Comprehensive Guide to New Customer Acquisition Strategies

Introduction to Customer Acquisition

All of marketing and advertising comes down to one important factor: new customer acquisition.  Market research, focus groups, advertising campaigns, and public relations… are all efforts to get more customers.  To many of you, new customer acquisition strategies are a natural part of your business plan; to other business owners, it is complex and difficult to understand. This information is meant to help demystify the world of customer acquisition.

Defining Customer Acquisition

Customer acquisition is simply the effort required to get a new customer.  Even if acquired by referral for ‘free’, the effort was delighting whomever referred them. But in most cases, customer acquisition refers to paying for new customers.  If you are doing any marketing or advertising, you are engaging in customer acquisition.

The Evolution of Customer Acquisition

For hundreds or thousands of years prior to the industrial revolution, the concept of customer acquisition didn’t exist for most business owners.  For example, you open a butcher shop and can expect to get customers based on your shop being a closer walk than the next butcher.  This requires zero customer acquisition strategy, other than perhaps picking the right location.  But this proximity method starts to fail as other butchers move into the neighborhood.  Many businesses, both physical and online, operate like this today.  While some may find success, most will not grow significantly without investing money towards customer acquisition.

Customer Acquisition vs. Customer Retention

While customer acquisition means getting new customers, customer retention means keeping the hard-earned customers you already have.  It’s cheaper from a customer acquisition perspective to get one customer to order 10 times, than it is to get 10 new customers who order only once.

Why Customer Acquisition Matters

If you’re not getting new customers, you’re probably not growing your business.  Not everyone wants to grow; maybe you’re meeting your income requirements being a simple one-man show and don’t want to complicate your life with growing pains.  But if business growth is what you are after, customer acquisition needs to be part of your world.

Impact on Business Growth

Customer acquisition is business growth.  You might be able to ‘grow’ your business by hiring more employees, upgrading infrastructure or opening new locations.  But you’re not really growing the business without getting new customers in the door.

Long-term Benefits of a Loyal Customer Base

A loyal customer base is valuable not only in terms of customer retention and repeat orders, but also means referrals.  Let’s say you spent a dollar to acquire a new customer, and they reorder 10 times.  This means you got 10 orders from that original customer acquisition dollar.  Now let’s say they refer a friend who also orders several times; it’s still from that original single dollar you spent.  Or what happens when the person who was referred also refers several friends… this is exponential growth from a single customer acquisition dollar.  A loyal customer base will continue to refer their friends as long as you keep them happy.

Analyzing the Customer Acquisition Funnel

Customer acquisition is psychology.  There are phases customers go through before making a purchase.  Effective customer acquisition strategy means meeting a potential customer in the phase they are at, and guiding them through to the point of purchase.  It’s called a funnel because each subsequent stage has fewer potential customers than the previous stage, and looks like a funnel when visualized in a chart.

Stages of the Customer Acquisition Funnel

Most customers go through the same stages before making a purchase, even impulse purchases in the grocery store checkout line.  But the larger the purchase, more options, more research required, the longer and more difficult each stage can be.

Awareness

This one is simple.  Do people know your products or services even exist?  If they don’t, they won’t (can’t) buy from you.  This stage is often called the ‘top of the funnel’ where you are simply getting in front of the eyes of potential customers.

Consideration

Think of this as being ‘shortlisted’.  Among the options they are aware of (see above), potential customers will make a shorter list of businesses they will consider moving forward with.  Everyone else is eliminated as an option.

Conversion

The purchase is made.  After knowing you exist and taking you into consideration, they have selected you and/or your products and services.  Technically, this doesn’t have to be a purchase or exchange of money, it can be whatever action you need someone to take to meet your business goals.

Loyalty

This is the most neglected stage.  You can bypass all the stages above by creating loyal customers who simply order from you a second time.  Or equally as valuable; they refer friends who also bypass these stages and go directly to Conversion.  See customer retention earlier in this article.  Many business owners get so focused on getting new customers that they forget there’s just as much potential in the ones they already have.

