Customer acquisition

Customer acquisition is a process that entails various marketing methods to attract new customers. It helps convert leads, boost sales, and expand businesses.

In this video, a marketer at LIKE.TG unveils tools, techniques, and strategies to convert users into customers.

In this article, we’ll uncover the importance of customer acquisition, show you how to create a customer acquisition strategy, review B2B customer acquisition strategies, and review the best customer acquisition tactics and examples.

Why is customer acquisition important?

Companies constantly use popular marketing channels such as social media, paid advertising, email marketing, referral programs, and SEO to obtain new customers who will engage with their brand. They implement different marketing techniques to ensure the company’s growth, increase sales, and gain profit.

Brands aim to meet people’s needs, wants, and expectations to win their interest and encourage them to become customers. With the help of digital technologies, companies collect vast quantities of data about their prospects both online and offline and use different methods to drive their attention. As a result, businesses receive their love and trust and get more loyal customers.

Let’s get to know the benefits that customer acquisition can bring:

• increased sales;
• improved brand awareness;
• your company’s growth;
• new investors, influencers, and partners involved;
• empowerment to systematically convert new customers;
• an opportunity to expand your business.

If you aim to grow your business, customer acquisition and customer retention are equally important processes. Let’s review the difference between customer acquisition and retention.

Customer Acquisition vs Retention

Customer acquisition and retention have some similarities, including improved customer experience and a wide customer base. Yet, they are two different concepts that occur at different customer journey stages. Let’s find out this difference.

Customer acquisition is the process of attracting new clients to a business. Marketers use lead generation tools, marketing campaigns, and collaborations to identify prospects, attract them, and convert them into customers.

Customer retention is the process of preventing existing customers from leaving by re-engaging with them using personalization, customer loyalty, and email campaigns. The strategies aim at encouraging customers to perform repeat purchases.

In short, customer acquisition and customer retention differ in primary goals. While customer acquisition focuses on bringing new customers to a business and expanding its reach, retention focuses on keeping existing customers for higher customer lifetime value and more consistent revenue.

Now when the difference is clear, it’s time to unveil the stages of the customer acquisition funnel.

8 Stages of Customer Acquisition Funnel

Customer acquisition is a complex process requiring multiple steps to achieve the necessary result. We’ll uncover the steps and strategies you can use for each.

1. Awareness. At this stage, you should focus on establishing awareness of your product or service. You can create content for your site and social media, run ads, or collaborate with opinion leaders to build it.
2. Interest. This step involves gaining interest in your target audience by providing information and educating prospects about your product. You need to show how valuable your product is. By offering whitepapers, eBooks, webinars, and blog posts that provide detailed information about your product, you can encourage leads to look at your product as a potential solution to their problems.
3. Consideration. At the consideration stage, you should provide proof persuading prospects to purchase your products. Consider incorporating free trials, demos, and samples to let prospects test your product and find whether it suits them. Besides, add detailed product descriptions, publish comparison blog posts, and use retargeting campaigns to prove that your product is the best alternative.
4. Intent. Next, you need to use incentives to encourage prospects to purchase. Provide special offers, detailed FAQs, cart abandonment campaigns, and personalized follow-ups.
5. Evaluation. This stage is for you to provide excellent support to positively impact customer purchasing decisions. You should share customer testimonials and success stories, ensure real-time support, information on pricing, etc.
6. Purchase. During this stage, prospects convert into paying customers. You need to provide a seamless and fast checkout experience, allow several payment methods, and send confirmation and follow-up emails after the purchase.
7. Post-purchase. If you want to build customer loyalty, improve retention, and encourage repeat purchases, you should follow up with a post-purchase experience. Send onboarding emails, share tutorials, establish loyalty programs, and offer related products.
8. Advocacy. To make customers your advocates, you should encourage the creation of user-generated content, referral programs, and customer reviews. These techniques will help you establish a positive reputation for your brand.

Now that you know about the funnel, let’s discover customer acquisition cost and all the calculations and processes associated with it.

Customer Acquisition Cost

To determine the effectiveness of your customer acquisition strategies, you need to know all the peculiarities associated with customer acquisition costs. We’ll unveil them in this section. But, first, let’s start with importance.

Why is customer acquisition cost important?

