A Complete Guide to Client Acquisition for Startups - Help Scout (2023)

Customers are the lifeblood of any business. That's why you need a strategy to continually attract new customers, but according to ProfitWell, customer acquisition costsup 50%in the last five years.

The problem is that many companies do not have a defined customer acquisition strategy. It's easy to keep doing whatthinkis working; however, this often results in you spending too little money on high-performing channels, or conversely losing out on channels that potential customers frequent.

The best way to improve customer acquisition is to create a clear strategy. In this guide, we'll help you understand how to build demand, track what you're spending, and convert leads to paying customers.

What is customer acquisition?

Customer acquisition refers to the activities and actions that a business undertakes to acquire new customers. A successful customer acquisition strategy helps you win new business, retain loyal customers, and increase profits.

It is important to remember that acquisition begins with the first contact with a new customer and continues until yourretention strategy—the two work together to maintain a profitable marketing program.

Customer acquisition covers all aspects ofcustomer journey, from lead generation to activation,consumer loyaltyand conversion rate optimization.

Customers don't always stick around, no matter how good your retention strategy is, so you need a way to fill the gaps and move your business forward.

How to create a customer acquisition strategy

To make planning easier, we've highlighted some best practices to keep in mind when creating a customer acquisition strategy:

1. Identify your ideal clients

The first step to customer acquisition is understanding your customer base, both your current audience and your target audience. This includes studying competitors and analyzing market research conducted byPew Research Centeror theUS Census Bureau.

Learning product-to-market fit will help you identify ideal customers and set marketing goals.

If you still don't have a good idea of ​​who your audience is, ask yourself the following questions:

1. What do customers achieve with your product or service?

2. What are the difficulties of your clients?

3. What are the demographics of your customers?

4. What benefits are customers looking for when buying your product(s)?

5. Where do your ideal customers find information?

6. Why wouldn't they buy your product(s)?

7. When does your ideal customer buy your product or service?

As you grow, following thesecustomer profilesit can help you analyze, understand, and expand your customer base. You can identify different characteristics and behaviors of your highest value customers, which you can use to more or less invest in the best customer acquisition channels.

2. Define your goals

With your ideal clients in mind, you can define your goals and objectives. Defining an end result will help you think through a customer acquisition plan and guide your efforts.

To meet revenue expectations, set goals for your customer acquisition strategy that take into account customer churn and current customer growth. You may earn $20 million in new business next year, but you may not meet your total revenue goals for the year if your industry has high turnover.

It's not hard to prove that your marketing efforts are working. By measuring customer acquisition metrics such as Customer Lifetime Value (CLV), Monthly Recurring Revenue (MRR), Customer Acquisition Costs (CAC) andturnover rate, you can create a strategy that aligns with your overall business goals.

3. Choose your customer acquisition channels

Identifying your ideal customers and customer acquisition goals is a great start to creating an effective strategy, but this is just the beginning. You need to think about which channels to use based on your research and what types of content work best there.

A customer acquisition channel is anywhere your customers first encounter your brand, whether through social media, organic search, or a paid ad. Customer acquisition channels are the way to attract new customers.

Some popular customer acquisition channels include:

• Instagram:Visually appealing posts and short videos.

• Facebook:Live video streaming, individual messages, advertising.

• YouTube:Longer, more informative and entertaining video content.

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• SEO:Long-form written content optimized for search engines.

• paid social networks:Short, snappy ads with eye-catching images.

• References:Rewards and discounts for loyalty.

We will discuss customer acquisition channels in more detail a bit later in this post.

4. Develop a unique strategy for each channel

You may want to take advantage of every possible channel to get started, but that could hinder your customer acquisition strategy. For example, if you're trying to reach customers in their 20s, your audience might be on Instagram or TikTok. It wouldn't be worth putting all your resources into Facebook Ads or Google Shopping.

When creating a marketing strategy for each channel, focus on:

• What content does your audience interact with?

• What your competitors publish.

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• What your KPIs say.

Depending on your customer acquisition strategy, you may not need to use TikTok if your customers are primarily on Facebook. Or if you find that you can say more in video than in words, YouTube or Instagram may be more helpful.

Research the best strategies for each channel you use to get the most out of your customer acquisition efforts.