Optimizing Each Stage for Maximum Efficiency

Neglect the first 2 stages and you won’t get a sale.  Neglect the last stage and you are leaving opportunity behind.  Maximize all stages and you’ll get the most out of every marketing/advertising dollar you spend.

Tailored Content Strategies for Each Stage

Remember, a customer is in a different psychological state during each stage.  Meet them where they are at.  If you are running customer acquisition strategies for the Awareness stage and already asking for a purchase, you’re targeting the wrong stage.  Many experts compare these stages to dating; you don’t ask for marriage on the first date.

Measuring Success Through Analytics

You need the ability to measure at every step.  You need to know things like what percent of people in the Awareness stage will go on to make a purchase.  You also need to know the cost to acquire a new customer.  Knowing the cost allows you to forecast the customer acquisition budget is required to meet your sales goals.

Cutting-Edge Customer Acquisition Strategies

Technically, handing out coupons or having a sale are customer acquisition strategies, but doing the same thing as your competition might not yield the results you want.  Cutting-edge customer acquisition strategies might sound out of reach if you aren’t a marketing professional, but help is available that might cost less than you think.

Digital Marketing Innovations

Digital marketing is constantly evolving.

Leveraging AI and Machine Learning

Ai is continually improving and already writes text as well as you do.  Most digital marketing strategies involve writing text; give Ai a try and see how well it does.

Advanced SEO Techniques

SEO has among the best return on investment of any digital marketing strategy.  The reason is that SEO gains stick around, usually long after the effort to get those gains have ended.  For example, you might write a blog post for your website targeting a specific keyword.  That keywords might find its way to Google’s page one and drive organic search traffic to your site for the next several years.  You only had to write the post once.  This is different than paid advertising where traffic stops the moment you stop paying.

The Power of Personalized Email Marketing

As your customer acquisition strategies progress, you will naturally accumulate email addresses.  Prospects, customers, tire kickers, newsletter getters, contact form fillers… These people expressed an interest in you and there’s sales to be squeezed from them.  Don’t send the same email to everyone; send customized emails based on what you know about them.  Don’t send a running shoe promotion to someone who came to your site looking for dance shoes.  It’s normal to need to hire someone to help get this set up for you.

Enhancing User Experience to Drive Acquisition

User Experience basically means do people like your website and find it easy to use.  Been meaning to redesign your website for the last few years but haven’t gotten around to it?  It might be costing you a lot of sales.  Or maybe your site looks pretty but people find it difficult to navigate to what they need, you might be losing sales.  Redesigning your website is probably less expensive than you think, and there’s professionals who know exactly what needs to be done.

Mobile Optimization

Keep in mind many of your potential customers might be looking at your website on a mobile device.  If they can’t quickly and easily navigate your site, they aren’t going to buy from you.  Even if your customers primarily use desktop machines to make a purchase, many will discover you during the Awareness stage on a mobile device.

Simplifying User Interfaces

Make it simple for your site visitors to find what they are looking for.  Too many options leads to confusion, and confusion leads to a drop in conversions (sales).  Your homepage and navigation should summarize your offerings without being overwhelming. Some experts say a visitor shouldn’t have to click more than 3 times to get where they want to go.

Social Media and Influencer Engagement

Social media and influencers have varying degrees of effectiveness on sales depending on what you are selling.  It tends to work well for things like fashion and culture, but not so much if you’re selling plumbing parts.  Social media and influencers can be absolute gamerchangers for the right types of products/services.

Crafting Viral Campaigns

Inventing viral campaigns is equal parts luck and science.  But for nearly all industries, a bit of research will reveal what’s worked in the past and might work again.

Collaborations and Partnerships with Influencers

Partnerships with collaborators and influencers always come down to money.  An influencer with the type of reach and audience you need likely knows their value and how much to charge.  This is a very difficult environment for an amateur to navigate. If you don’t have experience negotiating these types of contracts, it’s probably best you go through an agency.  It’s not cheap, but when done right can yield amazing results.

