Do you know what is the hardest thing about starting and growing a business? It’s good to know that for many businesses, the answer to this question is one word: Customer acquisition.
Customer acquisition refers to the process of gaining new customers or clients for a business. This process involves identifying potential customers, reaching out to them through various marketing and sales channels, and convincing them to purchase a product or service. The success of customer acquisition strategies is often measured by the cost of acquiring a new customer, known as the Customer Acquisition Cost (CAC), and comparing it to the value that the customer brings to the business, referred to as Customer Lifetime Value (CLV).
Just having a product or service that you’re sure a lot of people need doesn’t guarantee customer acquisition.
Or just because you have a business doesn’t mean that a customer will find your store or your website or your social media pages. You have to give yourself a push and go to find & attract prospects.
In fact, most business owners are still finding customers even after their business has grown in popularity. Do you know what customer acquisition is and how you should do it?
We are here to shed light on everything related to customer acquisition.
What Is Customer Acquisition?
To understand how prospecting is done, you must first understand: What is customer acquisition?
Customer acquisition refers to the process of attracting potential and new customers for a business or organization.
This usually includes a variety of marketing strategies and sales tactics, such as advertising, social media campaigns, email marketing, content marketing, telemarketing, referrals, networking, direct marketing, events, etc.
Customer acquisition: The fuel of the sales cycle
Sales always happen in a cycle, a cycle that is constantly moving and needs fuel to keep moving. This is the fuel of customer acquisition.
The sales process includes three basic and main stages:
The first stage is searching and finding customers;
Then presenting the product and convincing the customer to buy from you;
And in the final stage, it’s to follow up and finalize the sales process, that is, to buy right at that moment.
It’s worthwhile to mention, for a successful sale, 90% of time and energy should be allocated to the first & second stages and only 10% to the third stage.
Customer acquisition: The main bottleneck in the sales process
The most powerful and fruitful word in the field of sales, customer acquisition means searching for customers and finding them.
Customer acquisition can be considered as one of the main bottlenecks in the sales process.
Always remember that success goes to the business that is most creative in finding new customers and markets.
Customer acquisition is the most important activity in developing a successful sales system.
Keeping sales leads and referral rates high is the key to the economic survival and effectiveness of your organization’s sales funnel.
Your sales funnel is your inventory of potential customers. Each customer has their own conversion rate to pass through the funnel and become a loyal customer;
That is, the time it takes to pass through the funnel. The amount of emphasis on prospecting can vary in different areas of sales, but ultimately, your success will be determined by the quantity and quality of leads in the funnel.
Prospecting and constantly researching your market, be it local or global, is the key to any business.
All other activities revolve around your ability to keep the sales funnel full.
However, one of the major oversights of many salespeople and marketers is that they don’t spend time on the emptying funnel.
They get so excited about the new leads that they forget to stay focused on their commitment to prospecting.
But, after a short time, they find that their funnel is empty and they panic.
This can be disastrous, as it can take weeks or months for another potential customer to enter the funnel.
Why is customer acquisition important?
As the first step in the sales process, prospecting is essential for the growth and success of your business.
As a rule of thumb, if you don’t have qualified leads to reach, you won’t get many customers.
As you become better at finding potential customers, you’ll increase your chances of finalizing business deals.
According to a study by the Rain Group, the top salespeople in prospecting secured 52 sales meetings per 100 target leads. This is while other sellers only created 19 meetings per 100 contacts.
Furthermore, almost half of the top performers achieved their personal sales targets, while only about a quarter of the other salespersons accomplished the same.
Customer Acquisition Channels
Customer acquisition means getting new customers for your business to grow and succeed.
To do this, it’s important to identify the channels that work best for you to reach potential customers.
There are many different channels you can explore, but in this section, we’ll walk through some of the most popular prospecting channels for businesses today:
1. Social media marketing
Social networks can be considered one of the best places to reach and establish relationships with potential customers, i.e., customer acquisition.
