What is customer acquisition

What is Customer Acquisition?

Customer Acquisition is the attraction and retention of new customers to grow your business.

So, how do we do it and can it be done better? Are you effectively using the full resources of your business to drive B2B customer acquisition or is new customer acquisition something you leave solely to a new business department? Is your process measurable and repeatable without feeling inflexible or robotic?

Many businesses these days utilise Customer Relationship Management (CRM) platforms to capture data on successful (and not-so successful) conversions. Once analysed, this data should help them learn what works and refine their customer acquisition.

But the data you capture is only as good as the strategy you employ. All parts of a business can contribute to increase customer acquisition – and as a result we need to approach it strategically. Everyone within a business, whether you employ three people, 300 or 3,000, needs to understand not only the importance of customer acquisitions, but their own role in that process.

Before the funnel there was…the funnel

Customer acquisition is, in sales terms, typically described as ‘top of the funnel’. It’s seen as the first step into the sales funnel that describes how a business engages with a customer to convert their interest into a sale or sign-up.

However, customer acquisition has its funnel:

  • Awareness
  • Consideration
  • Conversion

How our teams, our creative and our channels engage with prospective customers at these early stages is crucial to successful customer acquisition.

Who are you?

Awareness is the first strand of customer acquisition. If people are not aware of your brand or business, there is no chance they will become a customer.

Drawing attention can be done in a number of ways:

  • Marketing – get your brand seen exactly where your customers are. From paid social to print ads, broadcast media to blogs, emailers to webinars and more, marketing your business secures eyeballs and is the most direct way to raise awareness. It’s worth noting that tactics like emailers will require consent under GDPR – find out more here.
  • Creative assets – from branding to ad designs, the right creative is great at capturing attention wherever it is placed. Imagery and, increasingly, video offers a great way to get key messages and benefits across to prospects in a short window of time
  • PR – tell your stories. PR is one of the most cost-effective and trusted ways to raise awareness. Whatever the size of your business, there is a PR solution, from employing an in-house team to working with an agency or freelance professionals. An experienced head can help make your stories impactful and get them in front of the right people to secure coverage.
  • Sales incentives – These are an impactful way to attract attention. But it’s about more than simply slashing costs. Using data-driven strategies, you can create trackable sales incentives that measurably increase awareness and support customer acquisition.

Target relevant outlets and audiences with attention-grabbing content that quickly and details what you offer and why it is beneficial. Striking the right tone will get you noticed and begin to build awareness.

The attention question

For outbound awareness activity, you also need to bear in mind the attention span of your audience. This can differ across audiences, but as a rule of thumb recent research by media platform Teads and Lumen Research found that a single exposure to awareness content needed to command attention for 100 milliseconds to 1 second, activity further down the funnel needed to elicit linger dwell times:

  • Familiarity: 1s+
  • Favourability: 3s+
  • Consideration: 9s+
  • Purchase intent: 8s+

Find your tribe

Customer acquisition of course is not only reliant on attracting inbound engagement. Actively seeking potential customers to target is highly important.

Your initial awareness activity can, in part, help to gather potential prospects to reach out to – through thought leadership and data assets requiring data capture – – for example, downloadable reports.

If you can research your target audience you can, even under GDPR, cold-call, however, this is not always the most effective way to acquire new customers.

When considering purchasing contact lists of potential customers, take care. Not only is the suitability of these leads likely to vary wildly, but you need to seek your own specific permission to contact them – and record it correctly – to comply with GDPR. Your first contact with a cold lead must give them a clear opportunity to opt into communications with you or opt-out – and getting that wrong can be costly!

If you have a CRM platform, you can often import your prospects and streamline the qualification process – speeding up how you sort true potential customers from those who do not want or need what you offer.

Working with your marketing, social and PR teams is also essential to outbound customer acquisition. They will be able to flag individuals who engage with content but may not follow-up with further actions or contact, or those who have posted queries in either direct messages or comment sections. They can also offer you sector insight, helping you shape your offer based on customer behaviour, the current news agenda and how your brand is perceived and engaged with on social.

All this contextual data will give you the ability to refine your communications and outreach and make your customer acquisition strategy more successful.

Importantly however, when using these tactics to support customer acquisition you need to ensure that they are focused on driving action. Awareness alone is not an efficient way to drive behaviour. Crafting messaging and imagery with calls to action (CTAs) that guide and nudge prospects to the next stage effectively requires planning and teamwork.

