When you start your business, chances are that one of the first things on your mind is how to generate revenue.
And to generate revenue, you need to know how to acquire customers.
Customer acquisition is a daunting yet necessary task for newbies and seasoned entrepreneurs alike.
Whether trying to acquire your first customer or your one-millionth one, you need to adopt a customer acquisition strategy that fits your general marketing efforts (and marketing spend).
The good news is that there are several new customer acquisition tactics that you can use to attract new customers to a business, and improve customer retention and customer lifetime value.
In this article, we’ll outline 10 customer acquisition strategies that help you on your quest to turn prospective customers into loyal customers and brand ambassadors.
What is customer acquisition?
Customer acquisition refers to the process of converting prospective customers into paying customers and can look vastly different from one field of business to another.
New customer acquisition often starts with creating awareness of your brand and business, especially for young startups and small businesses. Most businesses conduct market research and study industry trends set an acquisition budget, and build a marketing funnel as part of their customer acquisition strategy.
As the business matures, it’s not uncommon to start measuring how long those customers remain customers (customer churn) and how much value different customer segments bring to your business (customer lifetime value).
Many companies use customer relationship management tools (CRMs) to make sense of their customer data and calculate customer acquisition cost overall.
In an ideal world, you’d only spend money on a customer acquisition channel that provides you with a positive return on your investment.
The typical customer acquisition process
Most commonly, users hear about your brand and products through some form of marketing activities (different ads, referrals, word of mouth, and so on).
They might visit your online store after being intrigued by a particular product or offer, ask some questions or compare prices with other merchants. If they are convinced of your product, they’ll make a purchase and you’ve acquired a new paying customer.
The fact is that most people are more inclined to purchase from you if they feel their experience is personalized to their needs. That’s why you should start by interviewing and surveying people who represent your ideal customer segment.
Most importantly, you want to understand what challenges and pain points your ideal customer faces that your product or service can fix, and position your product or service accordingly.
By doing this you’re able to build an actually useful user persona and understand the best marketing objectives for your brand. The better you know what you want to achieve with your marketing tactics, the easier it will be to create a fully-fledged customer acquisition plan that actually converts.
10 examples of effective customer acquisition strategies
When it comes to customer acquisition strategies, some are free, but others require you to invest time and money off the bat.
When executed right, all of them can be just as effective in bringing in new customers and increasing your bottom line.
In reality, the acquisition tactic you choose comes down to how much budget and resources you have available, so be realistic and honest with yourself.
1. Landing page – for highlighting new products
Here’s a customer acquisition strategy that’s free as well as easy to implement.
Most often landing pages are used for lead generation, but that doesn’t mean it’s not a viable avenue for client acquisition.
When used as a customer acquisition tool, a landing page’s primary goal is to convert customer prospects. That’s why landing pages are usually designed specifically around a conversion goal.
For instance, if you have a new product or plan on launching one soon, you can create a landing page dedicated to that product. On this page, you will mention the features and characteristics and the price for that product.
This allows your website visitors to learn everything they need to know about this product in order to help them make a purchasing decision.
How to use a landing page for customer acquisition
Since your marketing objective for building the landing page is customer acquisition, you need to design your page in a way that attracts customers and allows you to achieve your goals.
If your objective is to sell a particular product, you will need to analyze your users’ behavior when they land on the landing page. Tools like heatmaps or Google Analytics are valuable to help you track sales, and customer churn, as well as make data-driven decisions for new customer acquisition campaigns.
You can also run A/B tests of different web designs to see which version of your landing page converts better when it comes to acquiring customers.
- Free and easy to create. You can use website builders to get the job done quickly.
- Great for direct sales. By using search engines and pay-per-click advertising you can expect high volumes of traffic, and by extensions conversions, and sales.
- Requires traffic to work. In order to start acquiring customers through landing pages, you need to have steady traffic to your website.
- Your copy needs to be spot-on. Since your landing page is doing all the selling, you need to make sure you’re setting your brand apart from your competition.
2. Influencer marketing – more visibility and trust
Looking for customer acquisition channels that build trust and expose your brand to the crowds, big time?
You should consider influencer marketing as a way to acquire new customers for your business.
You simply partner up with influencers who will introduce you and your brand to their audience, in exchange for a fee. Most often, influencers are paid a fixed rate per campaign, or continually per conversion.
For example, you could partner with a YouTuber who creates a video dedicated entirely to talking about your business or product, usually by reviewing it.