Customer acquisition is one of the most important metrics because it helps measure the cost related to the strategy, tactics, and tools you use to attract new customers. It influences a company's revenue, business decisions, and financial performance of your brand. Yet there are even more reasons to calculate customer acquisition cost. We’ll uncover them below.

• Financial health. Calculating customer acquisition cost allows you to identify whether your company gains profit and how good it is. In case CAC is too high, it means that your business might have challenges with obtaining profitability.
• Allocation of resources. After measuring customer acquisition costs, you can make well-thought-out decisions on allocating your budget to the right marketing and sales efforts and strategies. This way, you invest money into the best ways to bring new customers.
• Pricing. Understanding customer acquisition costs enables you to identify the best pricing and profit margins for your products. Depending on the metrics, you can adjust the prices for products to ensure that they cover all costs associated with customer acquisition, helping you ensure that your business is profitable.
• Customer lifetime value (CLV). Customer acquisition cost is always associated with another metric called customer lifetime value. This is because it helps evaluate the viability of a business model. In this case, CLV should be higher than CAC, ensuring that customers bring more revenue in the long run than you’ve spent on bringing them.
• Competitive advantage. If your business has a low CAC, you can focus on improving other areas of your business to establish a competitive advantage. For instance, you can invest in product development, customer support, product recommendations, etc. These will help you stand out from the competition.
• Data-driven decisions. Whether your CAC is low or high, it allows you to make data-driven decisions on your budget allocation, pricing, sales initiatives, and business goals. Depending on the calculations, you can improve your strategy to reduce CAC, obtain more new clients, and higher profits.
• Investor appeal. When investors search for business opportunities, they pay attention to CAC and CLV. Low customer acquisition costs, when compared with customer lifetime value, are enticing offers to invest in.

Now that you know about the reasons to measure your CAC, you might be interested in the average customer acquisition cost for your industry. However, you can’t fully rely on the indicators below because every niche and business is unique and might vary drastically.

What is the average customer acquisition cost?

To evaluate your cost, you need to know the average customer acquisition cost for each industry. In this section, we’ll unveil them for various niches.

There are numerous factors that influence the average CAC. It depends on your industry, business model, target audience, and strategies associated with marketing and sales. That’s why you can’t find an average number for all.

If your company operates in construction, your organic CAC can amount to $190, while paid CAC can total $468. These costs arise because marketers need to integrate online advertising and digital marketing. These costs might be higher or lower depending on your product and the level of competition.

These costs are different when you are in IT. Product demonstrations, long sales cycles, and seamless customer support require business owners to allocate more resources. The average combination of organic and paid CAC can be $454.

B2B SaaS companies will have to spend quite a lot on customer acquisition. The organic customer acquisition cost will be around $205, while paid CAC might total $341. Higher CAC, in this case, is related to personalized sales approaches, more marketing efforts to establish strong customer relationships, and long sales cycles.

If you are engaged in higher education, your average organic and paid CAC combined could be $1,143. Whether you have an online school, online course, or physical educational institution, you’ll have to invest in targeted marketing to educate about your product and attract potential students.

Now that you know the average customer acquisition cost for various industries, it’s time to find out how you can measure it for your business.

How to calculate customer acquisition cost?

CAC is essential for your company since it allows you to assess your ROI. Successful businesses always try to reduce this cost as it shows how healthy your sales, marketing, and customer service strategies are. Besides, decreasing this value empowers your company to allocate resources efficiently and receive a higher profit.

A marketing strategy that performs well doesn’t require big expenditures on advertising that often generates low-quality leads. This is because a company that provides people with valuable and informative blog posts can bring organic prospects. Additionally, your current customers can also help you in customer acquisition. If your clients are satisfied with your product or service, they will recommend your brand to their friends and colleagues.

Below you can find a formula to calculate CAC. Firstly, define the time frames you’re evaluating. Secondly, add your total sales and marketing costs together. Thirdly, divide the resulting amount by the number of your acquired customers during the specified time.

After estimating your customer acquisition cost, if you find that it’s too high for your business, target market, and strategy, you’ll need to reduce it. The next section will show you how to do this effectively.

How to reduce customer acquisition cost?

Reducing CAC is a must for every business striving to improve profitability and sustainability. Below you’ll find some effective strategies for your company.