Why you?

Once people are aware of your business, you need to answer the why question. Maybe you are the market leader, perhaps you offer the best value, and possibly (though less likely) you are the only business offering a particular product or service.

What matters is getting these messages noticed and understood in as short a time as possible – an instant if you can.

Consideration is a research phase that relies heavily on your website, blogs and initial interactions with customers through social media messages, emails or calls. But being able to serve potential customers the detail – and solutions – they need in short, snappy, engaging ways will keep them on your pages for longer and increase your chances of bringing them into the fold.

You don’t get a second chance to make a first impression, however, so it’s important to ensure that we quality-check all the key touch points for someone in the consideration phase:

  • Is our branding consistent?
  • Is our tone of voice appropriate?
  • Is the customer journey on our website simple and efficient?
  • Is the frequency and relevance of our marketing communications correct?
  • Are we effectively presenting our worth to potential customers?

If a prospect interacts with one or more of these touchpoints and finds something ‘off’ or that raises a red flag, we will most likely lose that acquisition opportunity. Get it right and prospects will be ready for the conversion phase, when your sales team will begin drilling down into how your business can help new customers meet their challenges and goals.

Making it happen

When customers are ready to pass on to the sales team, they are entering the buying phase. Building a relationship at this point is key. Offering products or services that quickly and comprehensively solve a prospect’s biggest pain points is crucial but, in the end, some things never change.

People buy from people. If your team approaches their work with honesty, integrity, kindness and enthusiasm and takes time to listen to the challenges a prospect wants to address before offering a solution, they are more likely to successfully bring a new customer on board.

Whatever your business, B2C or B2B, what customers need from you, how well you can provide that and how good they feel throughout the process will ultimately determine whether a prospect becomes a customer.

Data-driven customer acquisition

Love2shop Business employs an expert team of engagement and acquisition professionals to help you build an efficient, reliable customer acquisition strategy.

Using our suite of incentivisation products, our innovative engagement platform and decades of experience, Love2shop Business can support your acquisition goals and your customer acquisition goals. Visit business.love2shop.co.uk to learn more.

What is customer acquisition

Customer Acquisition Strategy

For any business to succeed, it’s important to have a good level of acquisition from your customers. With the right steps in place, employers will be able to boost all kinds of marketing schemes to their full potential.

So, what exactly is ‘customer acquisition’? Well, in simple terms, it’s all about bringing in new customers – and keeping them! This level of attraction and retention takes time to grow. But when it does, customers remain loyal to your brand for life.

Let’s take a look at what a customer acquisition strategy is, different examples of them, and how to choose ones that work for your business.

What is a customer acquisition strategy?

A customer acquisition strategy is a method that involves persuading people to invest in your business. This might include buying your products, using your services, or choosing your brand name over competitors.

Customer acquisition and retention strategies present a solid process for attracting the right kind of people to your business. You’ll probably have organic customers visiting your site. But it’s the returning customers who’ll help develop and grow your business.

That’s why it’s important to invest in the best customer acquisition strategy for you. In the end, it’ll help establish repeat purchases, maintain customer loyalty, and grow steady revenue over time.

What marketing tools are used for customer acquisition strategies?

When it comes to consumer retention, there are numerous marketing tools available. It all depends on which ones work well with your customer acquisition strategy. Some of the most common marketing tools include:

  • Organic search: This relates to using search engine optimisation (SEO) to create content that attracts a specific or high audience number.
  • Paid search: This uses revenue-based methods to promote adverts or brand awareness on search engines.
  • Organic social media: This involves creating a digital brand identity on social media platforms without spending any money.
  • Paid social media: This uses financial-based methods to attain new customers or build brand awareness.
  • Email: This method shares or promotes business-related information directly to customers.
  • Referrals: This involves customers being given rewards (like incentives or gift cards) after introducing new people to the business.
  • Events: This method utilises seminars, conferences, and trade shows to present a product, service, or overall business.
  • Traditional advertisement: This involves using media platforms (like TV, radio, or print) to advertise a business.

What are examples of different types of customer acquisition strategies?

When it comes to using customer acquisition strategies, you should choose ones that work for you. This could be a singular one; or a multitude of them. Ultimately, it’s all about utilising the ones that work best for your business.

Let’s look at customer acquisition strategies examples to use in your business:

Search engine optimisation (marketing tool: organic search)

Search engine optimisation (SEO) is all about finding ways to place your brand name at the top of search engines. SEO methods help customers search for a product or service online and decide which one to choose between relevant competitors.