Another possible way to work with YouTubers is to have them casually mention your product or company and sponsor one of their videos, be it a vlog or other regular content they produce.
How to use influencer marketing for customer acquisition
Influencer marketing can be one of those successful customer acquisition methods if you partner with influencers who work in the same niche as you.
You can find influencers on many social media platforms, but you need to choose the best platforms for your target audience if you want to retain customers in the long run.
- It can help you expand your brand awareness. You can give your brand more exposure by working with popular influencers with big audiences.
- It is an efficient way to build trust. Your audience doesn’t need to take your word for your own brilliance – instead, someone they trust is doing the endorsing.
- It can save you time. Since you will be outsourcing the marketing activity, in a way, you can focus on more pressing matters.
- It can cost you a lot of money. Influencers are costly and know their worth.
- Finding the right influencer might be tricky. You should consider carefully who you partner up with, as the wrong associations can be harmful to your reputation.
3. SEO – long-lasting effects
Search engine optimization is the set of methods and strategies used to help a website generate organic traffic by appearing higher in the results on search engines. SEO is a long-term strategy for acquiring new customers, so it will take some time for your efforts to show.
The great thing about SEO is that it can be done absolutely for free.
Your SEO-optimized content will not only help you develop a relationship with your potential audience, but you can also expect it to boost overall traffic to your online store or website.
The style and general content of your SEO copy will differ depending on the overall customer journey your business has.
For example, people who don’t know much about your brand or product usually look for informational content. This could be in-depth articles detailing different uses for your product, or a comparative analysis of your product and those of your competitors.
How to use SEO for customer acquisition
To successfully use SEO for customer acquisition, you will need to develop a content strategy that addresses your target audience’s questions, pain points, and fears throughout their journey.
Before you start planning your search engine optimization strategy, you will need to understand your customer’s journey and how they find your business in the first place.
By understanding the customer journey you will be able to identify the kind of keywords you will have to target to reach the right people at the right moment.
- A great source of free traffic. The more free traffic, the more customers acquired in the long run.
- High conversion rates. Great keywords research will help you target keywords that are not too difficult but that have enough search volume overall.
- SEO takes time. You will need time and patience before you start seeing tangible results.
- SEO is a constant learning process. Since Google keeps updating its algorithms, you too need to find the time to stay on top of the new changes regularly.
4. Paid advertising – fast and targetable
Since SEO takes time to start showing results, one of the fastest ways to reap the fruits of your customer acquisition efforts is focusing on paid advertising.
Unlike earned and owned advertising (like having a physical store location on a high street or unpaid celebrity endorsements), paid advertising refers to all advertising channels a company spends money on, from direct mail to TV and search engine ads.
How to use paid advertisements for customer acquisition
When it comes to online marketing, paid search marketing, display advertising, and social media advertising are worthy investments, if measuring the total number of customers acquired per channel.
Paid search ads are the ads you see at the very top of the search results on Google. They target particular keywords and are ranked based on relevance and overall quality, among other things.
Display advertising, on the other hand, allows you to use banners on websites that direct visitors to your website when they are clicked. Often, display ad banners contain a call for action that aims to persuade people to perform an action, such as buying a product or signing up for something.
And finally, social media advertising is among the best ways to achieve high click-through rates since most social platforms allow you to segment your target audience.
- Fast. Compared to SEO, paid ads are often faster when it comes to achieving results than relying on solely organic traffic.
- Specific. Often you can target a specific audience based on their likes, behavior, and more.
- Easy to track. Facebook, for example, has extensive business tools to help you track the results of your campaigns and optimize accordingly.
- It can be costly. It’s in the name – paid advertising costs money, so make sure to keep track of your customer acquisition cost and overall marketing costs.
- Low conversion rate. Until your campaigns are optimized and you know how each advertising channel works, you shouldn’t expect too high a conversion rate.
- Ads can annoy customers. Many people avoid clicking on ads and might even find them annoying, which can negatively affect your overall marketing costs and conversions.
5. Content marketing – all about creativity
Content marketing is one of the most powerful customer acquisition and marketing techniques out there.
You can achieve a lot with a targeted marketing strategy that focuses on providing your potential customers with unique and valuable content.
How to use content marketing for customer acquisition
You’ve probably heard of inbound marketing, a popular marketing strategy among digital marketers. It consists in using content to create tailored experiences for your potential customers.