Social media marketing involves using platforms like LinkedIn, TikTok, Facebook, Twitter, Instagram, etc. to reach prospective customers.
Do you have followers on social media?
If you don’t bother them with too many sales posts, they’ll be your likely customers.
So you need to know that the most important aspect that you should focus on when using social media is engagement.
You can interact and talk with your LinkedIn connections or followers, and get to know them, and connect with them.
Besides, social media activity is also one of the cost-effective ways to influence and attract customers.
Therefore, if you use the social media platform correctly, you’ll have the opportunity to find a large number of audiences in a short time.
Here are some hot tips about using social media that you should pay attention to:
- Focus on a few social networks at a time and gradually expand your audience.
- Make your website and social media pages handy to use for people so that they can easily give you their contact information.
- Research popular social media and identify your customers.
- Create business pages for your company on the desired social media such as LinkedIn.
- If it’s difficult for you to be active on several social media, be present on only one of them where you see potential customers.
2. Content marketing
When you share high-quality and useful content via your blog or personal & business pages, many people will become aware of your business, interested in your services or products, and possibly request your next content; This is content marketing.
In this type of marketing, businesses try to help readers by sharing Learning, entertaining, or informative content.
The result of this process can show itself in the form of changing the behavior of the audience or, as the marketers want, in the form of a decision to buy.
In fact, in this type of marketing, businesses don’t force the audience to buy; Rather, they help them to make the best decision, and perhaps their best decision is to purchase them.
The purpose of this method of marketing is to attract and retain customers by producing and organizing valuable & appropriate content with the intention of changing or strengthening client behavior.
As a whole, content marketing is a continuous practice that works well within your overall marketing plan and emphasizes the importance of creating your own media rather than relying on rented media.
3. Email marketing
Email marketing is another great way to communicate, attract, and retain prospects and introduce your products or services to them.
This involves sending targeted emails to people who have expressed interest in what you have to offer, with the goal of converting them into customers.
The content of your message can include advertisements, practical content, attractive & different discounts, offers, etc.
To get started with email marketing, it’s important to first build a list of potential customers who have given you permission to contact them.
This can be done by offering incentives such as free resources or newsletter subscriptions in exchange for their email address.
The good news is that you can go for email marketing at any stage of your marketing strategy, such as branding & brand awareness, persuasion to buy, loyalty, customer retention, etc.
The use of email has very high capacities that in many cases, people are unaware of them and cannot benefit from it properly.
For example, you can use email marketing to announce events, discounts, or special offers you have in mind, inform you about new products or services, send new information, etc.
4. Referral marketing
This is a great way to grow your business and get new real & trusted customers.
Basically, it’s all about discovering your existing customers to tell their friends and family about your products or services.
With the rise of digital marketing, can referral marketing still be effective? Yes, of course, people are more likely to trust the recommendations of someone they know than the advertisements of a company.
So when your satisfied customers tell their friends about how great your business is, it can really make a big impact.
To start referral marketing, simply ask your current customers if they know anyone who might benefit from your products or services.
Plus, you can offer incentives like discounts or freebies to encourage referrals.
This can make it easy to share your business with others by providing referral links or social media posts.
Overall, referral marketing can be a powerful channel for finding new customers and growing your business.
So don’t be afraid to give it a try!
5. Paid advertising marketing
Another important channel to discover and attract your potential customers is paid advertising marketing.
According to Wikipedia, paid advertising is a paid model and approach for online advertising that is used to drive traffic to websites, and this model is also known as banner advertising or PPC advertising, which stands for pay-per-click advertising.
In simpler terms, whenever an audience clicks on your ad, you pay the publisher, which is usually search engines, mock websites, social media, etc.
With paid advertising, you can create eye-catching ads that grab attention and promote your products or services.
There are different types of paid advertising, such as search engine marketing (SEM), social media ad, display ad, and more.
Each has its own strengths and advantages.