• Optimize communication channels. Consider using A/B testing to identify the most effective strategies, content, and marketing channel combinations. After finding out which channels work best for your business and bring the highest ROI, allocate more budget to them to improve profitability.
• Leverage analytics tools. With their help, you’ll be able to assess your marketing campaigns’ performance. When using analytics platforms, you can identify the most effective channels for your product and optimize these strategies for even better results.
• Simplify the checkout process. For a seamless and fast checkout process without abandoned shopping carts, you need to optimize it. Make sure that customers can check out items in the cart simply and securely. Consider creating detailed instructions, providing multiple payment options, ensuring security, and adding simple forms.
• Improve user experience with your site. Optimize your site and landing pages’ speed, clarity, and usability. They should also be mobile-friendly to allow smartphone users to access them. Your call-to-action buttons should be visible, clear and encouraging action.
• Incorporate loyalty programs. Consider creating loyalty programs for your existing customers to improve their lifetime value. Rewarding customers with special offers and discounts will help you establish trusting relationships and increase repeat purchases.
• Use automation. By setting up automated emails, you can keep in touch with your subscribers and lead them down the sales funnel. If you personalize your email campaigns based on subscribers’ behavior and preferences, you’ll be able to boost engagement and conversion rates. LIKE.TG will help you not only send personalized emails but also segment the audience based on their criteria, schedule email campaigns, and send them at perfect timing.
• Interact with your customers on social media. Show your activity by engaging with customers in comments and mentions. This way, you’ll show them you care about every customer, educate them on products, and unveil how your product can solve their problems.
• Create referral programs. This is one of the most cost-effective ways to attract new customers who are really interested in your products. Consider rewarding your existing customers with small gifts or points for bringing their friends. You’ll have a wider customer base and new purchases.

Now that you know how to reduce CAC, let’s proceed to the next step — developing a customer acquisition strategy.

How to Develop Your Customer Acquisition Strategy

Let’s dive into several strategy steps if you want to acquire new customers.

1. Define your ideal customer. If you want to reach your target audience, it’s crucial to collect the personal information of your target groups. Consider creating your buyer persona to keep this information in order. Ask yourself questions that will help you define your customers’ goals, problems, and interests.
2. Determine your goals. Once you have your ideal customer profile, you can set your objectives. This will help you develop a customer acquisition plan and implement various marketing methods to achieve your main goal. Besides, you can define your revenue expectations to see whether your business meets them.
3. Choose an appropriate acquisition channel. You can “meet” your new customers anywhere, either on social media channels or with the help of organic search. Remember that you can find the most effective channels by using buyer personas. The first thing you can do is find out where your personas spend their time and reach them through these platforms. Secondly, run an experiment by developing a hypothesis about the most popular communication channels that bring the highest ROI. Once you measure their performance, you can decide where to run your campaigns and how to allocate resources.
4. Create a specific strategy for each channel. Pay attention to the content your customers interact with, their favorite social media networks, and information your competitors post. Keep in mind that reaching your audience through each channel will cost you a lot.
5. Communicate with your audience. If you want to improve your customer acquisition process, you need to establish your communication with clients. Surveys, interviews, social media engagement, and blog posts are excellent forms of interaction with your customers. With their help, you can find the gaps in the tactics you use to win new customers. Keep in touch with your clients to identify what they expect from you.
6. Analyze and improve your strategy. Consider utilizing analytics to be aware of your company’s performance. Various factors can influence your customer acquisition process, and it’s essential to be aware of them. Analytics can help you learn where customers buy your products, where they live, how they got to know about your company, and even more.

With the right customer acquisition approach, you can engage high-value consumers who can be loyal to your brand and stimulate its growth. We’ve prepared the most effective techniques to help you in this process.

12 Customer Acquisition Tactics

In today’s world, many great marketing methods help win new clients. Let’s walk you through the most valuable techniques that will attract new customers.

Video marketing

According to Wyzowl, 86% of people would like to see more brand videos. Videos tend to bring many benefits to companies since they are visually appealing and encourage people to engage with your brand. Moreover, videos build trust, increase social shares, boost conversions and sales, influence buyer decisions, and even more.

For example, Wix provides their potential customers with design tutorials on creating a strip-based website.

Subscription forms

Brands often use subscription forms to generate leads and legally collect subscribers’ personal information, like names and email addresses. They can be located on their website or blog and enable users to fill in the form with their personal information. By doing this, they can receive the latest updates in newsletters. When subscribers agree to receive emails from your company, it means that they are interested in your products or services.

