Customer acquisition: A complete guide for 2022

Most marketers think customer acquisition is all about bringing in more business. While this is crucial, it goes deeper than that. This guide covers the ins and outs of customer acquisition and how you can implement it into your 2022 marketing campaigns.

What is customer acquisition?

Customer acquisition overlaps with marketing, and it’s not entirely wrong to use the terms interchangeably.

However, in business circles, customer acquisition is used when discussing the overall picture of bringing in leads, which includes a sales funnel and metrics for gauging customer responsiveness. In short, marketing is about generating awareness through ads and social media. Customer acquisition covers that but also includes the customer nurturing process that comes after. This involves continued customer outreach and getting them to commit to certain actions, such as upvoting your post, subscribing to your newsletter, and clicking your call-to-action link.

A look at a customer acquisition strategy

Here’s a customer acquisition strategy with a multi-tier sales funnel process.

Stage 1: Awareness

Awareness is the initial outreach that includes inbound and outbound marketing. Here, complete strangers learn about your brand for the first time. Methods include targeted ads, in-person networking, or creating SEO-optimized content to get discovered for industry-related search terms. Stage one is about getting the customer to come to you.

Stage 2: Interest

By stage two, the prospect has visited your website. This is where they learn about your product or service. The potential customer now knows you exist.
The key is to get them interested so your brand doesn’t fade from their memory. To do this, your prospects must take action via:

• Signing up for an email newsletter
• Using the site’s chat page or contact page
• Signing up for a free trial, white paper, or webinar

Stage 3: Decision

By this stage, the customer expressed interest in your brand. Perhaps they continue to open your email newsletters and are an active participant in your free trial. The final stage is where you get the customer to make the purchase or sign up for a membership by:

• Generating a strong call-to-action through your blogs or newsletters to get customers to click the link and finalize the purchase. Use command words (e.g. act now, sign up today) to elicit action.
• Providing special discounts or promo codes to further promote action.
• Sending email reminders with urgent messaging using the fear-of-missing-out (FOMO) strategy. An example is a widget showing the number of remaining products or days before the offer expires.

This is a general concept of the varying client acquisition stages. Some sales funnels are far more comprehensive with 10, 15, or more stages. Begin with three or four stages and add more when needed as you build your customer base.

How to calculate customer acquisition cost

Customer acquisition isn’t cheap. While estimates vary, some reports have cited that it costs up to seven times more to acquire a new customer.

To calculate customer acquisition cost, determine your total marketing cost in a given time period like 30 or 90 days. Divide this figure by the total number of new customers that have gone through the entire sales funnel process in that same time period.

Whatever figure you come up with, is it in line with your budget? Marketing costs for small to medium-size businesses can vary considerably, from 1% to as high as 50% of a company’s overhead spending.

Establish from the get-go what your budget ceiling will be for marketing and recruitment and stick to it.

How to reduce acquisition cost

Carefully examine your metrics and perform A/B split testing early on to determine what yields a higher rate of customer actions. A/B split testing is simply running two campaigns at once and seeing which performs better.

For example, if the first stage of the sales funnel includes paid ads, determine which keywords are generating higher clicks per impression.

For the later stages, experiment with different call-to-actions and evaluate which leads to a higher click through rate. The importance of split-testing can’t be overstated, and it’s an ongoing process.

As a general rule, startups that project a profit margin between 10% and 12% should keep their marketing costs to 7% to 8%. Using this as reference, scale your spending up or down depending on projected net profit.

Take your customer acquisition to the next level

With the right strategy, small businesses and startups can find even footing against bigger competitors. However, you need a sound strategy, which is difficult to develop alone.

With the help of Lytics, you can effortlessly segment your data and metrics. Contact us today and we’ll help take your customer acquisition strategies to the next level.