Customer acquisition is highly significant in growing your business. If you want to stay active and in business, you’ll need new customers. Customer acquisition isn’t a piece of cake, though. According to ProfitWell, customer acquisition costs have gone up to 50% in the last five years, it isn’t cheap and easy.
For small businesses, this is an even tougher challenge that you’ll have to overcome to succeed. “But how do I increase customer acquisition when I’m still just a small business?” Don’t worry, we got you covered. In this article, we’ll be telling you the top tips and best practices for great customer acquisition. Let’s get started.
First, What’s Customer Acquisition?
Customer acquisition is the process of acquiring new customers for your business. What you do to gain new customers, like the marketing and optimization you do, is a customer acquisition strategy, so you bring in new customers regularly.
However, keeping old customers engaged in your business, so they keep coming back, is another thing called “customer retention” which is another topic that is different from customer acquisition.
Customer acquisition refers to the process of attracting and gaining new customers for a business or company. It is a critical aspect of marketing and growth strategies, as acquiring new customers is essential for sustaining and expanding a business. The goal of customer acquisition is to convert potential prospects into paying customers by effectively promoting products or services and convincing them to make a purchase.
The customer acquisition process typically involves various marketing and sales efforts, which may include:
- Market Research: Understanding the target audience, their needs, preferences, and behaviors is fundamental to creating effective customer acquisition strategies.
- Lead Generation: Attracting potential customers (leads) through various channels such as advertising, content marketing, social media, search engine optimization (SEO), events, etc.
- Lead Qualification: Evaluating and prioritizing leads based on their likelihood of becoming paying customers. This helps allocate resources more efficiently.
- Sales Funnel: Guiding leads through a series of steps designed to move them closer to making a purchase. This may involve offering valuable content, discounts, or incentives.
- Conversion: Convincing leads to take the desired action, such as making a purchase, signing up for a service, or subscribing to a newsletter.
- Customer Onboarding: Ensuring a smooth and positive experience for new customers as they begin their journey with the company.
- Retention and Upselling: Focusing on customer satisfaction and retention to encourage repeat business and potentially upsell or cross-sell other products or services.
It’s important to note that customer acquisition cost (CAC) is also a key metric in this process. CAC is the cost associated with acquiring a new customer and is calculated by dividing the total acquisition expenses by the number of new customers acquired during a specific period.
For businesses to thrive, it’s crucial to have a well-rounded customer acquisition strategy that focuses on understanding the target audience, delivering value, and building lasting relationships with customers. Moreover, businesses should continuously monitor the effectiveness of their customer acquisition efforts and adjust their strategies based on feedback and market dynamics.
So, Why’s Customer Acquisition Crucial?
Why is this crucial to your business? Well, basically, to rake in revenue and profits, you need to acquire new customers. New customers = more revenue and profit. Acquiring new customers will help your brand become more recognized and help your business reach another level.
Basically, if you want to build and grow your business, having an amazing customer acquisition strategy is crucial. And now, here are our top tips for customer acquisition for small businesses:
Customer acquisition is crucial for several reasons, and it plays a significant role in the success and growth of a business. Here are some key reasons why customer acquisition is essential:
- Business Growth: Acquiring new customers leads to business expansion. By continually bringing in new customers, a company can increase its market share, revenue, and overall profitability.
- Revenue Generation: Customers are the source of revenue for any business. The more customers a business acquires, the more sales and income it generates.
- Market Competition: In competitive markets, customer acquisition is vital to gain an edge over rivals. Acquiring new customers can help a business increase its market presence and challenge its competitors.
- Customer Lifetime Value (CLV): Acquiring customers is not just about one-time transactions. Satisfied customers are more likely to become repeat buyers, leading to increased CLV, which represents the total revenue a customer generates over their relationship with the business.
- Business Sustainability: Relying solely on existing customers can make a business vulnerable to market fluctuations or changing customer preferences. Acquiring new customers ensures a steady influx of revenue and reduces reliance on a limited customer base.
- Product/Market Validation: Acquiring new customers can validate the demand for a product or service. It shows that there is interest in what the business offers and that it meets the needs of the target market.
