Customer Acquisition Strategy for Startups
As a brand, you face a number of significant challenges. One of the most pressing, of course, is the need to get your business up and running. You need a product or service defined and ready to go. You also need a customer base. There’s no such thing as “build it and they will come” in the world of business. In fact, for most brands, customer acquisition is a make or break consideration. What exactly is customer acquisition and what should you know about it?.
What Is Customer Acquisition?
Customer acquisition is really nothing more than how you get, keep and grow your audience. It’s about forging customer relationships. That’s it. However, achieving those goals is more difficult than you might think.
Where does your marketing team and sales process hand off to each other?
There are two channels that you’ll need to understand – the physical channel and the web/mobile channel.
Physical Channel: The physical channel involves the real world. For instance, let’s say you run a brick-and-mortar shop. A customer calls on the phone, and mentions they saw your ad on Facebook. You talk to them and encourage them to come in. They do that, and you determine how you can solve their problem. They buy your product or service, and then come back for future needs.
This is an example of how you use earned and paid media – newspaper spots count, as do radio ads and more. It’s about building awareness. That’s your first step. Next, you need to build interest. You can track this by the number of phone calls or visits that your business receives.
Next comes consideration – again, this is a measure of those who actually reach out based on your marketing efforts. Finally, we arrive at the purchase stage. This is when they step into the store, pick up a piece of merchandise, and take it to the register.
Web Channel: The web channel is very different from the physical channel. With this, your first step is to use media (content, PPC, SEO, etc.) to acquire customers. Customer acquisition is little more than driving traffic from one place to your website, storefront or mobile app.
What is a customer acquisition cost?
A customer acquisition cost (CAC) is the total cost spent on sales and marketing, advertising, and other costs to acquire a new customer. The goal of customer acquisition is to convert a “brand-loyal” customer into a paid/paid up member by first building familiarity and incrementally into a new buyer.
Many companies find getting new customers for business more difficult, not taking into account the times when referrals, SEO, social media marketing and advertising are used. You now have a few different ways of getting more customers, including references, SEO, social media marketing and paid ads.
Why do companies need an Acquisition Strategy?
In the world of business, customer acquisition is a vital part of any company’s long-term strategy. And even those companies without an explicit acquisition strategy often have one guiding vision: gaining as many customers as possible.
The first step of this process is understanding the lifetime value of a customer, which will help to determine how much it costs to acquire one new customer and what that means for revenue and profitability.
Lifetime value is the total of all the money a customer is expected to spend with a company during his or her lifetime. This means that it includes purchases from previous periods as well as future ones. As an example, consider a company that sells $1000 worth of goods and services per year to retail customers. Suppose that they also sell merchandise to their direct-to-customers customers for $1000 each. Their direct-to-customers sales would be considered a percentage of lifetime value because they represent 15% of the sales to the entire customer base.
Content And Commerce
“Blended” business models are the future for retail as companies are stronger when they have multiple sources of revenue. In the same respect, you can and should use any and all channels, so long as they’re relevant to your audience. Facebook, Twitter, Instagram, email marketing and other channels can all be powerful tools here. Research your audience first and make sure that they spend time in that channel, and that you’re using content that resonates with them.
However, acquisition is only the first step. The phase right after is “activation” – you need to activate your customers so that they take the action you want them to take. That might be paying for a product or service, or it could be signing up for an email list, or just about anything else… and this helps “indoctrinate” them into believing in you as a brand. Your customer channel strategy needs to have this activation step mapped out.
Customer Acquisition for BRANDS – Planning
Customer growth for brands starts with planning. You need to know who you’re trying to reach, and how you’re going to reach them. Will you use social media marketing? Invest in PPC ads? Put your money into video marketing? All of these are important tools and they should all have a place in your strategy. In your acquisition plan, you’ll need to focus on the three areas mentioned previously – get, keep and grow.
Get: This is how you actually get your customers and encourage them to buy your product. Often, this is a very challenging step, and it involves understanding your audience.
Keep: Keep refers to actually keeping your customers, getting them to make repeat purchases rather than having to start over from scratch with a new prospect. Churn is expensive, and it costs far less to keep your current customers than to attract new ones. Customer retention is your friend. Having your audience share customer experiences will help your brand to mature more quickly.
