What is customer acquisition, and why is it important?
Customer acquisition is the process of gaining new customers through initiatives such as marketing campaigns, search engine optimization (SEO), and referral programs. It’s important because getting customers on board with your product or service can be a challenge. According to Gartner, it takes new clients over 12 hours (on average) to understand a product or service’s value.
What is the customer acquisition funnel?
The customer acquisition funnel is the framework that breaks down the customer acquisition process into six stages: awareness, interest, consideration, intent, evaluation, and purchase.
What does each stage of the customer acquisition funnel look like?
The first two stages of the customer acquisition funnel—awareness and interest—generate leads (individuals who are interested in what you’re selling). Awareness refers to the moment an individual becomes aware of your brand (aka brand awareness), while interest is what keeps them browsing your site.
The next three stages–consideration, intent, and evaluation–generate prospects, individuals who have indicated that they’re likely to make a purchase. The consideration stage is where a prospective customer weighs whether they want to buy from you versus another seller. They might read reviews from existing clients, compare price points, or sign up for a trial.
The intent stage usually includes adding items to their shopping cart, and evaluation involves weighing the pros and cons of actually clicking that buy button to complete the sale.
The final stage of the customer acquisition funnel is purchase. By this stage, you have a customer–congratulations! Don’t stop there, though. Next you’ll want to start thinking about customer retention, or what you can do to ensure that customer’s loyalty to your brand.
What is customer retention, and why is it important?
Customer retention is the practice of keeping existing customers. You can retain customers by leveling up your customer service strategy or implementing a customer loyalty program, to name some examples. Customer retention is important because it costs more to acquire new customers than it does to keep the ones you have.
What are customer acquisition channels?
Customer acquisition channels are where customers enter the awareness stage of the customer acquisition funnel. They are the first places customers become aware of your brand and can include social media, organic search, or paid advertisements (such as Facebook or Google ads).
What does an effective customer acquisition strategy look like?
Effective customer acquisition strategies catch the attention of prospective customers, boost engagement, and aim for a low customer acquisition cost. They are also sustainable, meaning you can use them to gain customers as your business continues to grow.
What are some examples of customer acquisition strategies?
Content marketing is a type of inbound marketing that involves the creation of content such as a blog post, video, e-book, or infographic. The main goal of content marketing is to provide valuable information to consumers so they are more likely to engage with you as a brand and, ultimately, become a customer.
Email marketing refers to the use of email to deliver marketing messages across the customer journey. It’s a great low-cost or even free acquisition method, and the only information you need from a customer is their email address.
Social media marketing refers to the use of social media platforms to connect with audiences to build your brand, increase sales, and drive website traffic. It involves listening to and engaging with followers, analyzing data, and running social media advertisements.
Referral marketing involves getting current clients to spread the word about your business with the end goal of acquiring their friends and family as customers.
Because customer acquisition is vital to the growth of your business (and also because it costs money), you’ll want to be thoughtful and strategic with any new customer acquisition strategy you implement. It’s also important to remember that there is no one-size-fits-all strategy. You should pursue whichever customer acquisition tactics make the most sense for your business.
What is CRM software?
Customer relationship management (CRM) software helps sales and marketing professionals manage routine administrative tasks, identify trends, convert leads, and increase sales. CRM platforms allow businesses to organize customer data, predict future sales using a sales pipeline and potential leads, and scale up the entire sales process.
What does customer acquisition in CRM look like?
Customer acquisition in CRM can look like measuring and tracking the following customer metrics:
Customer acquisition cost (CAC) is the average sales and marketing expenses necessary to achieve a first sale with customers. The customer acquisition cost formula itself is a simple equation: Divide the amount spent on customer acquisition marketing and sales by the number of new clients gained.
You can calculate customer acquisition cost here using our downloadable calculator tool.
Customer lifetime value. Abbreviated as CLV or LTV, customer lifetime value is the average revenue brought in by a customer relationship over a lifetime. To calculate CLV, multiply customer value (average purchase value times average purchase frequency) by your company’s average customer lifespan.
Conversion rate is a calculation that divides your total number of conversions by the number of interactions that can be tracked to that conversion. A conversion is when a prospect or customer completes a desired action, whether that’s submitting an email form, adding an item to their cart, or completing a purchase.
These metrics can help you learn when your customer acquisition and retention strategies are working, and when it might be time to try something new. CRM software can also help lower your customer acquisition cost by reducing the time and money spent on marketing tasks.
What customer acquisition tasks can CRM software automate?
CRM software saves time and money by automating tasks for your small business. Here are a few examples of tasks these tools facilitate:
Communicating with prospects and customers. CRM software uses chatbots to gather and forward information, answer frequently asked questions (FAQs), or schedule appointments, if linked to a calendar.
Building a customer follow-up system. A customer follow-up system allows your team to send follow-up communication to prospects and customers using phone calls, email, text, or physical mail with the hope of either acquiring or retaining their business.
Gathering customer analytics data through machine learning. Machine learning is an umbrella term for advanced algorithms guided by existing information. Machine learning customer acquisition refers to the gathering of customer analytics data (such as communications preferences and purchasing trends) and using it to gain customers.
Once customers are acquired, CRM software keeps their information organized so that your team can more easily and effectively maintain healthy relationships.
What is digital customer acquisition?
Digital customer acquisition refers to the process of acquiring customers online. It can involve prospective customers finding your product through a search engine, social media, or through online forums or ads.
How is digital customer acquisition different from non-digital customer acquisition?
Digital customer acquisition is different from non-digital customer acquisition in that it requires a small-business owner such as yourself to define your target audience as specifically as possible. Customers shopping online have endless options, so it’s important to ensure they can find your product or service.
Digital customer acquisition also involves connecting with prospective customers in the early stages of their customer journey. If you can create content that helps a customer decide what specific product or service they need before they begin shopping for it, you can capture more customers and online sales.
How can I make sure my target audience finds my product or service?
There are two ways to make sure your target audience finds your product or service: search engine optimization and paid search marketing.
Search engine optimization (SEO) refers to the use of techniques to drive traffic to your website. SEO ensures that your content contains the right information, such as keywords, so that it winds up on a potential customer’s search engine results page (or SERP) when they go looking for products or services similar to yours.
Paid search marketing is when you pay for your content to show up in SERPs. It saves you the work of optimizing your content yourself.
While purchasing ads will get you traffic, search engine optimization is a more effective online customer acquisition strategy. It results in almost 12 times more clicks than paid traffic as well as higher conversion rates.
How is digital marketing used for customer acquisition?
Digital marketing refers to the use of paid, owned, and earned media through channels such as social media, email marketing, pay-per-click advertising, and content marketing to connect with your target audience and turn them into customers.
1. How Digital Ecosystems Drive Growth and Expansion for Tech CEOs, Gartner