How To Get More Customers Through Targeted Acquisition

The Guide to Marketing Nirvana [Step 6]

Customer Growth

Growing a business is actually very simple, as any new MBA will tell you. To grow, all you need to do is increase sales to existing customers, acquire new customers, or both.   But the truth is, as new MBA’s quickly discover, growth is not easy and customer acquisition is very difficult – particularly in this day and age where marketing has suddenly become so complex. As consumers are evolving in the digital world, their access to (and demands for) information has changed – particularly in the way they shop. Due to these shifts in consumer behavior, acquisition efforts – more so than ever before – must be implemented using a range of data and analytical tools across a variety of channels. We’ve discussed managing current customers in the first 5 steps of this series.  In this post, we’ll take a close look at finding new customers.

Segments and Customer Personas

Since the beginning of this series, we’ve stated that targeted acquisition requires a keen understanding of your customer universe and the different segments that you are marketing to.  After all, customer segmentation is fundamental for both prospecting and managing current customer relationships. In your acquisition efforts, you may find that different messages and offers are more effective for certain segments.  Continuous testing is how you pinpoint the key segments – or customer personas – that you should hone in on and spend more of your resources attempting to convert. Marketing automation systems provide structure around this testing process, by maintaining a history of how your tests performed.  Promotion history is perhaps the most valuable data available to support the customer acquisition process.

Timely Communications

While we have covered the idea of delivering timely, personalized, relevant communications to your customer base before, proper implementation of this tactic is even more important in the acquisition game. The aim here is to look for indicators of intention. For example, if you are aware that a prospect is shopping for a new car and you see through location or other data that he/she has walked into a competitor’s showroom, that is a clear indicator that they are in-market (or looking to buy) and browsing elsewhere. Or, if you become aware that a potential prospect is doing research on another competitive product online, make sure that you enter the mix with your own forms of communication as quickly as possible. Going back to the notion of the customer journey, knowing that someone is in-market is valuable information. At that point, it’s time to take action, generate awareness, cultivate consideration on their end, and ultimately incite a decision to purchase.

Customer Acquisition Source

Frequently, the expected value of a customer can be very different according to the channel or media source that they came through and the offer that they responded to. For instance, a customer found through a discounted offer on Facebook might have an average potential value, while a customer who discovered you through organic search could have a higher potential value – since they were actually looking for you in the first place. Therefore, you can learn a great deal of valuable information about a customer’s value by knowing which source led them to your brand. Good marketing automation platforms capture this data.

Acquisition Allowables

An acquisition allowable (a.k.a, Allowable Acquisition Cost) is the amount of money you may spend in order to acquire a new customer, based on a customer’s lifetime value and the return on advertising spend (ROAS) goal. Every organization has a different method for calculating allowables, typically identified by both channel and offer. Let’s say you calculate that a customer is going to be worth $100, and your return on marketing spend has to be at least 100 percent. In that case, you can spend up to $50 on each customer that you acquire. So if you spend $50 on an acquisition and need a 100% ROI, then each customer must generate $100 worth of revenue. With acquisition campaigns, some efforts are going to be home runs, while others will be strikeouts. Marketing automation platforms allow you to keep close track of promotion history, revealing how effectively you are spending your money while acquiring new customers by channel and offer. From there, you are in a position to refine the LTV of customers over time, refine your allowable advertising costs, minimize the strikeouts and optimize your media budgets.

Omnichannel Marketing

The timeline to reach customers has changed dramatically. Given the way people shop today, you have to be able to respond to both their inquiries and behaviors almost instantaneously. Marketing automation tools allow you to both understand customer value and autonomously respond through multiple acquisition channels. It also helps you decide how much you can spend on acquisition to successfully meet your goals. If you reach someone through multiple channels, there are likely synergies that exceed the sum of the parts (i.e. 1+1=3). In turn, the goal is to take advantage of all of the channels that are relevant to each customer in order to guide their conversion efforts.