Grow: Grow refers to building an ongoing relationship with your customers. It’s not a once-and-done sort of thing. It’s a relationship that stretches out over time, with you fulfilling their needs in an ongoing way. This often falls in the category of upsell/cross-sell, since you focus on getting current customers to buy more expensive products—upsell them—or sell complimentary products or services, which is cross-selling.
Understanding the Customer Journey and Your Customers with Personas
Customer personas are idealized representations of different segments of your audience. Each persona should have a personality, unique motivators, specific character traits and more of one segment of your target audience. Use the personas you create to help map out the customer journey through your sales funnel.
When you build your personas, there’s a lot to include about your buyer. You need to understand the other archetypes in the equation. For instance, the flow runs from the user to the influencer, to the recommender, to the decision maker, to the economic buyer, to the saboteur. This is relevant to both B2B and B2C companies.
To use a very simple scenario, let’s talk about selling toys. Your users are children. However, since they don’t have jobs or disposable income, they can’t buy. That means the economic buyer is the parent. Influencers and recommenders in this equation are the child’s friends. The decision maker is the parent, again (the tougher one). The saboteur could be a parent who had a negative experience with the toy in question, or it could be a rival toy maker.
One of the best tools to help you drill down into the bedrock of your audience is to segregate them and then build personas around each segment. Each persona should have a name, “Saving Sally” or “DIY Dan” for instance, as well as characteristics that are embodied in the name, but then expanded in the persona outline.
For instance, while Saving Sally might be frugal, that frugality might be due to a factor like having several children, or saving for retirement. DIY Dan might prefer to do anything he can on his own, but it might be due to a desire to be self-sufficient, rather than a desire to save money.
You also need to dig into the demographics of your audience. Where do they live? What’s the average salary? Did they graduate from college? Do they hold more than one degree? How many children do they have? These are all important questions to answer in order to really build familiarity with your audience. Combine this information with psychographics – their preferred hobbies, personality traits and the like – to build an accurate image of each of your audience segments.
Finally, you need to understand your customers’ pain points. This is a crucial consideration for businesses in any and every industry. Without knowing their pain points, you lack a good understanding of their motivators, as well as the potential roadblocks that might prevent them from converting to a business customer. What do your customers find frustrating or urgent that your product or service addresses? These are their pain points.
All of this information should inform your personas, and you need a persona for each segment of your wider audience.
What does customer first mean?
Customer first means that the customer’s needs come first and the company’s needs come second. The idea of this is to take care of customers and provide them with a pleasant experience rather than concentrating on the company’s needs. The customer is always right and it is important to take care of them in a positive manner. One practical step to making it a reality is, don’t try to manage customers’ expectations. In some cases, lower your expectations and be realistic. Likewise, do not fake your product. If you are not able to do so, have a strong product or tools before the client.
The customer is usually referred to as the client. The client can be an individual, organization or a business as well as a governmental body. In most cases, the customer is the final buyer of your product or services. Your job as a salesperson is to have an understanding of what it means to be the customer and understand what impacts customer health so you can have a long lasting relationship with them.
Which strategies are best for B2B Marketing Strategy?
The definition of acquisition is the process of acquiring customers, either as a business or as an individual. Strategies for acquisition range from traditional marketing and direct marketing to word-of-mouth.
Although the most effective marketing strategy for acquisition differs with each company, this blogpost will help you understand and choose which strategy is right for your business.
What does word-of-mouth mean? “Word-of-mouth is a concept in mass communication that develops as consumers share their opinions with others.”. It can be defined as “the process through which individuals who haven’t been asked to share their experiences or opinions talk with each other, typically in person.”. Of course, one could define it differently; the concept of word-of-mouth has developed to mean “
With chat, you can potentially reach a larger audience in just one funnel. The key is to have the right content that resonates with your target audience. It’s not often that brands have the opportunity to build an audience through chat, however. The vast majority of businesses without any compelling content end up shying away from messenger apps altogether. The most important thing for a B2B marketing strategy is to have your products and services at the center of the plan. This will give you a competitive advantage in attracting new customers.