- Brand Awareness: Acquiring new customers often involves marketing and promotional efforts, which also contribute to increasing brand awareness. As more people become familiar with the brand, it can have a positive impact on customer perception and trust.
- Feedback and Improvement: New customers can provide valuable feedback, helping the business identify areas for improvement and innovation. This feedback loop is crucial for refining products, services, and customer experience.
- Diversification: Expanding the customer base can help a business diversify its risk. If the company heavily relies on a few major clients, losing one of them could have a significant negative impact. Acquiring new customers spreads out the risk across a broader customer portfolio.
- Investor and Stakeholder Confidence: When investors see a business actively acquiring new customers, it signals growth potential and can boost investor confidence in the company.
While customer acquisition is essential, it’s equally crucial to strike a balance between acquiring new customers and retaining existing ones. Retaining loyal customers can lead to higher profitability as repeat customers tend to spend more and become brand advocates, bringing in new customers through word-of-mouth referrals. Therefore, a well-rounded business strategy should include efforts to both acquire and retain customers for sustainable and long-term success.
Some of the points mentioned above are explained below.
Research and Build a SMART Strategy
First, you want to research things about your already existing customers, such as their spending habits and how they use social media. Then, with the data you got, build a SMART (Specific, Measurable, Achievable, Realistic, Timely) strategy.
Always have specific and achievable goals that can be done in a timely manner. Remember to be realistic with your goals, so your strategy and plan will work out well in the way you want to. This way, you can reduce costs and any unexpected stressful matters.
Be sure to also be smart about your taxes, so there aren’t any extra costs. Generate your W2 so you can complete your tax return.
Optimize your Content
Optimizing your content is a great way to reach and acquire new customers. Make sure your website has great SEO, and the content on your social media channels and such has an amazing content that people can engage with.
If you don’t have the best skills in SEO and content production, then you should consider hiring an SEO expert or maybe a website design company to produce the best content. Although if you’re on a tight budget, you could always just learn these skills yourself because of the great free resources out there.
Provide Easy Payment Options
Up to 86% of online shopping carts are left abandoned. Yes, you heard that right! Why did this massive percentage of people abandon their carts? Because of the hassles and unexpected fees that show up.
For example, when people suddenly see huge shipping fees, people will find other cheaper fees. Another example is when the payment process takes too long that frustrates people, causing them to abandon their carts.
Providing easy payment options is a great way to increase customer acquisition. Making it easy for your customers helps you not only acquire, but also keep customers.
Network and Ask for Referrals
Taking part in networking organizations and such is good practice to spread information about your brand and generate word-of-mouth. Always remember to ask what your “target market” wants and needs, so that they know that you’re in service.
Then, we have good old-fashioned referrals that can bring in new customers to your business. With the help of your old customers, asking them for referrals is always a smart move for customer acquisition.
Retain Customers and Reward Loyalty
While acquiring new customers is crucial to your business, retaining old customers is as important as customer acquisition, so that you don’t have to keep on finding new buyers, and just keep your old ones happy and satisfied.
One way to do that is by having a loyalty rewards program or something similar so that your customers stay not only happy with your product/s or service/s but also more motivated to purchase your product/s or service/s. You can even add a referral or affiliate program, so your old customers can refer you to new ones!
Of course, you would want your affiliates to fill-up their 1099 since they technically are independent contractors if they make money with affiliate marketing.
More Useful Tips for Customer Acquisition
We have given you the top tips for customer acquisition for small businesses, but fret not, because we have even more tips that could increase your customer acquisition.
Here’s the list of more useful tips for customer acquisition:
- “Quality over quantity.” Always remember this because while consistent content may be good, if it is not quality content, people will frown on this.
- Use video content as much as possible. Video content is always more engaging to people, so this is a good move to do to reach more people.
- Partner with other brands. Co-branding is clever, so you can reach more people, and potential new customers.
- Be honest and authentic. People always love it when brands are always honest and straightforward.
That’s it for our list of additional tips to gaining new customers! We hope this list was useful to growing your business and helping you increase your customer acquisition.