Search and Social Media

If you’re using paid search through a search engine like Google to attract new customers, you can actually capture a detailed history of search terms and tie value to them. This is done by analyzing which particular terms brought in the types of customers who made larger or more frequent purchases and spending more to reach them due to a greater anticipated Return on Investment (ROI). Without the ability to sort through your customer base and identify which ones are buying which products at certain levels of frequency, you have no way of assigning any degree of value to them. In turn, you cannot leverage social media channels as effectively as any of your competitors who possess that capability. If you are selling women’s handbags and looking to advertise on social media, you can target your ads using LTV criteria from your customer profiles. By maintaining the history of such efforts, you may optimize your social media campaigns over time. With its built-in database of customer intelligence and the ability to customize algorithms that calculate LTV, a Predictive Marketing Automation (PMA) Platform can quantify how much you should be spending on paid search, social media advertising, affiliate marketing, and email prospecting – as well as to whom.

Response Modeling

For many retailers, direct mail is very effective for customer acquisition efforts.  This is due in part to an analytical process referred to as response modeling. The chief goal of acquisition response modeling is to rank-order prospects based on their relative likelihood to respond to a direct advertisement. With this information in hand, you can increase response/conversion rates while lowering advertising costs, or optimize mailing quantities based on a given budget constraint.  Therefore, you can modify your marketing approach in a way that maximizes the financial parameters you are working with.

Lists, Compiled Databases, and Co-Ops

Prospect names for email and direct mail campaigns can be sourced from a variety of marketing service providers. Marketing service companies, including list owners, compilers, and cooperatives will offer retailers the ability to market to prospect names. Selection criteria may include list source, purchase history, demographics and other attributes.  Response models and other analytics may also be applied. Having a key understanding of your current customer base allows you to better target prospect names from these third parties. Therefore,  a comprehensive history of promotion efforts will allow you to optimize these resources over time.

Location Advertising

Location-based advertising evolves your marketing capabilities in real-time by sending automated messages and offers based upon a customer’s smart phone’s GPS coordinates. A customer’s retail visitation behaviors, combined with their profile can be extremely useful information. Marketing automation platforms are central to using location information. We expect to see the cost of location-based advertising continue to come down – increasing the ability of retailers to fully take advantage of this methodology.

General Advertising

Even in today’s landscape, not all marketing is digital and direct. General advertising campaigns include ads (like TV, radio, or billboards) where conversion attribution is harder to assess. Nevertheless, we can do a better job today than ever before in reading the results of these general advertising campaigns. Well structured tests and customer data platforms that quickly assimilate data help us provide timely results of campaigns.


In today’s digital environment, successful new customer acquisition requires an understanding of three key elements:
  • Calculating customer value from different acquisition channels.
  • Identifying which outreach efforts work (and which don’t) for different segments.
  • Leveraging automated techniques to take full advantage of all potential opportunities.
Marketing pioneer John Wanamaker once said: “Half of the money I spend on advertising is wasted. The trouble is, I don’t know which half.” Thanks to PMA technology, today\’s MBA\’s will tell us that quote is no longer relevant. You now have the ability to know which half is working, and can spend the other half that you were previously wasting on channels and acquisition efforts that will prove effective in the future. As we’ve stated before, these methods function as another component of closing the marketing loop and operating as a continuously learning organization. Ultimately, this is imperative if you truly desire to establish your brand in the marketplace and ensure a sustained competitive edge over your competition. In our next post,  we’ll wrap up this series with a discussion of the key metrics to watch on your journey to Marketing Nirvana. Gary’s background includes over 30 years of analytics & database innovation for several leading Fortune 500 companies and Madison Avenue advertising agencies. Gary has been a frequent lecturer and author on the topics of database marketing and applied statistics. His articles have been published in DM News, Direct Marketing and the Journal of Direct Marketing. He recently was President of the Direct Marketing Idea Exchange and served on their Board. Gary received his M.S. in Industrial Administration from Carnegie Mellon University. Any further questions or insight? Email Gary at