Integrating Offline Strategies with Online Efforts

Although the pendulum has swung almost entirely towards digital marketing, don’t forget that traditional marketing still works. People still read their mail and clip coupons from the local paper.

Revitalizing Traditional Marketing

You can get prospective customers into the Awareness stage from almost anywhere, not just online.  But at the same time, this isn’t a good fit for every industry.  For example, door hangers and local mailers might work well for a fitness gym, but probably a waste of money for a software development company.

Direct Mail with a Digital Twist

Tie your direct mail campaign with your website. Mail them a discount code redeemable on your website.  For the ultimate level of tracking, send everyone a unique discount code to know the exact name and address of people who respond.

Integrating Offline Events with Online Campaigns

As with direct mail above, any customers you make contact with non-digitally, should also be guided to your online presence.  You want a way for them to interact with your brand, even after the event is over.  This way they can buy tickets to the next event, merchandise, or other.

Community Building and Local Engagement

Don’t focus so much on the digital realm that you forget that people still do things in person!  It can be a very powerful experience for a customer to see you in person after only knowing your brand online.

Hosting Community Events

Host an event at the local library where you teach people more about your industry and how it can help them.  Don’t be overly promotional; give them valuable information and let them come to you.

Local SEO and Localized Advertising

Local SEO means organic search efforts targeted to a small local area, like a certain zip code or community.  Keep in mind you don’t need the best SEO in the world, you only need better SEO than your competition in this area.  You can also target paid advertising to local areas so you aren’t paying for ads outside your sales territory.

The Role of Technology in Customer Acquisition

To do this right, you’re going to need tools.  You can’t properly track customer acquisition in a spreadsheet or by simply measuring if you got more sales this month than last.  You need to know exactly what elements of your customer acquisition strategy are working and which are not.  Maybe sales increased 10% since you started your acquisition strategy, but the right tools might increase this to 50%.

Tools and Platforms that Enhance Acquisition Efforts

Most customer acquisition tools help with 3 things: strategy, execution and reporting.  They will provide insights and guidance on how to put together a customer acquisition strategy.  They will do much of the work for you through automation.  And they will provide the level of reporting to know how well it is all working.

Customer Relationship Management (CRM) Systems

A CRM is basically a database of all your prospects, customers and anyone else who has expressed interest in your products or services that you have contact information on.

Analytics and Data Visualization Tools

Think of this as charts and graphs.  Different people consume information better in different ways.  Your customer acquisition tools should have various ways of looking at the same data.

Emerging Technologies

Even if your industry doesn’t lend itself well to emerging technologies, for example you paint houses, there are always clever ways to get involved.  For example, explain how certain colors trigger different behaviors and how they can be used in augmented reality to increase sales or engagement.  As a painter, you probably know all about this.

Blockchain for Transparency in Marketing

Love it or hate it, blockchain and other cutting-edge technologies get people’s attention.  Same as above, it might not be easy to align your brand with hi-tech if you, for example, sell vegan pastries at the farmers market, but just know there is always a way if you are clever.

Augmented Reality Experiences

Augmented reality, in simple terms, is looking at the world through a device that adds digital elements to the screen.  For example, if you hold up your mobile phone’s video camera, you will see an accurate view of the world around you.  It’s basically just a digital version of what your eyes would see.  But imagine doing this on a busy downtown street where digital elements are added, such as pop-ups showing things like coupons, sales, advertisements… Or it could be part of a self-guided tour of a museum where a digital tour guide appears on the screen.  Maybe you could be the first booth at the farmers market with an augmented reality experience, that might help your vegan black bean brownies move faster!

Ethical Considerations and Customer Trust

Doing customer acquisition correctly usually results in having a lot of data about your customers, sometimes personal and sensitive information.

Building Trust Through Transparency

One of the fastest ways to lose a repeat customer is by losing their trust.  Most customers don’t pay much attention to this or bother to read your privacy statement.  But this blind trust can be shattered if they discover you’ve been abusing their information.

