As a small business owner, I’m always looking for ways to increase my client base. But sometimes it’s hard to know where to start. Recently, I came across the client acquisition definition and realized that I didn’t really know what it meant. So, I did some research and put together this guide on the basics of acquiring clients. Hopefully, it will help you too!
Client Acquisition Definition
What is client acquisition? The general client acquisition definition is the act of gaining customers by convincing people to buy your products.
Businesses and companies use customer lifetime value to determine how much revenue a customer will bring to their business.
Acquiring customers through marketing efforts requires a set of methods and systems for managing the processes involved.
Customer acquisition strategies that work often include referral programs and loyalty programs.
Customer acquisition is the connection between advertising, which attracts customers, and CRM, which manages those relationships.
The Customer Acquisition Process
Acquiring customers is no easy task. It requires foresight and strategy. There are many different ways to acquire new customers, but there are a few basics that should be included in any customer-acquisition strategy.
The first step in any effective customer outreach strategy is identifying high-quality customers. Customer acquisition strategies include contacting potential consumers through telemarketing and email lists.
By using customer acquisition methods, companies can identify individuals and businesses that express interest in products similar to their own. This allows them to qualify leads and determine which ones are more likely to result in a sale.
Next, companies use various research methods to qualify leads and determine their viability. This allows businesses to gauge whether or not a lead is worth pursuing further.
If it seems like the customer is a good fit for your company, his status as a lead is upgraded and assigned (or reassigned) to one of your salespeople. This allows your rep to follow up, establish a relationship, determine his/her needs and figure out how your products relate to them.
This helps salespeople better understand what potential customers are looking for and allows them to more effectively pitch the products or services they have to offer.
Salespeople can identify any additional needs of prospects through conversation and interaction. By offering additional products, salespeople can increase the value prospects see in purchasing the products they are already considering.
How Much Does It Cost to Acquire a Customer?
Companies don’t want to spend more money on getting a customer than the customer spends. This is known as the customer acquisition cost (CAC).
CAC can be calculated by figuring out the total cost of acquiring a new customer and dividing that by the total number of customers acquired over a certain time period.
The costs of acquiring new customers and the value of those customers are important metrics for many companies.
Companies need to focus on customer acquisition and obtain a high ROI. The lifetime value (LTV) to CAC ratio should be high to be successful.
A ratio of 3:1 LTV-to-CAC is a great level to aim for.
Benefits of Customer Acquisition
Companies often have trouble acquiring new customers, and it’s even more challenging to target the right ones. That’s why many companies use customer acquisition methods to help them grow, and acquisition programs that are targeted at specific types of customers are cost-effective.
If you’re a new company, or if your product isn’t as well-known as others on the market, it’s especially important to focus on customer acquisition.
As businesses expand, their priorities should shift from focusing on attracting new customers to keeping existing ones. Keep in mind that the costs associated with acquisitions are usually higher than the ones associated with retention, so a detailed analysis is necessary. By understanding the value their existing customers bring, organizations can make better decisions about how to invest their time and resources.
As companies begin to measure their customer value, they can better assess how efficient their acquisition process is. This allows them to grow more efficiently and to better understand how to keep their customers satisfied.
4-Step Customer Acquisition Process
The acquisition process is the act of getting customers. Your company should design every step of the process for attracting and converting new buyers.
By defining and mapping out every step of the customer onboarding and acquisition processes, you can streamline the entire process. By monitoring the maps, you can pinpoint any weak spots in the process and make adjustments accordingly.
Step 1: Identify Your Audience
The first step in designing a customer acquisition strategy is to identify who your ideal customer is. You’ll want to do this for each of your buyer personas.
To truly understand your customers, you need to personalize their experience. One way to do this is by tailoring your messaging to their interests, needs, and behaviors.
To identify and understand your audience, your brand can employ various methods including:
- Creating a target prospect profile, otherwise known as a buyer persona
- Conducting market research through online platforms and focus groups
- Analyzing new customer profiles
- Leveraging third-party data from competitors
- Understanding social and search trends for understanding the needs of customers using digital conversations
Step 2: Define Your Strategy and Make a Plan
Once you’ve identified your targeted customer, you need to analyze your data and leverage best practices and industry trends to develop a communication plan for your program.
When you’re thinking about your audience, it’s important to consider which stage of the customer journey they may be in. This will help you determine what kind of content will be most useful and relevant to them.
How you communicate with people during the discovery and evaluation stages should be different than how you communicate during the decision and implementation phases.
To optimize new customer acquisition, your plan should include:
- A cross-channel activation strategy with connected communications across email, display, search, social, mobile, and direct mail
- A messaging matrix should consider digital voice and address your prospects’ needs and attitudes.
- A testing and measurement plan should define KPIs such as impressions, click-through rate, new customer acquisition, cost per acquisition (CPA), return on investment (ROI), and return on ad spend (ROAS).
