You're selling your best products on your website, and you're expecting to sell them in no time.
So, you think of strategies you can use to acquire customers.
You search on Google, read different blogs, or watch educational videos on Youtube.
But... it's... just... not... working...
And this is not new.
I've seen many frustrated and disappointed business owners who think they've put in the work... but not getting the results they want.
Not hitting their target profit and revenue...
And no loyal customers...
But what if I tell you there's another way?
You can acquire new customers every day, and you can achieve your target sales.
That's why I'm here to teach you about customer acquisition. And how you can attract new customers.
So, I won't keep you waiting!
What Is Customer Acquisition?
Customer acquisition is acquiring new customers to buy from your ecommerce store.
This is the process of bringing your customers down to the last stage of the conversion funnel.
Speaking of which... there are actually different stages of customer acquisition.
This is the conversion funnel.
Let me break down the customer acquisition funnel for you.
- Awareness. It is the first stage of the customer acquisition funnel. Now, potential customers are aware of your brand. They already know about the products or services you're offering.
- Interest. At this stage, your potential customers are showing interest in what you can offer to them.
- Consideration. Now, your potential customers are considering buying from your ecommerce store. They're more familiar with what you offer. They're also seriously considering purchasing from you.
- Intent. Your potential customers now are intending to buy. They're probably adding your items to the cart.. researching about your products.. reading reviews, etc.
- Evaluation. So, before your potential customers purchase from you... they want to evaluate the benefits. Not just that, it can also be something personal. They might want to evaluate their personal costs or budget.
- Purchase. Potential customers now turn into paying customers! They have already made a transaction with you.
Now that you know the customer acquisition definition and customer acquisition funnel, you're probably wondering.... why is this even important?
Let me tell you the importance of customer acquisition.
Importance of Customer Acquisition
1. It increases the brand awareness
As I've mentioned above, brand awareness is the first step of the customer acquisition funnel.
And as your customer base grows, more people become aware of your brand.
This also means... an increase in potential buyers if they refer you to people they know.
Sounds good, right?
Another one is...
2. It keeps your business growing
More paying customers, more sales!
That means... you can have more resources to scale your business.
And the more you step up your game, your customer acquisition will improve over time. You can check this using the customer acquisition formula (which I will talk about later! ?)
Do you like the sound of it?
Let's go to the last one!
3. It increases your customer retention
Since you are acquiring more customers, there's also a high chance of increasing your customer retention rate.
Because the good news is...
You can easily retain an existing customer as compared to acquiring a new one!
But wait... what's the difference between the two?
Let's dive deeper!
Customer Acquisition vs Retention
As I said, customer acquisition is acquiring new customers.
On the other hand, customer retention is retaining your existing customers. These people already purchased from your ecommerce store. They are making purchases repeatedly.
So... which is more important? Acquiring or retaining?
Both of them!
Because acquisition adds to your number of customers. But it's easier to make sales through retention.
So, safe to say that they're both beneficial to your business. There are just different ways to increase these two.
But what's the cost of Customer Acquisition vs Retention?
Let me get this straight. Acquiring a new customer is five times more expensive than retaining an existing one.
And again, both of them can be beneficial. Because even if it costs you more, at least you can expand your customer base.
So, is the difference between Customer Acquisition vs Retention already clear to you?
Let's get into the next one!
Customer Acquisition vs Lead Generation
Lead generation is identifying potential customers who might buy what you sell.
Let's have an example.
Suppose you have a product catalog before any potential customer can make a purchase. And if a customer downloads that catalog, then she can be a lead.
Why? Because she showed an interest in your products. Even if there's no assurance that she'd make a purchase.
So, you can generate leads through newsletters, sign-up forms, pricing downloads, etc.
And your leads can actually impact your Customer Acquisition Cost (CAC).
Now you know the difference between customer acquisition vs lead generation.
But... how can you even compute it?
Customer Acquisition Cost Formula
Here is the Customer Acquisition Formula.
To compute your customer acquisition rate, you just need to divide your Marketing Cost (MC) and Customer Acquired (CA).
Let me be more specific:
You will have to break down your Marketing Cost. So, this includes your employees, software, tools, ads fee, etc.
Let's say you are paying $10,000/month for a Marketing Staff to manage all your ads. And you spend $5,000/month on Facebook Ads. And $50/month for the tools. That's all for the month of November.
So, you have to get the sum of your Marketing Cost first. That's $15,050.
And then let's assume that you were able to acquire 100 customers for the month. Let's divide that.
$15,050/100 = $150.5
Your Customer Acquisition Cost is $150.5 for the month of November.
You can compare it with your previous Customer Acquisition Cost. Then determine if you are able to minimize your cost. Or if you increase your customer acquisition rate.
So... now that you know about the customer acquisition formula... why don't you let me show you the good stuff?
5 Customer Acquisition Strategies For Your Business
Here, I will tell you 5 effective customer acquisition strategies. These will help you scale your business!
Let's start with...
1. Blog Posts
A customer acquisition strategy you can start is creating blog posts.
