business even further. You might want to consider spending a bit more on your sales and marketing efforts to get new customers into the door.
You might also want to compare your customer acquisition cost with the average for your industry, figure out what your competitors with the best CAC are doing and emulate their strategies.
Bonus: Check out this article to learn how to reduce your CAC with automation.
How to make a customer acquisition plan?
The first steps towards writing a customer acquisition plan is defining your goals. What do you want to improve and impact? Are you interested in increasing the volume of leads? Growing your website traffic? Increasing your sales volume? Acquiring higher value customers for bigger sales?
You need to define your goals and ensure that they are measurable, realistic, and time-bound.
Next, define your buyer persona. What does your ideal customer look like? Figure out their needs, wants, goals, challenges, interests, preferred touchpoints and other information about them.
After that, you’ll want to determine your customer acquisition funnel. It involves creating customer journeys for different personas and different types of leads, all the way from awareness to conversion.
Next, you’ll need to figure out which metrics are most valuable to you. Create a process to determine how and where you are going to track these metrics and what the threshold limits are below which you will have to make significant modifications to your plan.
How to accelerate customer acquisition?
Here are three powerful ways to accelerate your customer acquisition:
1. Enhance your customer experience
This might not seem obvious, but it’s an incredibly powerful way to get new customers at a low customer acquisition cost.
When you create great experiences for your customers, they are definitely going to tell the people in their circles about those experiences, earning you powerful word-of-mouth marketing at a negligible cost.
2. Create great content
You need to be creating content that delivers value to your customers and helps them with problems related to the ones that your offering solves. Not all your content needs to revolve around driving sales, make sure to focus on creating content that educates your customers. This would even cause them to share that content with people whom they know are facing similar problems.
3. Deploy a bot
Use an intelligent chatbot to engage with your customers, solve their problems, answer their questions, and even collect lead data and drive sales. You can deploy one across all your digital customer touchpoints, from your website and mobile app to all your social media profiles and even the other messaging apps like WhatsApp that you use to engage your customers.