Customer acquisition isn’t what it used to be. Back during the “golden age” of advertising (think Mad Men), the goal was to get your product in front of as many people as possible and hope that some of them buy it. Nowadays, there are much more advanced ways of targeting your ideal audience—but there are so many ways to do it that it can get a bit confusing.
Today’s top brands have clear roadmaps for how to consistently acquire customers with as little upfront cost as possible. They’re optimizing their strategies and dialing in on their ideal audiences and channels while clearly identifying the KPIs that matter most.
If that sounds like where you want your brand to be, keep reading! In this blog post, we’ll:
- Briefly cover the basics of modern customer acquisition
- Identify 5 crucial first steps to setting up your strategy
- Explain how to get the data you need to succeed
How Does Customer Acquisition Work?
When we say “customer acquisition,” we’re referring to the process of gaining new customers by effectively moving them through the marketing and sales funnel. It encompasses all interactions that influence a person’s decision to become a customer. The significance of customer acquisition lies in its direct correlation to sales generation. Acquiring more customers leads to increased sales, making it essential to invest in effective customer acquisition strategies while ensuring cost efficiency.
To gauge the effectiveness of your strategies, it’s crucial to track the customer acquisition cost (CAC). CAC represents the average expense incurred to acquire a single customer and complete a sale. Calculating the CAC for each strategy helps identify the most efficient approaches. Another important metric to consider is the lifetime value of a customer (LTV). LTV reflects the average revenue generated by a customer throughout their engagement with your business.
Successful customer acquisition strategies aim to attract new customers while maintaining a CAC that is significantly lower than the LTV.
5 Steps to Creating a Customer Acquisition Strategy
Customer acquisition can pose challenges for brands due to several factors. While the basic goal is to attract ideal customers, achieving this is not always a straightforward task.
Brands operate in an omnichannel decision environment where customers interact with them through various channels before making a purchase decision. To succeed, brands must establish a presence in the right channels, deliver appropriate messaging, and secure these touchpoints. Keep in mind there is no one-size-fits-all solution, and each brand needs to determine what works best for its unique offerings and target demographic.
With that said, here are five crucial steps every brand should take to build a successful customer acquisition strategy from the ground up:
1. Determine the scope of the strategy
Decide whether your focus is on acquiring customers for the overall brand or just for specific product lines. This decision will shape your overall approach and account for individual marketing efforts.
2. Identify your target CAC
A successful customer acquisition strategy has a customer acquisition cost (CAC) that is lower than the lifetime value of a customer (LTV), which means you’ll need to start by determining the LTV. The lower you can keep the CAC below the LTV, the more profitable each acquisition will be.
3. Identify your target audience
Identify the demographics and characteristics of the audience most likely to become customers, and use data-driven research to determine the key target segments. To some extent, your target audience may be determined by the brand’s legacy. This is especially true for established brands who have built up brand loyalty among certain demographics over the years.
4. Decide which channels to pursue
Evaluate the existing owned and rented marketing channels, considering their past performance and proficiency. Avoid haphazard approaches and rely on data to guide channel selection for reaching the target audience effectively.
5. Determine which KPIs to measure and track
Establish key performance indicators (KPIs) to objectively measure and track the strategy’s performance. These may include lead-generation rate, click-through rate, conversion rate, time-to-conversion rate, shopping-cart-abandonment rate, and churn rate.
By carefully considering the five elements listed above and leveraging data-driven insights, you can develop a customer acquisition strategy that maximizes effectiveness and provides measurable results.
For a more in-depth explanation of each of the steps above, including examples of how to apply your strategy to different marketing channels, check out our free ebook, The Ultimate Guide to Customer Acquisition.
Data makes all the difference
No matter how you structure your customer acquisition strategy, you’ll need data to monitor and optimize your campaigns.
PriceSpider’s Where to Buy Shoppable Solutions enable you to gather crucial insights into the customer journey, including not only where they’re coming from, but also which retailer they select, what they add to their carts (including competitors’ products), and whether they completed the sale.
It also eases the customer’s path to purchase, giving them direct access to your products wherever they prefer to shop—which can make a big difference when it comes to closing sales and acquiring new customers.
Want to learn more?