For example, SEM allows you to bid on keywords relevant to your business so that your ads appear at the top of search engine results pages.
Social media ads allow you to target specific demographics based on interests, age, location, and other factors.
One of the best things about paid advertising is that it’s measurable.
That is, you can track how many people have seen your ad, how many have clicked on it, and how many have become customers.
However, this allows you to optimize your campaigns over time and get the most return on investment (ROI) for your marketing dollars.
According to what was said, this type of marketing can bring you to your business goals faster by reaching new audiences.
Just remember to set clear goals, target your audience effectively, and constantly test and refine your campaigns to get the best results.
Key Tips to Enhance the Customer Acquisition Strategy
Every successful salesperson must use effective customer acquisition techniques and strategies for successful sales.
So looking for creative ideas and the best tips to improve your customer acquisition strategy? You’ve come to the right place!
In this part of the article, we’ll teach you the most important and best techniques that lead to customer acquisition, as well as help you to do the prospecting process faster and better.
1. Improve the quality of your website and optimize it
Is the quality of my website good? This is a question that anyone who owns a website should ask themselves if their website is capable of attracting new customers.
Most of the websites have various defects due to the lack of quality resources.
The ease of use of your website is of the utmost importance because the more accessible a website is, the more interaction there will be.
The main purpose of identifying this issue is whether users can easily access the website and purchase it or not.
Also, make sure that every page of your website has the necessary coordination and connection with other things in your profession.
In general, your website should be both optimized and high quality to provide a seamless user experience, showcase your products or services, and convert visitors into customers.
Keep in mind that elements like a clear call to action (CTA), easy navigation, and mobile responsiveness are critical to a successful website.
2. Partner with investors or vendors who aren’t your competition
The easiest way for you to be introduced to a company is through referrals from those who have already sold a product to that company.
Hence, it’s highly recommended to seek out these relationships and share your solutions with them.
Investors who have previously worked with a company, especially those in an advisory role, have comprehensive and detailed information about the company’s needs.
If they can identify a problem that you can solve, they’ll no doubt refer you.
In this way, you can share your customers with each other and benefit from new and reliable customers.
However, every businessman has a number of colleagues.
If you can have a good relationship with your colleagues and offer a good product, you can be sure that these colleagues will become your clients and buy from you or introduce other customers to you.
Although this method may not be new, it’s very effective.
For example, if you’re in the clothing business and your colleague is in the children’s clothing business, you can commit to introducing your customers to each other.
That is, sharing customers is also a good idea for customer acquisition.
3. Create a specialized group on LinkedIn or join LinkedIn groups
This creative prospecting idea allows you to make professional contacts in a specific field or industry and connect with a wide group of potential clients.
For example, if you’re engaged in the field of selling construction materials, you can look for groups of investors or real estate consultants, contractors, or architects.
To get more engagement with qualified leads in the group you’ve joined, try to react to valuable and relevant content, for example, comment, repost, like, etc.
On the other hand, when you’ve created groups on LinkedIn yourself, get to know the people in your group before you start introducing yourself and offering your products or services.
Participate in conversations and discussions in groups, create value by answering their questions, and share useful resources with them.
If someone asks you a specific question that you know your product or service can answer, tell them you’ll privately message them the details on LinkedIn.
When you send them private messages, you reduce the chance of losing your future prospects to a group that may not be ready to hear your sales pitch right now.
4. Monitor your successful competitors
This is another great technique for prospecting.
See where your competitors usually advertise. Where do they market? What tricks do they use? What do they do to acquire customers?
However, the strategies they use to help them advance their careers may be useful for you as well.
You may not have a huge marketing budget, but you can find ways to focus your marketing efforts on them.
You may even find flaws and weaknesses in your competitors’ marketing activities, what they should be doing and not doing.
It’s interesting to know that maybe this case will provide an opportunity for your investment and through that, you’ll get a percentage of the market share.
