Understanding Customer Acquisition Strategy.
The availability of dozens of marketing channels and content strategies in the digital space has created a paradox of choice for business owners and marketing managers. When trying to select the right platforms to maximize your customer acquisition strategy, choosing how to manage resources and investment can be paralyzing. To help understand what Customer Acquisition is, we’ve broken down our personal strategy in the content below to maximize ROI. Each business has unique demands and challenges associated with the targeted market. Therefore, we have outlined universal tactics we found while developing customer acquisition strategies for our clients.
What is Customer Acquisition?
Acquiring and retaining customers is the crux of all businesses, regardless of product, service, or size. When a lead is generated through marketing efforts, conversion of that lead and the relationship generated throughout this cycle is the customer acquisition process. The cost associated with that process must be measured in conjunction with how much value each customer brings to the business.
Incorporating different tactics to lower customer acquisition costs while maximizing the impact of resources is the challenge faced when creating a customer acquisition strategy. It is not easy to stay on top of ever-changing paid digital advertising trends, but if you’re serious about your market presence — it’s a must. The Digital Marketing Institute recently published this helpful guide for best practices in customer acquisition. When selecting a marketing channel for investment, it is imperative to maintain focus on your customer profile and the targets you wish to hit.
How to Measure Customer Acquisition
Once you have established what customers you wish to target and what platforms to use for engagement, you can start measuring results. Creating KPIs is a great way to measure Customer Acquisition Costs (CAC) – below are a few simple examples:
New Customers Added/Total Customers = Percent Acquisition (in a time period)
(Sales Growth – Marketing Investment) / Marketing Investment = ROI
Carolyn Edgecomb at IMPACT Blog lays out 10 great KPIs to measure marketing investments. Our SunCity advisors have found that creating custom reporting and dashboards for customer acquisition metrics are great ways to track results and make them easier to understand. Applying analytics to these metrics can help you understand where to maximize your marketing resources.
How to Lower Customer Acquisition Costs (CAC)
The most important and often most challenging part of a customer acquisition strategy is maintaining a focus on your target market. The paradox of choice in digital marketing means that it is sometimes difficult to optimize a marketing strategy, leading to frustration from overspending and low ROI. Understanding the strengths and weaknesses of each marketing channel is a great way to match your strategy to your target market. Building and maintaining a relationship with your customer base is vital for lead nurturing, conversions, and retention.
Paying attention to customers in all parts of the sales funnel can help eliminate customer churn while generating additional business through referrals and testimonials. Tracking data and implementing the analytical tools discussed above is the step to lowering your CAC. Using the data gathered from various marketing channels should allow you to invest strategically to improve upon successful campaigns. Demi Oba of Smile.io does a great job of breaking down CAC reductions into 4 main steps. Remember that the customer decision journey is a cyclical loop, not just a funnel, so follow your analytics and listen to customer feedback.
One of the best ways to track your customer’s journey is through newsletter development and email campaigns. This allows you to track the actions outside of your website and determine whether your content is appealing to leads. If so, you should be able to convert them to customers.
One of the best ways to reduce your customer acquisition cost is to develop long-term, sustainable marketing processes. For example, if you look at the long-term results of paid ad campaigns, they may not drive ROI. But, organic traffic through a strong foundation of SEO tactics can pay off into perpetuity.
Hiring a San Diego SEO expert can allow you to build out SEO campaigns that will provide more value than most paid advertising strategies in the long run. We em courage you to reach out and learn more about how a strong SEO plan and a focus on execution can result in lowered costs to get users. And, guess what? Those users turn into customers and that’s how to revenue gains occur without paying directly for each lead.