Ethical Advertising Practices

If you are being unethical, you might be breaking the law as well.  But aside from what the law says, you’re not going to build trust using shady methods to get customers.

Privacy and Data Protection

Same as above, if you are being unethical with privacy and data protection, you might be breaking the law.  Although customers might not be able to see what you are doing behind the scenes with their personal information, you should treat them the way you would want your own data handled.

The Role of Corporate Social Responsibility (CSR)

You can download a Corporate Social Responsibility template off the internet for free just to say you have a CSR policy, or you can create something with meaning and shape company culture around it.  People love companies who care about more than just extracting money from their customers.  CSR policies show how your company strives to balance economic, environmental and social imperatives.

CSR Strategies that Enhance Brand Image

The benefit to having a robust, actionable CSR policy is it reflects well on your brand.  Perhaps none of your competitors are doing anything related to Corporate Social Responsibility and now you have something that differentiates you.  Put your CSR on your website, let your customers know through email… get the word out that you care.

Case Studies of Successful CSR in Acquisition

A quick Google search will show you case study after case study of how different CSR strategies lead directly to new customers.

Future Trends in Customer Acquisition

While the basic principles of customer acquisition don’t change much over time, there are always opportunities to get ahead of your competition by looking into the future.

Predictions for the Next Decade

Governments around the world will continue to push their agendas.  You can often see a trend coming just by paying attention to which industries governments are promoting, usually through tax breaks or subsidies.  For example, there was a period in time when the United States government would provide a giant tax rebate to anyone who put solar on their home.  This triggered a massive rush towards solar and created the industry and new customers coming into existence not only for solar installations, but solar panel cleaning, repairs, maintenance, electrical improvements…

The Growing Importance of Sustainability in Marketing

Sustainability and social responsibility are here to stay.  Up until now, these concepts existed mostly in large, publicly traded companies, but they will start appearing in smaller companies soon as well.  Customers will increasingly look at sustainability and social responsibility when making purchase decisions.

Technological Advances and Their Impact

If you find the tools and technology used in customer acquisition complex today, unfortunately they are likely to get even more complex in the future.  As customers find new devices to use and new behaviors, new layers of functionality need to be added to customer acquisition tools to keep up with them.  But keep in mind that getting professional help to manage customer acquisition strategies tends to get less expensive over time.  It might be best to accept that you will need help and factor this into your budget.

Preparing for Future Challenges

Preparing for the future of customer acquisition doesn’t need to be difficult.  In fact, some industries might not see much change at all.  For example, someone whose basement is actively flooding due to a broken pipe doesn’t need to go through some high-tech customer acquisition strategy, they might move through Awareness, Consideration and Conversion in a matter of seconds.  Show up quickly and fix the problem, and now they’re a loyal customer as well. But for many businesses, it does require a complex customer acquisition strategy to get new orders, especially if that’s what your competition is doing.  Again, get help.  You might be pleasantly surprised how cheap you can find expert help and let you focus more on your core business and less on marketing.

Adapting to Changing Consumer Behaviors

I remember as a child, if we needed an emergency plumber, my parents would pick up the Yellow Pages and make calls until someone answered.  Today they pick up their mobile phone and click to call whomever Google puts at the top of search.  While this transition took many years, other changes to consumer behaviors only take months or weeks.  While the underlying service of plumbing hasn’t changed; the way customers find providers has.

Innovations in Customer Engagement

The best way to keep customers engaged is to keep communicating with them.  This isn’t always easy, however.  Again using a local plumber as an example; even the most loyal customer might only need your services once every few years.  They have no desire to hear from you in between.  Depending on your industry, you might have to find clever ways for customers to see your engagement as interesting and not an annoyance.  Generally, you have to provide something to them – this can be valuable information, such as an email explaining how to prepare your basement pipes for winter, or something free like a safety inspection.  Yes, you might lose money doing a free inspection, but it will keep that customer engaged.  You are less likely to lose an engaged customer to a competitor.

Conclusion