By focusing your marketing efforts on creating personalized experiences, you will build strong relationships with your audience and prospects. The customers acquired this way are often loyal to the brand, with high lifetime value overall.
Coupled with an SEO strategy, content marketing helps tremendously in customer acquisition because it targets specific people and offers them valuable content. This creates trust and positions you as an expert in the field.
- Builds brand awareness. Content marketing reinforces the loyalty of already acquired customers and helps you establish your brand in general.
- An organic acquisition channel. You have a higher chance of reaching people who avoid or ignore ads.
- High conversion rate. Tailored content can result in a higher number of customers acquired.
- It is time-consuming. For this type of customer acquisition to work, you need to understand the customer journey and what kind of content the prospect needs at all different stages of their buying journey.
- Requires know-how. You need to know how to produce different types of content and how to distribute it in the right way.
6. Social media – highly engaging
You’ve probably heard it before, but creating a strong online presence on social platforms is one of the most effective customer acquisition channels.
With billions of people online on Facebook alone, you could be missing out by not using these channels to acquire new customers.
For this customer acquisition strategy to work, it’s worth learning where your targeted customers spend their time online and identifying the best times to post on social media.
It’s also one of those customer acquisition methods that won’t require a lot of prior experience, either. Since Facebook is the most popular social network globally, you can start developing a plan to post regularly on your business page, and begin experimenting with the extensive (and free) marketing tools.
If you want to post on multiple channels, keep in mind that there are many great tools you could use to help you plan and implement a successful social media marketing strategy for your brand.
How to use social media for customer acquisition
The likes of Facebook and Instagram can be great places to learn more about your target audience. It’s easy to gather data about what potential customers like and identify the challenges they face in their daily life.
Social platforms are also a great place to find partners to spread the word about your brand to the masses – and help you acquire new customers.
But relying on partnerships is only the beginning: user-generated content is an easy and effective customer acquisition strategy that does not require a lot of time and effort but can generate great results.
- Feedback. Thanks to direct messages, comment sections, reactions, and more, you have immediate access to feedback, at all times.
- Engagement. Having a social presence makes it easy to engage more closely with users, old and new.
- Specific. Since you can segment users or work together with influencers who cater to a particular niche, you can create specific content for your chosen social channel.
- Time constraints. It can be time-consuming to stay on top of all comments and messages.
- Different formats. You will need to know which channels have specific formatting rules or specifications in order to optimize your social content.
7. Video content – good attention grabber
Maybe your customers are busy and don’t have time to do a lot of reading. That’s where video content could help with your customer acquisition efforts.
Go ahead and create a YouTube channel and start posting there frequently. Videos are easy to watch and can be more engaging than other forms of content.
You might need to learn how to produce videos that truly catch the attention of the public. But it’s worth taking the time to understand what you’re doing – if you manage to go viral, you’ll hugely improve your brand awareness fast.
How to use video content for customer acquisition
Video content is one of the most effective ways to attract and engage new and referred customers.
Don’t just take our word for it – Cisco predicts that video will account for 80% of all internet traffic by 2020.
Uploading videos to your website and social media channels is a simple way to try video content out as part of your customer acquisition plan. Make them easy to find, interesting, and relevant to your target audience.
Creating a buyer persona that inspires your content creation and planning is crucial for success. By putting yourself in your customers’ shoes, you will be able to create content that speaks to them.
- Quickly captures attention. Compared to text content, video catches the eyes of many new customers.
- Easy to repurpose. Video content can easily be repurposed: whether you want to use just the audio in a podcast or the transcript as a blog post, or use a quote on social media, there are plenty of options.
- Costly. Producing high-quality video requires some upfront investments into equipment and editing software.
- Requires know-how. In order for your video content to work effectively in your customer acquisition campaigns, you need to know how to produce and distribute your content correctly on different platforms.
8. Email marketing – good lead generation investment
Email marketing is all but dead – in fact, it can be a powerful way for acquiring new customers for your business.
The key to effective email marketing is to collect transparent opt-in from all newsletter subscribers and provide them with content relevant to their interests and needs. This could mean sharing behind-the-scenes news with your subscribers or offering insights on how to use your products most effectively.
There are plenty of free email marketing services to get you up and running, but just remember that your content needs to be top-notch and should stand out from the competition.
How to use email marketing for customer acquisition
When it comes to managing customer prospects with email marketing, there are a few things to keep in mind.
You should always make your offers explicit. Good customer acquisition management always starts from clear communication, and your emails are no different: make sure users understand what you’re offering them from the subject line onwards.
