Have you ever heard someone claim that they have enough business and don’t need to acquire new customers? It’s like saying I don’t need oxygen, I breathed yesterday. Really?
Customer acquisition has become more important today than ever before. Sadly, most brands don’t enjoy the same customer loyalty they had even 5 or 10 years ago. Back then, entrepreneurs could bank on a loyal customer base to keep them in the black. However, the new reality of overcrowded markets and endless choices have lowered customer loyalty to about 9% in the USA.
In addition, even the most loyal customers with the best intentions move away, change habits, or want to try something new.
As a business owner, you have little control over most of these departure reasons. Ensuring a healthy business requires an ongoing inflow of new customers. Here are some tips to ensure you do it the best way.
Before choosing an acquisition strategy, you must determine the amount you’re willing to spend to get new customers.
It sounds simple enough, but if your customer acquisition method costs more than the value the new customer adds to your business, it’s the wrong solution. Using the simple formula below, calculate the Customer Acquisition Cost.
Customer Acquisition Cost formula
Let’s say Maria owns a dry cleaning business. She wants to acquire new customers. So, she puts an ad in a coupon mailer. She pays $30 for one month of weekly coupons, and she acquires 15 new customers. Her Customer Acquisition Cost, or CAC is $2 per customer.
Now, Maria must calculate the estimated lifetime value of the new customer. She can do this using the equation below.
Customer Lifetime Value formula
Once Maria has calculated the Customer Lifetime Value, she can compare it to the cost of acquisition. The goal is to achieve a high lifetime value to Customer Acquisition Cost ratio.
New Strategies for Customer Acquisition
Your success acquiring new customers largely depends on your ability to go with the flow, use updated technology, and open your mind. What worked 10 or even 5 years ago may not work now, or must be tweaked in order to work optimally.
Technology is moving ahead with or without you. Instead of fighting the changes, use the latest technology to your advantage. Consider these things when you are brainstorming new strategies:
Advertise where your target demographic is
On average, users spend 69% of their media time on their phones, but where? What social media channels does your target demographic prefer? If you are targeting Millennials and Gen Z you are more likely to reach them on YouTube, Snapchat & Instagram. If you are targeting Generation X and Baby Boomers, your message should go out on Facebook.
Send your message on the right platform
This year social media reached an astounding 3.48 billion users. Here is a breakdown of which channels users of different ages prefer:
- Prospects age 18 - 30 prefer YouTube, Snapchat & Instagram
- Prospects age 30+ can be found on Facebook & Youtube
- B2B sales leads most likely frequent Twitter & Linkedin
- B2C customers haunt Twitter, Instagram, Snapchat & Reddit
- Executives prefer Twitter & Linkedin
- Prospects seeking visually stimulating products may search on Snapchat or Pinterest
Mobile Marketing with Deals and Discounts
Some customers buy the same products just because they’ve always bought them. Give them a reason to try something different. A study by Inmar revealed that receiving a coupon changes buying behaviors for 83% of consumers. This gives consumers a reason to try something new. Consider adding a deal on a promotional offer platform.
Reward Customers for being Brand Advocates
You cannot market your products as well as your users can. Customers, thrilled with an excellent product, are the most believable, transparent product advocates you could wish for. They are an unbelievably persuasive force and influence on the buying habits of their family and friends.
What’s even better is that they love to share. Studies show that 91% of Americans would share an exclusive offer with their friends and family. So, why not make it easy on them? Acquire the tools that make sharing about your business easy enough that a customer won’t mind taking the time to do it.
Make it easy for customers to share their happiness with your product
Go one step further and reward them for it. Give them a reason to share their happiness in your products.
Customer acquisition has always been important, but with lowered levels of brand loyalty, it is a critical aspect of your overall business plan. Unless you enjoy unlimited staff and budget resources, you’ll need to carefully examine what tools and products fit your particular situation.
Understanding who your customers are, where they are, and who they share with will you focus your marketing efforts in the right direction.
If you need help acquiring customers, use our new savings app Buxbo to target the right customers with your deals and discounts at a sensible Customer Acquisition Cost.