Attracting the right target audience for your business has never been an easy feat — customer acquisition holds a lot of challenges for companies in all kinds of industries. Even if you have the best product in the world, it doesn’t matter if you don’t have customers to whom you can sell the product or service.
The problem is, even the most experienced entrepreneurs face uncertainty and inconsistency when it comes to successful sales and marketing techniques. There’s always some level of risk, but that makes customer acquisition all the more important. Customer acquisition isn’t a result that your business will experience; it is a process that balances risk, strategy, cost, and other factors as you bring on new customers. These acquisition tactics are an essential part of your overall business strategy as you seek out people who need and will use your services, which is why companies are putting more of their own resources towards effective customer acquisition.
This article will discuss customer acquisition in detail and explain the most critical stages and best acquisition practices for your company to implement.
What Is Customer Acquisition?
Customer acquisition is the process of discovering, attracting, and onboarding new and prospective customers that will benefit from and enjoy your business offering. This process is strategic, measurable, and repeatable—or in other words, it doesn’t leave bringing in new customers to chance. Some businesses sell B2B or B2C, but whomever your primary consumer is, they must be persuasively, systematically, and intentionally encouraged to interact with your business.
Having a consistent and reliable customer acquisition strategy is how your company can develop consistent and reliable revenue. The customer experience is largely influenced by the acquisition strategy and should be woven throughout your marketing plan, helping solidify a trustworthy and impactful connection between your advertising and the right customers.
Why Is Customer Acquisition Important?
Now that we understand the purpose behind customer acquisition, it’s time to delve into the benefits of having a strategy in place. Without intentional customer acquisition, it’s far more difficult to reach the people who need your services and continue to grow your business. The most notable benefits include:
- Greater brand awareness. Especially with how massive the online business world is, it’s imperative that your business cuts through the noise and establishes itself among your competitors. Getting customers helps spread information about your brand, and with a great strategy, you can determine how people see and interact with your business.
- Increase in sales and opportunities. As your brand awareness increases and when you create a seamless customer experience on your website, you’re going to drive up revenue and sales. This will help your business grow and allow you to try new business ventures to expand even more.
- More relevant consumers. Customer acquisition helps you determine your primary customers and attract those people. This way, you can market to the right people and connect with the best groups and communities, which drives the most relevant consumers to your business.
Customer acquisition ultimately ensures that the right people are looking at your business and engaging with your services, which helps establish a solid customer base and drives sales. This is especially important for newer businesses or businesses that want to go after specific or different audiences.
As you build that customer base, you can place greater focus on a customer retention strategy, which helps fortify your business long-term by satisfying loyal customers. If your company keeps acquiring new customers but doesn’t retain current customers, the job isn’t being done quite right. The best way to have a successful retention strategy is to invest in a successful acquisition strategy so that you can attract the best consumers from the beginning and then find the most effective ways to satisfy those customers.
What Are the Stages of the Customer Acquisition Process?
Customer acquisition has specific stages that create a natural flow from attracting leads to converting them into loyal customers. There are essentially 3 stages your customers will move through as they interact with your company: awareness, consideration, and decision. These phases each have different purposes and strategies, as well as subsections that break down the process.
One way you can visualise and better understand this process is to imagine a funnel. Your customers start with a broad or vague interest and are moved through the funnel until they become more serious about deciding on your product or service.
Awareness (Top of the Funnel)
The awareness stage is largely about generating leads within your target audience and making them “aware” of a potential problem or opportunity they have that can be helped using your business. These consumers don’t necessarily have the intent to buy yet, but by seeing your ads on their social media channels or reading an article from your website, your business is generating awareness, interest, and potential leads.
For example, let’s say a fitness and wellness company wants to bring more awareness to its new line of workout equipment. If they want to target people who may work from home (who also exercise at home and likely need workout equipment), they could use a hashtag like #workfromhomefitness and then create relevant content to post on social media. This generates more awareness and interest in both the topic and your company for people with this search intent.
Consideration (Middle of the Funnel)
This phase of customer acquisition includes potential customers who have shown interest in your product by taking an action that indicates their intent to make a purchase. If someone subscribes to your email chain or clicks on an ad, they are putting your company in their consideration pool. They now know they want or need something and are considering your product or service and likely comparing it to competitors’ options. The ball is back in your court during this phase: how can you persuade them to become a customer?
Let’s continue using our fitness company example. Say the hashtag your social media team used has earned you some followers and the articles you post about at-home workouts are being clicked on. Even better, some people have hopped over to your online store after reading through your article to find workout equipment they can use at home. These online consumers are moving into the consideration phase by actually engaging with your content, visiting your website, and considering what you have to offer.