It’s worthwhile to note that competitive analysis has become an essential part of any business.
However, knowing them will help you to act with confidence in your performance.
Remember that when analyzing your competitors, look for a tailored approach that can help your business.
So, analyze and interpret competitors’ industry reports, strengths & weaknesses in social networks, and content marketing strategy.
5. Attend your clients’ events
As an important principle, remember that your buyers can relate to other potential buyers.
That’s why the events they organize are a gold mine for you.
Try to reach out to your current customers at least once every three months and maintain your relationship with them.
For example, tag your customers on your LinkedIn posts, send them a relevant article, congratulate them on their recent achievements, or introduce them to another business in your network of colleagues that could benefit them.
Keep in mind that having these connections will get you invited to their events.
However, it’s suggested you visit their website or LinkedIn pages or sign up for their newsletter to keep up-to-date with their plans.
Then ask the client to participate in the event if possible. Since you’ve created value for them, they’ll welcome your offer.
On top of that, even try to sponsor their events.
6. Mail books to your potential customer
Another creative marketing idea is to send books to your potential customers.
Everyone from junior employees to senior executives likes to receive gifts.
After receiving a book as a gift, your customers will respond to your email, message, or call with more enthusiasm.
In addition, by sending a specialized book in their field of work, you’ll have the opportunity to show them your knowledge in this field and your understanding of the client’s needs and challenges.
To use this technique, it’s better to find their interests and goals.
You can take a look at their LinkedIn profiles to learn about their interests, goals, plans, work experience, skills, etc.
Getting this information can help you understand what their concerns are and find a book with a related topic for them.
Send the book to the client with a note explaining why you think it will be useful to them.
7. Start blogging
Having a blog and writing useful articles and posts is a great way to find customers and introduce yourself as an expert in your field of expertise, and it benefits you in two ways.
First, it shows your expertise in your field and industry, and second, it provides valuable information to people who are looking for your products and services.
Basically, customers are always looking for someone who is aware of their specific issues.
Always try to create compelling content, then people will trust you, and as a result, you’ll be able to attract them.
To improve the content you want to share, it’s necessary to always choose a topic that is relevant and interesting to your audience before you start writing your content.
Make sure you convey the value of the topic to your audience, answer their questions, solve their problems, and earn their trust.
This will make them remember you if they want to use your services.
So try to provide valuable and honest advice to your customers through your posts & articles on your social media pages like LinkedIn.
8. Allocate perfect timing for the customer acquisition
When it comes to customer acquisition, scheduling is everything!
You want to ensure you’re reaching out to prospects at the right time – not too early and not too late.
Correct and accurate time planning for customer acquisition activities is very important to get the desired result.
So how do you know the timing is accurate and perfect? Well, it depends on your business type and your target audience.
For example, if you’re selling stationery and back-to-school supplies, you should launch your marketing campaigns in the summer months before school and university start.
On the other hand, if you’re selling holiday decorations, you should start your campaigns in late October or early November.
It’s also worthwhile to consider external factors that may impact the buying behavior of your target audience.
For example, weather conditions, cultural events, and even economic factors can all influence when someone is most likely to buy your product or service.
That being said, the key is to do your research, gather data, and use your best judgment to determine the ideal time to acquire a customer.
In general, try to set aside time daily or weekly for prospecting.
However, as you know, customer acquisition is not an easy task – more than 40% of sales professionals believe that the prospecting process is a major challenge for the sales team.
By timing your prospecting campaigns perfectly, you improve the long-term performance of your sales team.
Professional salespeople who prospect at least weekly have been proven to be more successful than those who don’t prospect regularly.
Pipelines and funnels are built to have a steady flow and organizations and sales teams that balance lead acquisition and lead nurturing grow faster than other businesses.
Finally, remember, don’t be afraid to adjust your strategy as needed – flexibility is key in the ever-changing world of business!