5. Communicate with your customer base

It's hard to find the gaps in your customer acquisition process without direct feedback from your customers. To collect this valuable information, you must request it.

customer surveysEmail contact forms, customer interviews, social media posts, and blog posts are all great ways to communicate with your customer base. You can promote an offer, ask for feedback, and be available to chat.

Create a communication plan to have conversations with your customers on a regular basis. This will help you identify and capitalize on the value customers expect from your products and services.

6. Measure and improve your strategy

Building an online business without using analytics is like driving with your eyes closed. If you don't know what works (or doesn't work), where people visit, and how your pages work, you're headed for failure.

Many factors can affect customer acquisition, which is why it's so important to analyze and measure your results. Customer acquisition analytics can help you discover:

• Where customers hear about your products.

• Where did they buy products?

• Where they live.

• Other identifying factors.

Before you start tracking, find out what customer acquisition metrics you'll be tracking. Some common metrics include the following:

• Customer Acquisition Costs (CAC)

• New customer growth

• Customer Lifetime Value (LTV)

• turnover rate

• Lifetime Value to Customer Acquisition Cost (LTV:CAC) Ratio

Customer acquisition can seem daunting, but with the right preparation and tactics, your business can attract high-value customers, keep them longer, and grow more sustainably.

The 7 Best Customer Acquisition Techniques

As you begin to develop your strategy, consider the following seven customer acquisition techniques that will help get your products in front of more potential customers.

1. Content Marketing

Content marketing involves creating blog posts, guides, infographics, videos, podcasts, and more to answer questions, solve problems, and introduce your business to readers.

Content marketing is efficient, attractive and persuasive to capture website traffic. Plus, it generates more than three times more leads than outbound marketing and costs 62% less, according to research fromDemand Metrics.

With content marketing, you can:

• improve return on investment13xprioritizing blogs in your marketing strategy.

• Build authority in your industry with lower start-up costs and higher long-term benefits.

• Support the entire customer journey, from lead generation to acquisition and retention.

• Create videos that capture up to66%more qualified leads than unqualified ones.

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• Create marketing assets for multiple customer segments.

• Build trust with potential customers by considering61%of US consumers bought something after reading recommendations on a blog.

• Help your SEO efforts by adding indexed and more targeted pages to your website.

But how often should you be blogging? It depends. For smaller businesses, you may find success by publishing one to four blog posts per week. Larger companies (think Shopify or Forbes) often post articles daily or multiple times a day.

Even if you don't have the budget for a full content team, you can have people from different departments write content for your audience, hire an editor, and start publishing. The goal is to consistently create good content so you can deepen your readership and get the most out of your acquisition budget.

2. Search Engine Optimization (SEO)

Search engine optimization is the process of tailoring the content of your website to increase rankings on Google or other search engines.

SEO is one of the most important customer acquisition methods for online businesses, and your customers are likely to use search engines to find information. That is why it is a valuable channel to acquire new customers.

With SEO, you can:

• Generate quality traffic to your website.Unlike paid acquisition channels that involve unsolicited disclosure, customers can find you when they search for information. and morenon-client focusedapproach to customer acquisition.

• Reduce spend on Google Ads.Producing content that ranks high in Google search is an investment. But once it ranks well, it can generate the equivalent monthly cost of PPC campaigns so you don't have to spend as much on ads.

• Get more clicks than pay-per-click advertising.Although Google ads appear higher on search results pages,71,33%of people click on an organic result on the first page.

• Convert more leads.SEO leads have an average14,6%conversion rate vs. traditional outbound marketing (think direct mail or advertising), which has an average close rate of 1.7%.

The only downside to SEO is that it is not an overnight success. Getting your articles found in search results can take time, so plan for the long term. However, the SEO results are worth it.

NerdWallet, a personal finance company, has made a big bet on SEO in the last five years. As of July 2020, the company, valued at around $500 million, has generated nearly 14 million organic search visits. You'd think a company this size would be spending money on paid advertising, but it's quite a different story.

In a recent post onsome good content, the company revealed how it conquered the market in all the “Best of…” content on the web related to personal finance. Through well-written content and a simple SEO strategy, the company continues to win new customers on search engines.