By registering with LIKE.TG, you have a great opportunity to create any type of subscription form for free. Besides, our service allows you to make multi-channel forms. They enable users to subscribe to your company’s newsletters by using an email or a messenger.

Below you can see a subscription form example designed with the LIKE.TG builder.

Co-branded products

This process involves cooperation between two companies that aim to create a product or piece of content and promote it through various marketing channels. It can be presented as an article, video, new product, app, and more. Co-branding helps companies reach new audiences, generate leads, and boost their brand recognition.

Let’s take the partnership between Airbnb and Flipboard. As you know, Airbnb is a room-sharing app. Flipboard is an app that gathers content from different social platforms and blogs. These two companies cooperated to create a product called Trips. It enables Airbnb users to connect with hosts with the same interests. This way, the two brands can reach new clients worldwide.

Giveaways and contests

Consider conducting giveaways to increase your social media presence and boost engagement metrics. By tailoring a great giveaway or contest, you can reach a wider audience and obtain new clients in the future. Use your leading social media platforms to conduct a giveaway and set the rules that include tags, comments, shares, and likes to make your brand more recognizable.

Let’s take a giveaway from Forever21, for example. The brand used Instagram for its contest. Users had to follow the rules mentioned in the post below to win the brand’s items.

Informative blog posts

Content marketing is one of the easiest ways to obtain new customers. Although it can be a challenge to come up with high-quality articles, this allows your leads to make more informed decisions. As a result, you’ll gain their trust and loyalty. Besides, valuable, engaging, interesting, and informative blog posts help drive conversions.

Let’s take LIKE.TG, for example. The service has a blog that contains articles on various relevant marketing topics. This allows customers to study a specific topic, learn more about this service, and make a deliberate decision.

Influencer marketing

This type of marketing is growing faster than digital ads. Influencers can help you quickly attract new buyers since a large percentage of people listen to their recommendations on social networks. Besides, people start to engage when they see their opinion leaders in commercials, on a brand’s website, etc. Once you choose the channel, decide on influencers who can generate leads. Here you can find a step-by-step guide on how to create your influencer marketing strategy.

For example, consider Puma’s partnership with Selena Gomez. The singer often promotes the brand’s products on her Instagram account. With this opinion leader’s multimillion audience, Puma can easily attract new clients.

SEO

This is one of the most critical techniques that helps in acquiring new customers. The strategy entails optimizing your website to rank better in search results. Since users tend to visit the top five websites on the search engine results page, optimizing your pages for users and search robots is essential.

SEO helps your company obtain organic traffic and acquire new customers. Use industry-related keywords and backlinks from authority websites and ensure that your web page is mobile-friendly. Read our article to learn about the main principles of a great SEO strategy and useful SEO tools.

Referral programs

Running a referral program is the basis of any customer acquisition strategy. Offer your current customers discounts or special rewards to encourage them to recommend your products to their family, friends, or colleagues.

Let’s take GREATS, for example. This brand designs sneakers and offers a special discount to customers who bring their friends.

Optimized landing pages

If you want to attract more customers, make sure you have a great landing page with an appealing and convenient design, concise copy, clear benefits of your products, images, and a CTA button.

Improving the elements of your landing page can increase conversion rates. Your website should also be mobile-friendly since many users search for information on their smartphones.

Several tips should be considered when creating a landing page: make it simple, add your contact information, be consistent, and keep important information above the fold. This will help you boost your conversion rates. Our blog has an article that will help you dive deep into landing page design, find best practices, and grab some inspiration from the examples.

Paid ads

Paid advertising can be a great fit for many businesses. These ads provide your company with instant visibility in search results and an opportunity to reach a wider audience and acquire new customers. With paid advertising, you can control who sees your ads on social media by setting targeting parameters.

Web push notifications

These instant messages open you an excellent opportunity to reach your largest audience — site visitors. You can set them up for onboarding to inform your leads about the value of registering with your website, tell them about your news, interesting events, new products, features, and releases, and share various offers.

LIKE.TG allows you to choose a contact list, personalize and design web push notifications, send them to the necessary leads, and obtain conversions. Below, you can see how to create a web push notification by simply using our service.