Customer Acquisition Process
Finding clients is a strong sales strategy and the key to increasing the number of customers and the final profit of selling your products or services.
In other words, the customer acquisition process is a critical element for the success of any business.
Maybe this process is not very pleasant and simple for sales professionals and marketers, but it should be done anyway.
So don’t think of avoiding it and do your best to find potential customers, engage, and attract them.
Of course, not all efforts in this regard are easy.
But having the right and accurate prospecting process is the best solution to finding valuable and permanent customers that can help your business grow.
Here are the steps involved in the customer acquisition process to discover new sales opportunities:
1. Researching and identifying your target customers:
The first step in the customer acquisition process is to identify your target audience – potential customers or qualified leads – and research them as well.
So, before starting any prospecting, marketing, or sales activity, it’s worthwhile to know
- who your ideal customer is,
- where your target customer is found or
- what they want.
On top of that, this step includes researching and analyzing the information below that can help you fully understand your potential customers:
- Demographic information (such as age, gender, revenue, geographic location, and education level)
- Relevant psychological data (such as values, beliefs, interests, purchasing habits, pain points, and behaviors)
This helps you tailor your marketing messages and strategies to effectively reach and engage with them by developing accurate customer personas based on this data. So that it’s attractive to your target audience and increases your chances of success.
At this stage of customer acquisition, the LinkedIn social network with more than 900 million professional users worldwide can be the best place to find your target audience.
In addition, with LinkedIn analytics or Google analytics tools, you can get a detailed insight into the information of your ideal customers.
2. Identifying your goals:
Once you’ve recognized your target audience, the next step is to define specific and measurable goals for your prospecting efforts.
At this stage, you need to determine what you hope to achieve through your marketing campaigns.
You must be sure that your goals should not only be clear and defined but should also be aligned with the overall goals of your business, such as increasing market share or expanding new markets.
Your common goals may include:
- increasing website traffic,
- highest click-through rates on social media like LinkedIn,
- increasing sales revenue,
- generating leads,
- converting prospects into paying customers, etc.
For example, if your aim of starting a business is $30 million in annual revenue, your prospecting efforts should align with that goal.
3. Choosing your appropriate customer acquisition channels:
Now, after identifying your target audience and goals, it’s time to choose the right customer acquisition channels.
In other words, given your target audience and goals, you can now opt for the most effective channels to reach and engage with prospective customers.
As mentioned before, these may include:
- social media platforms,
- email marketing,
- content marketing,
- search engine optimization (SEO),
- paid advertising,
- events or other methods.
It’s important to consider various factors such as cost, reach, engagement rate, and conversion rate when evaluating these channels.
For example, social media platforms such as Facebook and Instagram may be effective for targeting a younger audience, while email marketing may be more appropriate for a B2B audience.
Or LinkedIn ads are the most suitable channel to attract experts and professionals from different industries.
4. Creating an effective strategy for every channel:
Once you’ve chosen the right channels for your goals and audience, it’s important to create a strategy that works well for each of them.
This means that these strategies are in line with your business goals, the needs of your ideal customers, your overall brand messages, and your scheduling & budget.
For example, if you use LinkedIn to attract your target audience, you need to create quality content and eye-catching multiple images for your LinkedIn posts.
So that it resonates with your ideal prospects and at the same time is relevant to your industry and business goals.
5. Making communication and engaging with customers:
With your strategies in mind, it’s time to put them into action and connect with potential customers.
Interaction and communication with the target audience are the fifth key step in the customer acquisition process.
This may take many forms, including:
- engaging with people on social media,
- responding to comments and feedback,
- providing valuable content and resources relevant to their interests & needs,
- and hosting events,
- or other activities developed to contact and engage the target audience.
By interacting and connecting with your target audience in these ways, you can:
- build trust and credibility,
- establish yourself as an authority in your industry,
- and ultimately boost the likelihood that they’ll become regular customers.
To do this step well, firstly, make sure to use language & messaging that speaks directly to your prospects and provides value via informative and useful content.