Step 3: Launch Your Campaign
Now that your buyer personas have been identified, your communication channels have been determined, and your key performance indicators (KPIs) are all set up, it’s finally time to launch your campaigns! During this stage, it’s critical that you monitor your pre-determined KPIs and collect data. This will allow you to make adjustments to your campaigns and ensure that they are effective.
Step 4: Measure and Optimize
Your key performance indicators (KPIs) are put in place to measure the effectiveness of your lead generation efforts. These metrics should be constantly monitored and optimized for the best results.
The goal is to improve campaign performance by eliminating underperforming campaigns, boosting effective campaigns, and resolving any issues discovered through monitoring.
If traffic is good but conversions are low, try experimenting with different landing pages. Try using various types of content or CTAs to see which one works best for your target audience.
Benefits of Customer Acquisition
Acquiring new customers is the lifeblood of all businesses.
Customer acquisition is a critical component of a healthy company. Not only does it help to balance for normal customer loss, but new customers are typically more engaged with your brand, which can decline over time. Thus, understanding the customer acquisition process is integral for preparing financially for market and customer needs.
For instance, if $100,000 is spent on your advertising campaign, you can estimate that X number of new customers will be gained.
This helps you allocate funds, stock your inventory, and manage your operation without wasting resources.
Case Study: How a Restaurant Brand Prioritized Acquisition
We recently helped a restaurant quantify its acquisition strategy. We used transaction data to help them understand which customers were most valuable and how to best acquire new ones.
Their family brand knew how important email was for in-restaurant traffic and knew that it should be a big focus of their new program.
They were unsure of how to allocate their resources between acquiring new customers and retaining existing ones.
We helped the client analyze their subscribers’ lifetime values and develop a comprehensive customer acquisition strategy. This included a redesign of their user interface, integration with other channels, and the creation of their strategy for growth.
The restaurant brand saw double-digit growth in existing channels and found that new channels had a promising impact on the overall program.
Our cross-brand acquisitions have been very successful, helping to drive our growth by over 2X within 9 months. This has had minimal impact on our unsubscribe rates and has actually helped us grow our revenues. This has been a major part of our growth and has helped the company meet its goals.
How to Improve Your Customer Acquisition Strategy
Acquiring customers is a huge part of growing a business, so whether you’re just starting out or an established business, having a plan for acquiring more customers is a smart idea.
A robust acquisition strategy is both flexible and diverse.
1. Make Your Strategy Sustainable
A sustainable customer growth strategy will ensure that your business can continue to grow. To do this, you must make investments in your marketing strategy – whether that’s money, time, or resources – that you’ll be able to uphold in the long term.
If you want your blog to bring in new visitors, you need the time and resources to consistently produce quality content. That way, you’ll attract people organically over the long haul.
This is why inbound is more effective than outbound marketing — it builds traffic over time, which turns into customers.
Consider that in comparison to advertising, which is a great way to acquire new customers … as long as your ads are alive.
2. Build Flexibility
Your acquisition strategies should be flexible enough to account for changes in the market, the ways people buy, and the ways in which you market to them. It used to be that salespeople were the gatekeeper of information, but that no longer is the case.
According to research by Hubspot, 81% of customers are more likely to listen to their friends and family over a company.
If your company’s customer acquisition strategy relies solely on salespeople, you’ll be in a tough spot. To be responsive to market trends, keep your strategy flexible.
3. Find Your Target Market
You cannot be all things to all people, and your acquisition strategy will be ineffective if you try to be. Focus instead on identifying and targeting a specific market. Doing so will allow you to use your efforts more efficiently, thereby producing better end results.
Before you spend any money on acquiring customers, you must first determine who your target customers are. This ensures that your methods of acquisition are effective and that you’re reaching the right audience.
Defining your buyer personas and their needs and pain points will help you to eliminate any wasteful or ineffective marketing tactics. It will also allow you to see which strategies work best for each of your buyers.
If your business is targeting Gen Z, then creating videos as part of your content marketing strategy is a great idea. This is because 77% of teens and young adults ages 15-25 are on YouTube. By creating videos that are targeted toward your target market, you can reach a large number of potential customers.
What is the best way to acquire new customers? Well, it depends on your business and the resources you have. Once you figure out what works best, you can craft a marketing strategy that gets you the best results.
4. Diversify Your Approach
What if we took a cue from nature and cross-pollinated our ideas? Bees spread pollen between a variety of plants, bringing about variations of species that better withstand time and nature. We, too, can cross-pollinate our ideas to create new and innovative solutions.
Marketers are a lot like these busy little bees.
When you use a variety of acquisition methods, you’re more likely to reach new audiences and generate new leads.
When you balance your lead generation methods, you minimize your risk of losing all of your money. When one source fails, you can shift funds to another, more lucrative one. That way, you can safeguard your investment and still bring in new sales.
The basic client acquisition definition is the process of acquiring new clients or customers for a business. With the right customer acquisition strategy, you can effectively target the customers you want and cut down on costs.