Chatbots

Although you might have heard that chatbots are primarily used for messaging applications, some companies use them for landing pages. Chatbots help visitors gather information about a particular product faster, serve as a support service, and guide them through a large quantity of information.

For example, with Kayak’s chatbot for Facebook Messenger, a new customer can easily find hotels, flights, and things to do. Within seconds, this chatbot searches many travel websites to find the information you need.

Besides travel and tourism companies, chatbots can be used in the healthcare industry, eCommerce businesses, online service providers, etc. They help improve your customer service, increase engagement, automate various processes, and collect information. Find out how to create a chatbot for Telegram with LIKE.TG.

Live chat

With a live chat, you can easily acquire new leads. Add a live chat widget to your website so visitors can ask questions, learn more about your brand, get help on a product, and make a purchase. This is your chance to convert a site visitor into a client. Below you can see how HubSpot does like that.

Now let’s jump into B2B customer acquisition strategies that will help you attain clients in this industry.

7 B2B Customer Acquisition Strategies

Building a customer base in a B2B environment is a comprehensive process requiring business owners effective marketing strategies and approaches. In this section, we’ll delve into the best of them to help you attain new customers.

1. Conduct online events. To show your expertise and products, consider organizing webinars and other online events. This will help you share knowledge latest trends and address customer concerns and pain points. As a result, you can position your company as an expert in your field trusted by people.
2. Incorporate targeted campaigns. After identifying high-value potential customers, tailor your marketing campaigns to their needs, preferences, and problems. This will help you personalize your offer and craft it to the specific needs of your potential clients, encouraging them to convert.
3. Use LinkedIn ads. Since, in a B2B environment, reaching customers is harder, you need to use special platforms like LinkedIn. With their help, you’ll be able to communicate your message faster and make your products visible to prospects. For better results, consider using LinkedIn ads. Sponsored content and InMail campaigns will help you reach decision-makers and discuss your offer.
4. Share content on LinkedIn. Consider sharing valuable content on LinkedIn, including industry insights, company updates, and thought leadership articles. This way, you’ll make your company and products visible to businesses that might be interested.
5. Create an affiliate program. With affiliate marketing, you’ll be able to attain new customers faster. You can partner with other companies that will bring your new clients for specific commissions. This way, you’ll prevent yourself from contributing a lot to other marketing efforts that might be less cost-effective.
6. Engage in LinkedIn groups. Search for groups related to your industry and interact with their participants. You can share your knowledge and show the value of your products. As a result, companies will notice your product and take it into consideration.
7. Attend conferences. Industry conferences, trade shows, and other offline events can be perfect places to showcase your products and communicate with potential clients face-to-face. By showing your expertise, you can establish a base of potential customers.

Now let’s find out how different brands incorporate these strategies to acquire new customers. In the section below, you’ll find our best examples.

Customer Acquisition Examples

Remember that to engage new people, you’ll need a multi-channel strategy that ensures effective messaging with your potential clients. Let’s see how famous brands manage to do this through various marketing channels.

AssignmentMavens

The service uses PPC ads to encourage customers to use their website and order an essay. As you can see, this ad appears when a user searches for websites that offer skilled writers’ services.

HubSpot

Twitter is one of the great ways of attracting customers since people are highly engaged in social media. Hundreds of millions of Twitter users enable companies to promote their business each month effectively. This example allows you to see how HubSpot tries to engage new viewers in their virtual customer experience conference called “CX Spotlight 2021”. By mentioning digital industry leaders and free participation, the company invites new participants.

Pepe Jeans London

Influencer marketing is another great way to win the trust of new clients. The team of the famous jeans brand decided to cooperate with a world-known singer Dua Lipa. This opinion leader, with more than sixty million followers on Instagram, helps Pepe Jeans London build brand engagement.

ASOS

As you can see, ASOS uses Instagram ads for its promotion. Since the brand is aimed primarily at young and stylish people, using this platform is a great idea for attracting new customers. It involves a call-to-action button to drive traffic to their website and boost conversions.

Pollfish

This survey platform provider uses pre-roll ads to promote its service through the popular YouTube platform. The ads describe the benefits of the website, encourage users to visit the platform, and obtain real-time insights from actual customers.

If you aim to win new customers, boost ROI, and ensure your company’s growth, be ready to implement various approaches. Research to discover the most appropriate marketing channels and methods that will allow you to attract more people to your business.