Secondly, focus on building and strengthening relationships with your prospects, not just on increasing their numbers.
6. Tracing potential customers and evaluating your customer acquisition process
Of course, it’s not enough to just identify, connect, and engage with your target audience—you also need to follow them.
This means keeping connected through using email or LinkedIn newsletters or retargeting ads, and other marketing materials designed to maintain your brand and encourage customers to buy.
Always remember that by effectively following up with your prospects, you can increase the chances of them becoming loyal customers.
Finally, it’s important to evaluate the entire customer acquisition process to see how effective it was. This includes:
- tracking metrics such as website traffic, conversion rates, and customer lifetime value (CLTV)
- using this data to make informed decisions about future marketing strategies and tactics.
Overall, by constantly evaluating and refining your customer acquisition process, you can ensure that you maximize the probability of your success and generate the best possible returns.
Customer Acquisition Cost
After you know about customer acquisition, its process, and its techniques, you definitely want to know what the customer acquisition cost is and how you can calculate it.
In this final part of the article, we’ll explain to you what is meant by customer acquisition cost and how to calculate it.
What is the cost of customer acquisition?
Customer Acquisition Cost, or CAC for short, is an essential metric for any business looking to grow and expand its customer base.
Simply put, CAC refers to the total cost a company spends on research, marketing, sales, and product costs to acquire a new customer.
Why is CAC so important?
This metric helps you not only determine the importance of a customer but also helps you calculate the ROI of a customer acquisition strategy.
In addition, to know which marketing strategies and tactics will help you achieve your business goals and attract more new customers, CAC calculation is very important.
It’s important to know that the more you continuously measure your CAC, the more you optimize your business’s marketing and sales strategies.
According to the CAC definition, the higher your CAC value, the more difficult it is for you to achieve profitability or increase your business revenue.
That means you have to spend more money to find your new customers.
On the other hand, if your CAC is low, it means that you’ve had a good return on your investment in marketing and sales, and you can continue this process for further progress.
How to calculate CAC?
Calculating CAC involves adding up all the costs associated with acquiring a new customer, such as advertising costs, sales team salaries, and other marketing expenses.
Then, you divide this total by the number of customers you acquired in that time frame.
The formula for calculating CAC
(sales cost + marketing cost + advertising cost + sales team salary cost + other costs) ÷ (The number of new customers acquired in a certain period of time) = CAC
For example, let’s say you spent $15,000 on marketing and sales activities in March and acquired 100 new customers.
Your CAC in March will be $150 ($15,000 divided by 100).
All in all, that being said, by keeping a close eye on your CAC, you can ensure that you’re making a smart investment in customer acquisition and setting your business up for sustainable growth.
Conclusion
The hardest part of starting and growing a business is attracting customers, which is a vital aspect of the success of any business.
This includes identifying and targeting potential customers, connecting with them, engaging them with marketing efforts, and ultimately converting them into regular and loyal customers.
By using effective customer acquisition channels and strategies, you can increase your customer base, improve your business revenue, and gain a competitive edge in the market.
However, customer acquisition is not a one-time endeavor. Rather, it requires attention and compliance with a series of important points in the field of improving your customer acquisition strategy, as well as continuous CAC measurement.
Keep in mind that businesses need to constantly monitor their customer acquisition metrics & costs, adjust their strategies as needed, and test new tactics to stay ahead of the competition.
FAQs
What Is a Customer Acquisition Strategy?
Customer acquisition strategy includes the process of identifying, attracting, and gaining the trust of potential customers, convincing them to buy, and turning them into permanent customers.
What Is the Role of Customer Acquisition?
The ultimate goal and role of customer acquisition is to attract new customers and convert them into paying customers, which can help increase revenue, expand market share, and create brand awareness.
What Are the Three Parts of Customer Acquisition?
The three parts of customer acquisition are lead generation, conversion, and retention.