3. Mobile marketing

Mobile marketing refers to reaching customers on their smartphones via SMS, Facebook Messenger, push notifications, or mobile apps. Mobile sales are expected to reach more than280 billion dollarsby 2020, representing 45% of the total e-commerce market.

With mobile marketing, you can:

• Easily create automated omnichannel campaigns.With marketing automation software likemany chat, you can create consistent, consistent shopping experiences across all customer touch points, including email, text, Facebook Messenger, and push notifications.

• Align with the demand of the consumer market.Today, the public wants to interact with brands 24/7. An omnichannel presence can help deliver an informed and consistent message across multiple channels.

• Personalize at every stage of the buyer's journey.Mobile channels help you more easily collect customer data to create more targeted reach for cold audiences.

For example,hideAWAY handmade, an Australian online retailer, developed a customer acquisition process for new website visitors that generated over $100,000 in additional monthly revenue.

The company captured new leads on its website, created detailed customer profiles, based on buying behavior, surveys, giveaways, and demographic data, to create personalized shopper experiences, generating 68,000 subscribers to enhance marketing efforts. future marketing and sell more products.

4. Social networks

For online businesses, it is important to have a presence on social channels like Facebook, Instagram, TikTok, and Twitter. with an estimate3.6 billion peopleOn social media around the world, it's easy to promote your business.

The benefits of being on social media include:

• Increase brand awareness by posting consistently.

• Show customers a more creative side of your business.

• Engage with your audience on social media to bring them back to your website.

• Promotion of your products to followers.

Three key tactics to consider when analyzing social media are:

• organic social posts— Instantly schedule or publish posts to Facebook, Instagram, and other social media channels where your audience lives.

• facebook ads— Find new fans, connect with existing ones, and retarget non-buying site visitors.

• instagram ads— Visually promote your brand to find new customers and retarget visitors.Courtney Jean, an online swimwear brand, ran photo and video ads on Facebook in a campaign to reach more shoppers and increase sales.

Using Facebook's ad platform, they automatically placed ads where they were likely to drive results at the lowest possible cost. They also used budget optimization to spread their budget across high-performing ad sets in real time.

In five days, theCampaña Courtney JeaneResulted in:

• A return on advertising investment of 22.9x.

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• More than 2,000 purchases.

• An 11% increase in conversion rate.

5. Email Marketing

Do you know what smart entrepreneurs do with the traffic they get from content marketing and SEO? Theycreate an email list.

Outside of direct sales, there is no better business result associated with first-time visitors than when they sign up to receive your updates. You can send offers or discounts for your products or services, exclusive content, customer resources and other promotional campaigns.

When you want to communicate something to your customers, email marketing is one of the most cost-effective ways to do it. Truly,A studyby the Direct Marketing Association found that for every $1 spent, email has an average return on investment of $38.

Some other reasons to use email marketing are:

• Getting started is easy.Email marketing platforms likeMailChimpNombrethey are easy to use and intuitive. They come with features to help you get signups, create emails, collect data, segment customers, measure success, and much more.

• To automate marketing tasks.Unlike paid marketing campaigns, you can set up an automation to trigger a series of emails that you can set and forget. From welcome series to post-purchase follow-ups to rewarding customers with special promotions, you can connect with thousands of customers quickly and easily.

• To increase brand recognition.Every time you send an email, your customer receives a notification. Whether they decide to open your email or not, they see your brand and offer, which can keep you top of mind the next time they want to buy something.

• It's easy to measure performance.Email marketing platforms also make it easy to collect data and use it to improve your marketing strategy in the future. You can track opens and clicks, ecommerce activities like abandoned cart recoveries and purchases, and even the amount of traffic you send to your online store or website.

If you have the means, it may be worth hiring an email marketing specialist. But if you don't have the budget, you can still invest in customer acquisition software with email marketing features that can broaden your reach and increase your sales.

6. Referral Program

Referral programs are an easy way to improve customer acquisition at your business. You have probably found them before for professional services or online stores. The programs are generally simple: the more people you refer, the more you save or earn.

Some of the main reasons to start a referral program are:

• The people are4xYou are more likely to make a purchase when recommended by a friend.

• The lifetime value of referred customers issixteen%higher compared to non-referred customers.

• Customers acquired through referrals have a37%higher retention rate.

• 81%of consumers are more likely to interact with brands that have rewards programs.

