Marketing is tough in this day-and-age. Teams have shrunk, budgets are strained, and every penny needs to deliver ROI. That’s why you need a foolproof approach to customer acquisition.
Now is not the time for fluffy wait-and-see tactics. You need a strategy that is proven to work. One that attracts and converts new customers and keeps companies healthy – and investors happy.
This blog will walk you through a foolproof strategy and how to create your own – starting with a quick definition of customer acquisition and customer acquisition cost (CAC).
What is customer acquisition?
Customer acquisition is a marketing strategy to gain more new customers. A good customer acquisition strategy generates demand, nurtures them until they become sales ready, and captures demand, converting them into customers.
Acquiring customers is an essential element of marketing, but what is the difference?
The difference between customer acquisition and marketing
In short, marketing is the action of a business promoting and selling products and services, and customer acquisition is the result of marketing.
To define customer acquisition a bit further, let’s take a look at the customer acquisition funnel.
Customer acquisition funnel
Because prospects go through different decision making stages once they come across a brand, it’s important to understand your customer acquisition funnel.
While there is a lot of debate about how people buy today, most agree on six distinct stages:
- Awareness: This is usually the first time a prospect comes into contact with your brand.
- Interest: At this point, your brand has piqued their interest.
- Consideration: At this stage, they know a bit more about your company and have realized your product or service might be useful. Their next question will be whether they can trust you.
- Intent: Once you’ve demonstrated expertise and trust, prospects will be far more willing to be serious about your brand. But that doesn’t mean they are ready to make a purchase.
- Evaluation: At this point, prospects can be only a step away from making a purchase.
- Purchase: Once they have gone through steps above they are now ready to buy.
Side note: This is not a linear journey. Evidence suggests people often hop around these stages as they consider their trust, pain points, and all available solutions. That’s why measuring your approach and understanding the total cost of acquiring new customers is so important.
What is Customer Acquisition Cost (CAC)?
Customer acquisition cost is the approximate total cost of acquiring new customers. It includes key elements such as advertising costs, marketers salaries, and salespeople’s salaries – divided by the number of customers acquired.
It’s a really useful calculation to help you make sure that you’re using the right customer acquisition strategy.
With that in mind, let’s take a look at some of the key steps to create a robust strategy.
How to create a foolproof customer acquisition strategy
It’s a little known fact that only a small proportion of your audience are in the market to buy right now. That’s why you need an approach to acquiring customers that focuses on generating demand in your market and capturing that demand when they are ready to buy.
Here are the key steps in the process:
A deep understanding of a target audience is fundamental to your customer acquisition campaigns. Customer personas help you to understand customer expectations, concerns, and motivations.
Here are a few characteristics of a good persona:
- Make sure you tie back every aspect of your personas description to real data (observed and researched).
- A persona focuses on the current state (how prospects feel today), not the future (how prospects feel in the future).
- A persona is context-specific (it’s focused on the behaviors and goals related to a product).
Find out more about building personas and get a free template here.
Once you fully understand your target personas, you need to define your targeting approach. Through segmentation, you can identify niches with specific needs, new markets to find new customers, and deliver more focused and effective marketing messages.
Well-known ways to segment your audience include:
- Demographics: Breakdown by: age, gender, income, household (or business), business size, job title, and more.
- Psychographics: This refers to personality based behavior including attitudes, hobbies, risk aversion, leadership traits etc.
- Beliefs and values: Similar to the one above, this one focuses on cultural beliefs, values, and religion.
- Lifestyle: This refers to hobbies, recreation, entertainment, and other non-work pursuits.
- Behavior: This considers the nature of a purchase, brand loyalty, usage level, and channel preferences.
- Geography: Finally, this is where you might drill down by country, region, area, population density, or even climate.
Now that you fully understand your customers and how to best target them you can get to the good stuff: Demand generation.
Demand generation (or demand gen) is a brilliant strategy to drive awareness and interest in your products or service. It covers all your marketing and sales initiatives at every touchpoint in the customer journey.
Your key focus here is to build trust, increase brand recognition, and position your brand as the ‘go-to’ within your sector.
Once you have created a demand in the market, you need to keep your brand top of mind through nurturing.
Drip marketing and remarketing campaigns are a great way to keep your brand top of mind among those prospects who aren’t yet ready to buy.
Tactics like drip campaigns and remarketing enable you to engage people still in the evaluation stage of the funnel.
It’s also important to have unique and engaging content, hit the right keywords, and craft content that captures audience intent.
The final part of your customer acquisition approach is to have a strategy in place to capture demand.
While demand gen focuses on raising brand awareness and increasing demand for your product or service, demand capture focuses on converting engaged audiences into quality leads.
Key tactics include intent-based SEO, PPC, advertising, and sales follow-up.
Bonus: Tools and software
As a bonus point, all of this can be made 100% easier to manage with the right tools and software.
This is where monday.com comes in.
Create the best customer acquisition strategy with monday sales CRM
You need to have the right tools in place, including project management tools and customer relationship management software (CRM) to keep contact information organized, and automations that prevent essential tasks from slipping through the cracks.In short, companies with a strong CRM solution will have an easier time turning engaged customers into actual revenue.
Automations on monday.com, for example, can be set-up to remind salespeople to follow-up, so they never forget to communicate next steps to the buyer. Before meeting with a prospect, sales reps can also get a rundown of all the ways they have interacted with your brand – including website visits, content downloads, LinkedIn profiles and more.
Interested in how monday.com can help elevate your customer acquisition strategy?
If you still have burning questions about customer acquisition, take a look at the most frequently asked questions below.
Frequently Asked Questions
What is the difference between customer acquisition cost (CAC) and CPA?
While CAC and CPA are similar, there is one key difference: CAC measures the cost to acquire a new customer, while CPA measures the cost to acquire a lead.
Why is customer acquisition cost important?
CAC is an important KPI to measure the effectiveness of your customer acquisition strategy and adjust it over time. It’s also a useful metric for potential investors, allowing them to understand the scalability of your business.
What is a customer acquisition example?
An example includes a prospect visiting your website and comparing prices with similar merchants. If they are convinced of your brand and product, they’ll purchase your product and become a new paying customer.
Read to get started with acquiring more customers?
While customer acquisition strategies like the above are a must, you need to build from there. It’s an experimental process, trying to figure out which exact tactics are right for your business.
For the most part, though, the strategies listed above are guaranteed to work for any business, when done right, and managed well.