To rank at the top of searches, businesses need to optimise their website. This is done by using SEO-related methods on their webpages. Keywords, headings, alt-text, and even SERPs encourage customers to click on their content – making it a strong marketing tool to promote customer acquisition.

Content marketing (marketing tool: organic search)

For most businesses, customer marketing is often used for its versatility. Whether you’re creating a new campaign or revamping an ongoing one, content marketing helps capture your customers’ attention – converting their views into pounds.

As mentioned, the type of content you create will always vary. That’s because it depends on what type of message you want to portray to acquire customers. Whether it’s a blog or a short video, each piece of content you create or promote should be perfectly relatable to your specific audience.

Blogging (marketing tool: organic search)

Many businesses will have a dedicated blog page on their website, filled with all kinds of written content. From ‘how-to’ guides to opinion pieces, blogs allow employers to portray their take on issues relating to their industry.

Blogs allow employers to develop a level of authority with their customers. They’ll read about a topic relevant to them and respect the legitimacy of the business. Most blog sites even let customers write comments or reviews – creating an open and trusting relationship between them.

Social media marketing (marketing tool: organic social media/ paid social media)

This strategy involves using social media platforms to direct customers towards a business. Generally, two ways to do this are through paid channels or going completely organic.

Social media marketing is a great way to advertise your brand name or share content from other digital platforms. And if it’s organic, you won’t need to invest a lot of money.

With social media marketing, the more you post, the higher your chances of attracting customers. Let’s all pray for that ‘viral’ moment which can really help boost your brand name.

Video marketing (marketing tool: paid search/ organic social media/ paid social media)

From TikTok to YouTube shorts, there’s no denying that video-based content is prominent in today’s world. With easy access to cheaper yet quality filming equipment, video production  has quickly become a marketing norm.

Despite that, videos still need to be relatable and accessible. As shorter videos are consumed more, you need to portray your message as efficiently as you can in those 10 seconds.

For longer videos, you may need to think about wider production aspects. Lighting, scriptwriting, editing – when these are done right, you’ll soon be able to manifest an invested and happy audience.

Email retargeting (marketing tool: email)

Emailing might seem like a long-winded (or even outdated) marketing scheme to some. But, don’t underestimate its true potential. Emailing is especially useful when it comes to tracking customer listings, interactions, and behaviour.

For example, new customers can receive emails on information about products your business sells. This will then optimise their chances of making future purchases with you. Or you can use emails to send birthday vouchers – which again, makes them buy more!

Emails can also help highlight problems, particularly when customers unsubscribe from mailing lists. Here, businesses should be thinking about ongoing issues and finding ways to amend their marketing strategy.

Sponsored content (marketing tool: paid search/ paid social media/ traditional advertising)

This strategy is all about linking paid adverts (on SERPs) to content posts (on social media platforms). In simple terms, businesses use ‘famous’ people to help advertise their products.

Sponsored ads generally have someone on board willing to help advertise your business. They’ll be able to share your brand name with their audience – helping you generate more leads and conversions.

It doesn’t really matter what type of social media platform is used, so long as the advert message is presented well. Businesses will often use ad campaigns, like sponsored search results, paid blog posts, and product mentions (or ‘shout-outs’).

Customer ambassadors (marketing tool: referrals)

Customer ambassadors are loyal consumers who offer to help promote your products or services. They can choose to voluntarily do this, or ask for a type of fee in return (i.e., like payment, creative freedom, etc.).

Employers gain free advertising, as the ambassadors help raise awareness for your brand. This saves you time and money, as they’ll do all the hard work for you!

Ambassadors may write an in-depth blog about your product, or speak about it on their social media platforms. It’s always best to reward ambassadors for their assistance. A couple of gift cards or even some free merchandise is never received badly.

Gated content (marketing tool: all)

Gated content is a marketing term used for things like guides, templates, eBooks, etc. Whilst they may not be the most cutting-edge or exciting content, they’re often crucial in certain situations.

The term ‘gated’ means only certain customers, who have given permission, can access the content. For example, they may have provided personal information, like an email address.

Gated content uses all types of strategies – from SEO to content marketing tools. The main element that makes it work is being unsearchable online. Only customers who show a good level of investment will be able to access the goods – boosting business retention and loyalty.