Lastly, you need to understand that B2B has been stealing B2C tactics for years now. There was
How to do Channel Management Strategy
Channel management strategy focuses on content your audience interacts with. You should also focus on the quality of that content and how it relates to them. This includes a consideration of the quality of your product or service as well as its value proposition.
For example, if you’re a software company, one way to measure content is by using web analytics. If you’re a video streaming service, you may want to look at click-through rates.
You should also consider how your content is distributed and the channels through which it reaches your audience. For example, if your product is sold directly through the company website, you may want to consider how it performs in search engine rankings.
You should also consider customer acquisition channels when searching for new segments of customers.
The most common methods include e-mail marketing, social media marketing, search engine marketing, content marketing and direct sales. Channel partners can add to this mix as well.
Acquisition strategies are effective on Google and Facebook. They focus on the specific customer acquisition channels that work best for your business type. Acquisition strategies help businesses:
- Map out strategic customer profiles and user journeys
- Create funnel model of customer acquisition
- Identify successful customer acquisition strategies
- Identify unsuccessful customer acquisition strategies
- Optimize third-party payments options for businesses
- Understand the costs of customer acquisition
- Research best practices on unique new customer acquisition channels
- Research new tools to drive high-quality customers
- Identify best practices for defining segmentation goals
- Determine when to utilize paid acquisition programs
Goals and KPIs
New customer acquisition cannot take place without setting specific goals, and then using KPIs (key point indicators) to chart your progress toward those goals. Customer acquisition for brands should begin by understanding where you want to go – what is your goal? What’s the next one after that, and the one after that? Your data will become valuable over time if you sort out your goals upfront.
You also need to know the cost of acquisitions – how much are you paying to move closer to your goal? CAC, or customer acquisition cost, is a vital element to understand, as it will determine what strategies you pursue, which you abandon, and more. Basically, CAC can be calculated by dividing the costs incurred to acquire customers by the number of new customers you acquired during a specified period. Use your KPIs to determine what’s working, what’s not, and what needs to be changed in order to reach your goals. This needs to be done by channel, and those include:
- SEO: Search engine optimization relies on organic search. When your potential customer searches for a specific keyword or phrase, your website should be shown in the results, as close to the top of the page as possible. Determining CAC in this instance would involve understanding the cost of content creation and implementation across all channels where that content is indexed for search.
- SEM: Search engine marketing is part of SEO, but generally applies to paid marketing methods, such as PPC ads. Determining your CAC here hinges how much you’re bidding per keyword, how many keywords you’re targeting and similar metrics.
- Social Media: Social media can be organic or paid. It represents a major opportunity to connect with and build your audience, as well as encourage them to take the next step down the funnel. CAC for social media can be difficult to determine – factors affecting it include paid ads, promoted posts (on Facebook), the amount of time spent posting and engaging with your audience personally, and more.
- Email Marketing: Email marketing is best used once you’ve acquired a customer, and need to activate them. It can combine special offers and lead magnets, video content and a great deal more. CAC for email marketing can involve everything from the costs you incurred getting them to sign up for your mailing list to the cost of video development for use as content, landing page creation for use with your email campaigns and others.
Tracking your CAC per channel is essential, as mentioned. You need to be able to track where your customers are at each stage of the journey, and then scale their experience up to push them toward activation. You also need to ensure that you’re keeping a very close eye on the costs incurred, in comparison to the results generated (customers acquired).
Brand Response and Content Marketing Are the New Customer Acquisition Tools
When it comes to modern customer success strategy for brands, content marketing (blog posts, video, email marketing, etc.) and brand response should be your go-to solutions. If you’re unfamiliar with brand response, it’s a circular marketing method that uses brand building to trigger a response from your audience, and that response further reinforces your brand—or further builds your brand. Ultimately, you need to strike a creative and business balance. Not only should your content and overall brand look great, but your efforts need to perform well, too.
With new customer acquisition for brands, it’s important to understood customer acquisition strategy and to lean into whichever strategy is providing the best results, while constantly monitoring and measuring progress.
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