Decision (Bottom of the Funnel)
Finally, there is the decision stage, which includes the last steps to becoming a customer. Most often, this is indicated by prospective customers taking some kind of action that shows their serious interest to purchase, such as signing up for a free trial or adding something from your store to their cart. Your customer acquisition strategy shouldn’t drop the ball here, either; some companies offer discounts or send follow-up emails to those who are close to making a decision and need a final push in the right direction.
If the fitness company brings people to its website using ads and articles but doesn’t actually see any purchases, it would be losing customers in the decision stage. This company could create automated emails that are sent to customers with items in their cart to encourage them to finalise their purchases.
How Is Customer Acquisition Measured?
Measuring your CAC (customer acquisition costs) is extremely important because it helps you know how far your dollar is reaching and if there need to be adjustments to your acquisition strategy to better use monetary resources and increase ROI.
CAC includes the expenses it takes to bring on new customers or clients like marketing efforts, events, and advertising. To calculate CAC, divide any marketing costs from a specific campaign by the number of customers acquired from that campaign. Say that you spend $10,000 in Q1 on the year and gain 200 new customers. You would have a CAC of $50.
What Are Customer Acquisition Channels?
Acquiring a customer can be done using all kinds of mediums and channels; wherever there may be potential leads, you can incorporate those channels into your customer acquisition strategy. In fact, you need to use a variety of marketing tactics and channels to cover all of your bases.
You may even have some cross-channel marketing campaigns that use several channels in tandem to cast a wider net. Depending on your target audience, the lead generation data you have, what you sell, and the resources you have, you can identify the most effective channels for your business that have the greatest impact on your revenue.
Some of the best channels that you can try (or optimise) include:
- Content marketing
- Content offers
- Social media
- Search marketing
- Email marketing
- Paid advertising
- Influencer sponsorships
- Referral programs
- Traditional advertising
- Search engine optimisation
- Event attendance
What Are the Best Customer Acquisition Practices?
How your business acquires customers can be completely different from others, but there are a couple of standard practices that will make the most of your acquisition resources. As you design your strategy, follow these pro tips to protect and optimize your efforts.
- Create a sustainable strategy. Some projects may require more money than others, but what you really want to do is design a repeatable strategy that you can sustain long-term. This ensures that resources you put towards marketing and customer acquisition are put to good use and justifiable when it comes to budgeting.
- Prioritise flexibility. The market you are working in is never going to stay exactly the same, and both people and competitors are unpredictable. That’s why you need to build flexibility into your strategy so that you aren’t solely relying on one department or short-lived customer responses. The more you can adjust to market trends, the better!
- Discover your target market. It may be tempting to market to anybody and everybody, but it’s much more profitable to find your niche audience and market to those people who actually need and want your product. Before you invest your money in customer acquisition, you need to have a defined target market with customer personas, determine the most applicable marketing channels, etc.
- Diversify your approach. Especially if you hit a wall (or if you’re ready to expand your business reach), you can try new channels or combine different customer acquisition methods. If one channel you’ve used in the past begins to bring in fewer leads, it may be time to switch to a new channel.
- Define your strategy & design a plan. The name of the game when it comes to customer acquisition is intentionality. You need to have a detailed game plan that is driven by data and industry-specific practices. Plot out your acquisition stages, invest in the right customer acquisition tools, and clearly lay out your goals.
Customer Acquisition Real-life Example
Customer acquisition comes in many forms, but you can start by leveraging multimedia feedback from current customers to improve the overall experience with your company. When customers have a positive experience with your company, their feedback is invaluable and can have a huge impact on future customers. InMoment offers multimedia feedback, which allows customers to engage in whatever feedback medium that works best for them, such as video, image, or voice.
This also encourages them to engage with your brand on social media! One InMoment client in the global sports retail industry used multimedia feedback surveys for their customers and encouraged them to post their feedback on social media. This helped them spread positive feedback online in a personal and trustworthy way and boosted the company’s reputation.
Optimise Your Customer Acquisition Strategy with InMoment
The online business world is constantly changing and so are the ways to acquire new customers, and remember: at the heart of a good strategy is retention because retention is what keeps lifelong customers. As you perfect your customer acquisition strategy, you can also perfect the customer experience using InMoment CX tools and feedback. Use the following checklist to ensure your customer acquisition strategy is foolproof.
Check our customer acquisition strategy checklist today!