• Referred customers have a18%Lower turnover than customers acquired through other channels.

• Referred customers bringsixteen%more in benefits at least than non-referrals.

One of the top examples of customer acquisition through a referral program comes from the cloud-based storage company.mailbox🇧🇷 The famous program gives you and your friends an additional 500MB of free storage space, up to 16GB in total.

Upon launch, Dropbox's friend referral program increased signups by 60% and received more than 2.8 million referral invitations in the first month. They also went from spending up to $388 in advertising per customer to zero thanks to their referral program.

Dropbox now has more than 14.3 million customers and has continued to use this referral program to drive customer acquisition for nearly a decade.

When creating your referral program, give away something for free so referred leads have nothing to lose by signing up. If you are a SaaS company, offer Pro features for a limited time. For eCommerce businesses, give them a fair discount on their first purchase.

Once a customer interacts with your brand (and likes it), they will continue to refer new customers to your business.

7. Paid advertising

If you have a new business or an online store, you may need to invest more in paid advertising to acquire new customers.

Ads produce results immediately, driving traffic, leads, and sales right after launch. And paid ads can support SEO efforts by helping you find keywords to boost your organic search campaigns.

However, pay-per-click (PPC) can quickly get expensive without the right tactics. Some of the best practices to follow to maximize your ad spend are:

• Always include a remarketing strategy.Regardless of whether you run Facebook or Google ads, not everyone who clicks on your ad will buy something. Support your paid advertising with remarketing ads to (essentially) follow shoppers around the internet while you show your ads until they buy. Some brands even see1.300% ROIto use remarketing ads.

• Use Google Dynamic Search Ads.Dynamic search ad headlines and landing pages pull content from your site based on what a person was buying. They help keep your ads relevant, save you time, and increase your ad conversions.

• Use automation for Facebook ads.If you choose to run ads on Facebook, consider using a chatbot to start a conversation with paid traffic. It's an easy way to create interactive experiences for potential customers and maximize your ad spend compared to traditional methods.

Customer acquisition costs

Customer Acquisition Cost (CAC) is the total cost involved in acquiring a new customer, including the cost of marketing, research, sales, and products. It's an important metric because it helps a business determine how important a customer is. CAC also helps calculate the ROI of an acquisition strategy.

How to Calculate Customer Acquisition Cost

An essential part of maintaining a viable customer acquisition process is making sure the channels and tactics you choose work for your business. For that, you need to know how to calculate your CAC.

This is what a common CAC formula looks like:

CAC = (Cost of Sales + Cost of Marketing) ÷ New Customers Acquired

You can calculate CAC by dividing all costs spent on sales and marketing by the number of customers acquired over a period of time. For example, if you spent $100 on marketing and $100 on sales in one month and acquired 200 customers in the same month, your CAC is $1.

What is the average customer acquisition cost?

The average CAC by industry,according to HubSpot, It is:

• trip: $7

• Retail: $10

• Consumer goods: $22

• Elaboration: $83

• Shipping: $98

• Marketing agency: $141

• Financing: $175

• Technology (Hardware): $182

• Real Estate: $213

• Banks/Insurance: $303

• Telecommunications: $315

• Technology (software): $395

What is a good customer acquisition cost ratio?

For most industries, the ideal LTV:CAC ratio should be 3:1. This means that the value of a customer must be three times greater than the acquisition cost. If it's closer to 1:1, you're spending too much money.

Customer Acquisition vs Retention

In general, customer acquisition is the way to acquire new customers, from attracting them to convincing them to buy your products or services.customer loyaltyit happens after the purchase, as you try to retain new customers for a longer period of time.

When creating your customer acquisition and retention strategies, remember to focus on deliveryexcellent customer servicethroughout the life cycle. If you create a great customer experience from the first contact, you won't have to constantly spend as much money to acquire new customers.

Ready, set, fill your toolbox

It's time to take what you've learned and start building. Every entrepreneur needs a customer acquisition toolbox to help them work smarter than big companies.

Taking into account the capabilities and limitations of your business, create a strategy that prioritizes the pieces you want to deliver first to start driving customer acquisition.

Your business will benefit from smart marketing: acquiring customers in a way that sets you apart from the crowd and builds an enthusiastic customer base that you don't have to keep paying for every month.