Why? Blog posts can be helpful in acquiring new customers. There are people who might show interest in how your products can help them.
Let me give you an example:
Au Lit Linens is a linens business. So, it has a blog that talks about educational things. For example, comforters, how to be a morning person, and knowledge about sleep.
Now, you may ask... why do you need to do this?
Well, let me show you how it helps...
- Showcases Authority. Having a blog positions you as an industry expert. Of course, as long as you write about topics related to your products. You can also build trust among your potential customers.
- Improves your ranking. A blog with optimized keywords can improve your search engine ranking. And this is good for your business because you can improve your brand visibility.
- Time-consuming. Writing a blog might be time-consuming if you don't have someone do it for you.
- You always need new ideas. Running a blog means you need a stream of blog topics to write about. And this can be a challenge if you're running your business alone.
So, what's next?
2. Social Media Marketing
If you want to connect with your target audience, social media marketing might be the answer! You can also make your brand known in the digital space.
And as I said above, retaining a customer is cheaper than acquiring a new one. But through social media marketing, you can acquire and retain customers.
Let's see Nike as an example.
Nike uses its social media platforms to raise awareness about its brand and values. Also, they're doing a good job in building a community on these platforms.
As of writing, Nike has 178 million followers on Instagram. Then 36 million on Facebook, and 8 million followers on Twitter.
So now, tell me if this isn't an effective customer acquisition strategy.
- You can take care of your customer relationships. Based on where your customers are in the customer acquisition funnel... you can build a community and talk to your customers and potential ones using social media.
- You can turn your followers into customers. And because you are on social media, it's easier to promote your brand. That's why if your followers like what you're posting, you can turn them into paying customers.
- It takes time to grow. Growing on social media is not as easy as 1 2 3. You need to give it some time before you grow your platforms and make sales.
- You need more resources. Want your social media platforms to be effective? You will need to create pleasing visuals, write a compelling caption, and more. And to do this, you will need more resources.
Let's get into the next one!
3. Influencer Marketing
Many brands are using influencer marketing to connect with their target audience.
But wait, what is influencer marketing?
It's working with online personalities who have the same audience as yours. You can work with them to promote your products.
Influencer marketing can also help in customer acquisition. Especially if the audience trusts the influencers so much.
For example, you are selling handbags. Then you have to find the best social media influencer for your brand. Someone who's into fashion and whose audience might like your handbags.
Let me show you something...
Look. Fashion and lifestyle influencer, In The Frow, partners with a luxury brand. She's promoting their products. But she's the perfect influencer because she has an audience with an interest in fashion.
So, why is it a helpful customer acquisition strategy?
- Increase brand visibility. Do you want instant exposure? Partner with an online personality who has thousands of followers.
- Increase sales. As I said, if their audience trusts them and the brands they work with... there's no problem increasing your sales!
- Influencer rates. You can still work with influencers without spending too much. But if you want to work with online personalities who have hundreds of thousands to millions of followers... then be ready to pay their fees.
- Finding the best influencer. So when you're working with influencers, you also need to find the best one whose values align with your brand. And it can be a challenge.
Psst... are you already liking these strategies? I have more!
4. Paid Ads
There are different kinds of paid advertisements, such as social media ads, display ads, etc. But here, I will be talking about Pay Per Click.
So, it is a part of Search Engine Marketing where you can bid on search engines to show your website on top for certain keywords.
Let's see an example.
I searched for "white sneakers for women," and you can see that the top result is an ad.
So, if you want this customer acquisition strategy for your business, you can try this method.
But let me tell you more about it:
- Immediate results. If you want to increase your website visits, then you can get immediate results if you paid ads. Why? Because your website is on the top of the search engine results page.
- Targeted demographics. You can target different demographics of your ads, depending on their age, gender, location, etc.
- It can be costly. If there are internet users who click on your links without making any purchase, it can cost you more.
- It needs further research. You need to research relevant keywords.. segment your audience.. analyze your competitors, etc. So obviously, this needs more of your time. And if you're running your business alone, this may be challenging for you.
And last but not least...
5. Referral Programs
A Referral program can be an effective customer acquisition strategy.
How? Because let's say your customer purchase something off your website. You can give them an incentive on their next order if they refer a new customer.
Not only that, because the new customer gets an incentive, too. It can be a free shipping fee, discount codes, sample products, etc.
See? You can retain an existing customer and you acquire a new one!
Let's have an example:
You can see in this example that if a customer gets $20 worth of product, they and their friends can get $20 after the latter's first purchase.
Everybody wins, right?
So, let's talk about its benefits and challenges.
- New customers. Referral programs can help bring in new customers because of the incentives.
- Increase customer loyalty. 67% of loyal customers spend more than new ones. So, referral programs can increase your customer loyalty.
- Not everyone might feel the excitement. Your customers might not even join your referral programs.
- It takes time to find out what your customers want. You might think that your referral incentives are exciting... but you need to know what your customers want.
So... what are you going to do now?
Start Acquiring New Customers!
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