Product pricing (marketing tool: all)

Product pricing is a super versatile customer acquisition strategy. It attracts customers based on your position in a shared marketplace. If your numbers are attractive enough, customers will flock towards you instead of your competitors.

But, it’s not just about the price of your products or services. Customer acquisition is built from offering incentives, discounts, and promotional pricing. For example, a ‘buy one, get one free’ strategy can help grow retention and revenue.

It’s always best to utilise strategies that work for your business. This will help you understand your target audience better and improve your overall marketing procedures.

Get further help on customer acquisition strategies with love2shop

Whatever your business is, you can’t function without the steady influx of customers. And this doesn’t just mean gaining new ones; it also means investing in your loyal ones.

A great way to strengthen your customer acquisition strategies is through using gift cards and vouchers. At Love2shop, we offer a variety of rewards guaranteed to help boost your retention rates.

Whether you’re enticing new leads or rewarding loyal customers, Love2Shop has the perfect gift card for you.

Customer Acquisation Cost

What is Customer Acquisition Cost?

Every business should aim to have a steady number of loyal, content, and happy customers. But whether you’re caring for current ones or attracting new people, employers need to plan their ‘customer acquisition cost’.

This term is often chucked about within the marketing realm; but what does it actually mean? Well, customer acquisition is all about retaining loyal consumers and getting them to make future purchases with you. But, you may need to spend a few pounds to encourage and protect this relationship.

Let’s dive deeper into what a good customer acquisition cost looks like, why it’s important, and how to spend well without affecting your marketing budgets.

What is customer acquisition cost?

A customer acquisition cost (CAC) is a measure used to determine how much a business needs to spend in order to gain a new customer. CAC marketing has fast become a popular procedure, as employers utilise this data to make business decisions.

Businesses will invest well when it comes to targeting a specific audience or even widening the doors a little. But without a proper plan or budget, you’ll soon run out of money.

That’s where CAC comes in.

Through simple maths, you’ll be able to see how much you spend on attracting a single customer. And determine whether it’s worth continuing this way or making changes for the better.

Why are customer acquisition costs important?

The cost for customer acquisition is considered as a vital part of any business marketing procedure. It allows you to spend sufficient time and resources on marketing campaigns which truly improve one’s consumer retention rates.

Once you’ve established solid methods for attracting and retaining customers, you’ll be able to figure out how to do it better – saving you time, money, and effort in the long run.

At this point, it’ll cost you less to retain your current customers, and even less to find new ones. So, it’s all about solidifying your relationship with your consumer base. But you need to invest time in understanding your average customer acquisition cost.

Are there different types of customer acquisition costs?

Yes, there are numerous types of customer acquisition costs you may come across. These vary from marketing campaigns to individual customer preferences. But remember, you should utilise ones that truly work best for your business.

Let’s take a look at different types of customer acquisition costs:

  • Initial CAC: This is the cost for attaining a customer for the first time.
  • Renewal CAC: This is the cost for retaining a customer. (This could be done once or repeatedly over a lifespan).
  • Reactivation CAC: This is the cost for regaining a customer who may have recently left or no longer chooses to interact with the business.
  • Market CAC: This is the cost for gaining customers in a specific sector, area, or country.
  • Customer CAC: This is the cost for attracting a specific kind of customer. (This might be based on their gender, age, or professional background, or even shopping interests).
  • Product CAC: This is the cost for gaining customers for a specific product or item that a business sells.
  • End users CAC: This is the cost for attracting customers based on how many the business’s licence allows.

How to calculate customer acquisition cost

There is a simple formula used when is comes to calculating customer acquisition cost:

  • CAC = (total cost of sales and marketing) / (number of customers acquired).

Employers need to add up all the money spent on attracting new customers. This may include processes on online platforms or through phone sales. After this, they need to divide it by the number of new customers gained in a specific period (i.e., like a business quarter or annual year).

For example, a start-up business spent £500 on social media marketing in a quarterly period. During this time, they gained 50 new customers. The business has spent £10 per customer as part of their CAC process. They will need to decide if they’re happy with this progress or want to increase their efforts for the better.

How to achieve a low customer acquisition cost

There are many ways things to consider when it comes to getting a good customer acquisition cost. You may need to spend a little more to reach a wider audience. Or make cuts in order to spend a little more wisely.

Whatever the process is, it’s always best to choose a method that suits your business budget and needs. And remember, you can always amend these numbers if and when needed.

