A detailed guide to acquiring new customers for your business
Customer acquisition is a process that relates to all types of business model regardless of their size. It does not matter that you just enter the market and are trying to find the first 10 customers. A giant company acquiring thousands of consumers is no difference.
Unfortunately, business acquisitions include certain risks, and one of them has to do with the monetary system. Therefore, having a strategic and consistent approach will do wonders for your financial health. By balancing the invested cost to get their notice and the profit you earn from your consumers later, it is possible
Define customer acquisition
Customer acquisition refers to the process of locating and convincing potential customers to make purchasing decisions. It is important that the buying process can be measured and repeated. There are 3 stages in a customer acquisition funnel:
- Awareness: At the bottom of the stage is awareness. In this stage, you are supposed to bring about awareness and leads to your target audience. After having detailed demographics of your potential visitors, a wide and broad number of people who are interested in your products, companies are the major goals. They do not necessarily have any specific intention to buy products but they are aware of your business and can generate to their networks.
- Consideration: Lying in the middle of the funnel, potential buyers who have already been through awareness strep are likely to take some actions. The key psychological factor shows that they are considering to buy the products. Signing up for email lists or hit the following button on your Facebook fan page are some noticeable actions to prove it.
- Purchase: In the final stage, the nearly-to-become audience is taking actions that have proved a strong intention to purchase. It can be adding a product to their cart or using the service for one free month. The advance in digital marketing has made it way easier to keep track of how new consumers can be acquired with specific data. Those data and records of online actions help them to have a strategic approach.
The exact formula to calculate customer acquisition cost (CAC)
Almost every new customer comes with a cost that can be calculated based on the marketing effort put forth to acquire them. Marketing efforts to connect and acquire consumers is the cost for each new customer. And the results based on customer acquisition cost (CAC). After that, the profit can be calculated according to the below formula:
Average Order Value x Gross Margin – Customer Acquisition Cost = Profit
Thanks to the help of many acclaimed tracking tools like Google Analytics, a business owner can choose to experience different acquisition strategies and compare different results to unleash your business outcomes.
5 acquisition methods to consider for your next business plan
Apply paid advertising
Online advertising is one of the most popular methods to reach new customers. That’s why Facebook and Google Ad and ad-runned platforms have achieved massive success. They help business stores to optimize your ads to make the most out of it. One of the most common ways to acquire new customers is through online advertising. The reason many eCommerce brands turn to Facebook, Google and other platforms to run ads is that they provide extensive measurement tools that allow you to optimize your ads and get the most out of your budget. It is crucial to do careful research on different numbers of the marketplace, search engine and so on before choosing the most suitable one to execute paid traffic.
The common trait for almost all advertising services is CPMs. Based on demographics, interests and other traits, you can decide the target audience in a more scalable way. Through investing in paid ads, prospective customers can funnel to your channel in a smoothy way.
The speed to reach new customers and fast-growing experiences are the major feature when it comes to paid advertising. By paying for traffic, you can save a ton of time compared to other traditional methods. Though it may seem prohibitive at first, the vast number of customers getting at your door is the sweet long-term results that you will thank later.
Though digital marketing is the trending tool these days, traditional methods still have their own charming features. Printed flyers or TV ads that used to be widely popular a long time ago can also be useful these days. It can help you to convert viewers into buyers in diversity and with small scale efforts. Moreover, internets and virtual reality have upgraded the traditional marketing method by working with each other to produce both virtual and physical products to your customers. The perk of the apply traditional method is that it can easily infuse consumer trusts as suggested by some well-known U.S studies.
However, there can be some potential riskiness. One of them is the lack of exact tracking data you have with a digital campaign. Besides, the lack of flexibility and updates may hinder some strategists from choosing these platforms. For example, programmatic advertising can allow businesses to constantly check the status every second, while it may not be the case with the traditional marketing approach.
Getting your brand awareness to spread is easier than ever thanks to the offer with influencers to get them to promote for you. Influencers via such online networks as Youtubers, Instagrammers can reach relevant audiences and get them to buy products for you. However, you have to be really careful about choosing the most suitable ones as there are hundreds of unqualified people out there. They should at the same time be able to generate content that can speak up your brand attitude.
Customer acquisition is all about creating an effective strategy to let customers get to know your brand. Later it is about persuading them to purchase items from your store. Therefore, knowing which acquisition method works best for your brand can make a huge difference to the business. Besides, remember that as your business has developed, there would be many other demanding tasks to cover. At that moment, be sure to seek for some amazing supporting tools like Shopify apps to enjoy the most professional help.