Building Your Customer Base
Customer acquisition is difficult for any business. In fact, many studies have found that it is five times more difficult to acquire a new customer than to obtain an existing one.
As the digital world keeps evolving, the way consumers ingest and use information has changed – particularly in the way they shop and interact with new brands.
As a result of these shifts, acquisition strategies have evolved as well.
In today’s digital environment, successful customer acquisition strategies necessitate the proper execution of these three core strategies:
1. Calculate Customer Value
A chief component of customer acquisition is to not just seek to acquire any customer at all, but rather the ones with highest projected lifetime value (LTV).
For instance, if every customer you bring is a one-time buyer who never comes back after the first purchase, then you will have no recurring revenue. As a result, the return on advertising spend (ROAS) from your acquisition campaigns as a whole will be negative.
The truth is, the highest value customers – also known as most valuable buyers (MVBs) – who spend more, more often than the rest of your customer base are the ones who wind up driving the bulk of your revenue.
Below are ways to determine a new customer’s potential value. Ultimately, the ones who fall within the upper tier will be the most receptive to special, personalized dialogues designed to cultivate new relationships and stimulate further purchases down the road.
Understand the Acquisition Source
Oftentimes, the future lifetime value (FLTV) of customers correlate with the channel or media source that they were funneled through and/or as the type of message or call to action (CTA) that they responded to.
For example, a customer acquired through a sale offer on social media would generally have a lower FLTV than another who came through organic search. This is because the latter was likely actively seeking you out in the first place.
Paid Search and Social Media Analysis
When utilizing paid search via a search engine like Google for customer acquisition, you are granted access to a comprehensive overview of search terms tied to both your products and the types of customers that each one funnelled into your brand.
Equipped with this information, you can allocate priority to certain search terms by assessing which ones drew in the customers who demonstrated higher levels of value.
2. Identify Which Outreach Efforts Work (and Which Don’t)
Targeted acquisition requires a keen understanding of not just your customer universe, but the different segments that you are marketing to.
Along the way, you will find that certain messages and offers resonate more with certain segments. Therefore, pinpoint the chief segments (also known as customer personas) to hone in on and spend more of your resources working to bring them into the fold.
The most effective acquisition campaigns are the ones that maintain a close eye on promotion history and conversion rate in order to show how efficiently your advertising dollars are being spent. This affords you the ability to adjust your allowable advertising budgets and increase efficiency across the board.
“Half of the money I spend on advertising is wasted. The trouble is, I don’t know which half.” – John Wanamaker
Gone are the days when marketers – even pioneers like Wanamaker – could not attribute their customer acquisition campaigns to certain campaigns or creatives. These days, you have all of the technology and data at your disposal to help you understand both the efforts that are working and the ones that are not.
From there, you can realign your focus to better match the messages and channels that are showing the greatest conversion rates and return on investment (ROI).
Employ Omnichannel Marketing
The most effective and efficient acquisition campaigns are implemented across multiple channels using a multitude of data through analytics software.
If you reach someone through multiple channels, there are likely synergies that exceed the sum of the parts. In turn, make use of the channels that are most relevant to each customer and craft timely, relevant messages across each one to maximize their chances of conversion.
3. Leverage Automation Tools
The timeframe of openings to reach customers has changed dramatically in the digital age. Given the way people shop today, you must be able to respond to both their inquiries and behaviors almost instantaneously.
The fact is, there are almost countless amounts of buying options that can be executed with a mere finger swipe or click of a button. When combined with a vast sea of competitors vying for their attention, consumers have become more fickle than ever.
Modern marketing automation software can help calculate how much you are allowed to spend in order to acquire each customer. This is known as an acquisition allowable (or allowable acquisition cost) – which is gauged by projected LTV, ROAS, channel, and offer.
In turn, Predictive Marketing Automation (PMA) platforms are more necessary than ever in order to stay on top of who is interacting with your brand, take advantage of high-value opportunities when they arise in real time, and modify your acquisition efforts to help meet (and ultimately exceed) your benchmarks and goals.