You also want to keep your emails short and to the point. People are busy, so rather than sending out newsletters that go on and on, link to a landing page, a blog post, or other content available on your website, instead.
- Cheap. Compared to many other acquisition strategies, email marketing is very cost-effective and a perfect solution for folk on a budget.
- Easy to automate. Setting up email marketing flows helps you personalize and customize the overall user journey in your online store and schedule content for when you’re on holiday.
- Can be slow. Collecting a sizeable subscriber list that starts to convert can take time.
9. Referral programs – low-cost way of building loyalty
A referral program encourages customers to refer their friends and family to your business in exchange for a reward.
Incentivizing existing customers to refer their friends not only helps you acquire customers, but all word-of-mouth marketing also builds loyalty and trust towards your brand.
A referral program is hands down one of the best tools to include in your customer acquisition strategy, as referred customers tend to trust your products and services more from the start.
Additionally, referral programs are a low-cost way to acquire new customers, so it suits many budgets and businesses alike.
How to use referral programs for customer acquisition
Wen setting up a successful referral program, you have to make it easy for people to refer their friends.
If the flow is complicated or long, chances are that people just won’t bother.
You should also offer rewards for referrals. Can you offer monetary benefits, like a discount, free shipping, or other freebies to both existing customers and referees alike?
- Cheap. Setting up a referral program requires minimal investment, often a landing page and user-specific referral code get you going.
- Effective. When done well, referrals can work a treat when it comes to customer acquisition management overall.
- Requires optimization. Chances are that you need to experiment with the right reward in order to find the sweet spot that works for you and your customers.
10. Affiliate marketing – entirely performance-based
Affiliate marketing rewards third-party affiliates for bringing customers to the merchant’s online store or website, usually via referral traffic.
Best part? As it’s an acquisition strategy that is entirely performance-based, you don’t have to worry about up-front costs.
The most successful affiliate marketers are those who create valuable content that’s actionable and useful for their audiences. Top affiliates also build trust with their audience and develop relationships with them.
When done correctly, affiliate marketing can be a wonderful and cost-effective customer acquisition strategy.
How to use affiliate marketing for customer acquisition
Affiliate marketing is a great way to attract more customers, but it’s not as easy as slapping an affiliate banner on your website and expecting the sales to start rolling in.
To make affiliate marketing work for customer acquisition, in particular, you need to put in a bit of effort to make sure you’re attracting the right kind of affiliates to your business.
You also need to understand the most common pricing strategies affiliates operate with, and understand how much you can afford to pay your partner per conversion.
- Inexpensive. Since you only pay for people who fully convert into customers, affiliate marketing is a cheap customer acquisition strategy to implement.
- Increased web traffic. The more people are promoting your website, the more traffic you should expect your website to get.
- Risking reputation. Sometimes you might put your business in jeopardy if you partner up with the wrong affiliate, so make sure you understand who you’re dealing with and do your research.
- Poor performance. Some affiliate programs don’t perform well, no matter how many times you renegotiate your commission with the partner.
CAC: calculating customer acquisition cost
When you are starting a new business, one of the key metrics you need to pay attention to is your customer acquisition cost (CAC). This is the amount of money you spend to acquire a new customer.
There are a few different ways to calculate your CAC.
One way is to divide your total marketing expenses by the number of new customers you acquired in that period. Another way is to divide your sales and marketing staff’s salaries and benefits by the number of new customers you acquired.
No matter how you calculate it, it’s important to track your CAC so that you have an idea about your ROI (return on investment).
What is the right customer acquisition cost ratio?
The right customer acquisition cost ratio varies depending on the industry and the company. However, a few general rules of thumb can help businesses determine what their optimal ratio should be.
First, it is important to remember that customer acquisition costs should never exceed lifetime customer value. In other words, the cost of acquiring a new customer should not be more than the revenue that a customer will generate over the course of their relationship with the company.
Second, it is important to calculate customer acquisition costs accurately. This includes all costs associated with acquiring a new customer, such as advertising expenses and marketing materials.
Build a sustainable customer acquisition strategy for your business
The best way to attract new customers is to put yourself in their shoes. Once you understand how they think and what they value, it becomes much easier to position your product in a way that’s attractive to your prospects.
No matter which customer acquisition method you choose, it’s important to always track your results and analyze what’s working and what’s not. This will help you to fine-tune your campaigns and improve your ROI in the long run.