Customer acquisition is the process of bringing new customers or clients to your business. It encompasses the entire buyer’s journey from when they become a lead to when they convert to a paying customer.
A smart customer acquisition strategy includes:
Depending on the products or services you offer, the customer acquisition process can be short or long from beginning to end. No matter how long the process takes, though, the steps for attracting, nurturing, and retaining customers are still the same.
This customer acquisition definition just touches on the process of finding and nurturing potential clients and customers. However, there’s a bit more to the process if you want to grow and optimize your business.
The customer acquisition process is always relevant and serves as the backbone of any business. It increases brand awareness, sales, and referrals and helps you retain the customer base you have. For many businesses, though, acquiring new leads feels more like a game of chance. Without the right customer or client acquisition strategies, sales can be unpredictable.
The most successful companies develop strategies to attract and convert customers on autopilot, often using marketing automation. When done right, you can nurture your customers and create loyal customers or fans for life — the kind who will recommend your products and services to their friends and family.
It’s important to measure and track your customer acquisition efforts to determine your lead generation effectiveness and costs. The best metrics to use will vary depending on the size of your company and industry.
Traditionally, companies engaged in shotgun-style advertising — or the “spray and pray” approach — to increase brand awareness in a large group of people instead of targeting specific demographics and attracting ideal customers. Essentially, they “sprayed” their messaging like shotgun pellets and then prayed that it would work. This marketing strategy works better for very large companies.
Many businesses take a more targeted approach in their marketing efforts, and below are the metrics they’ll most commonly use to assess the effectiveness of their marketing campaigns.
This metric measures the percentage of people who complete a process after starting it, often conducting a trial, filling out a form, or making a purchase. To leverage this measurement, you need a clearly defined “start” and “finish.” A change in these defined parameters will yield different results.
Many companies use highly targeted campaigns and track a lead’s progress through the customer journey, creating a great opportunity to use the customer acquisition cost (CAC) metric to analyze data. This metric can be used to calculate the cost per customer over a specific timeframe as well as for evaluating the cost of each specific customer acquisition method, like content marketing, SEO marketing, social media marketing, and email marketing. It sheds light on the success — and the return on investment — of your acquisition efforts.
One common method of calculating the customer acquisition cost involves dividing marketing costs by the number of customers acquired.
This measurement allows you to compare customer acquisition rates for various periods so you can determine if your results are improving over time. Divide the number of customers acquired during a specific period by the length of that period.
This metric is a way to measure interactions with potential customers early in the purchasing process, It allows you to determine the effectiveness of customer acquisition channels and resources like landing pages, or blog posts and identify potential areas of improvement.
Once you decide on a customer acquisition strategy, it’s important to remember that it’s dynamic and should constantly evolve as you refine your strategies. Luckily, you can do a few things to improve your customer acquisition process as your tactics evolve.
Studies show that it costs 6 or 7 times more to acquire new customers than it does to retain them. So it stands to reason that it’s critical to the overall success of your company’s growth efforts that you develop an effective retention program as well. Without this, your business’s survival might be threatened. Plus, you’d miss out on the potential for increased profits that result from increasing customer retention by as little as 5%.
Customer acquisition efforts are important to the long-term success of your business. Remember to routinely measure your results and track related costs to ensure continuous improvement. Update your strategy on a regular basis and be sure to include a retention strategy to maximize your company’s growth.
1 Customer survey conducted in 2017 among Act! customers.