Let’s take a look at ways you can achieve a low customer acquisition cost for your business:

Boost lead conversion rates

The first step employers should take is boosting your lead conversion rates. Conversion rates are all about finding ways to convince a potential customer (or lead) into an actual one who’s interacted with your business.

A popular software which helps track this well is Google Analytics (GA). This software helps identify how often customers interact with your website. For example, clicking on certain product pages or adding things to their cart.

GA also helps check whether people interact with your business through your web pages or on mobile devices. This will help you decide which to invest more money into. Whatever the statistics show, employers can utilise the numbers to successfully convert more potential leads into long-lasting customers.

Add value to your products

The next step employers should take is adding value to their products or services. Every business will have its own way of making themselves stand out from their competitors. But the real deal-clincher is giving them a reason to choose you over others.

For example, you can add value to your products using a customer retention strategy. Offer a £10 gift card or voucher for every transaction that adds up to £100 and more. Through strategies like this, value is added to your products – along with your brand-name.

Soon, customers will see the benefits of shopping with your business; some may even start recommending your brand to others. Whatever their positive comments are, be sure to utilise these new interactions to their fullest.

Introduce a CRM system

Customer relationship management or CRM is another great method used to keep on top of your acquisition rates. This procedure helps businesses track data from new customers, see how much their spending is, and even initiate a loyalty program for you.

You can even use CRM to manage things like emailing lists and marketing campaigns. Like, dealing with promotional campaigns or seasonal emails.

Whichever methods you use, your business will soon be on its way towards retaining customers for longer periods. Not only will it strengthen your consumer relations; it’ll also help establish better relationships with newer ones.

Think about your business future

When it comes to customer acquisition costs, you need to think about the overall picture for your business – and in particular, the future.

Set aside a budget for how much you’re able to spend on CAC. Base this on your individual capabilities – don’t copy what others are doing. Think about investing in both short and long-term projects.

It’s also best to think about tracking any ‘shares’ you’ve made on social media platforms. Interactions like this will outline how wide your brand-name has spread. And shed light on what audiences you may benefit from investing in.

Is customer lifetime value the same as customer acquisition cost?

No, customer lifetime value (CLV) isn’t the same as customer acquisition cost (CAC). However, they do often go hand-in-hand.

Customer lifetime value (CLV) is the number of repeat purchases one customer has made with your business. This relates to a particular period – from their first interaction, to their last.

Both CLV and CAC are equally crucial when it comes to a business’s overall efficiency, longevity, and profitability. There are several factors to consider when it comes to CLV. For example:

  • Retention rates: This is the number of loyal customers who make repeat purchases with your business. When you concentrate on CLV, you’ll be able to increase the number of buyers without having to acquire new customers.
  • Sales value: This is when you can increase the sale of individual items through add-ons or incentives. Upselling is a sure-fire way to attract new customers – keeping them satisfied and loyal to your business.
  • Purchase frequency: This is when you consider how many times customers have interacted or bought something from your business. You can send them promotional offers or even gift cards to encourage multiple sales and purchase frequency.

Get further advice on customer acquisition costs with Love2shop

Whatever your business is, you can’t function without a steady influx of customers. And this doesn’t just mean getting new ones, it also means investing in your most loyal consumers.

Tracking customer acquisition cost can easily be utilised through offering gift cards and vouchers. At Love2shop, we offer a variety of rewards guaranteed to help boost your customer retention rates.

Whether you’re enticing new leads or rewarding loyal customers, Love2shop has the perfect gift card for you.

How to attract new customers on the road out of lockdown

The mid-April period is going to be an exciting time for the public, and a time of opportunity for business.

With shops opening, we’re expecting a lot of competition for the UK’s disposable income, and for the public to be excited to go out and do the things they’ve missed out on since 2020. Whether you’re a brick-and-mortar location re-opening, or an online retailer, you have a dog in the fight.

Physical locations will be looking to make a strong comeback and online retailers, whether they were digital-first before lockdown or not, will be looking to protect their gains over the last 12 months. It’s a challenge, but it’s one very few companies in the UK can afford to shirk away from.

Lots of experts in the loyalty and acquisition world will tell you that you’re better off looking for long-term changes. And to an extent they’re right, but long-term changes take time to kick in.

If you’re just focused on making the most of the next few weeks and months, here’s what you can do.

Run a promotion

You can offer discounts, 2-for-1 deals, or attach a reward like a digital or plastic gift card to certain purchases – whatever works for your business. It’s simple, but as our clients will tell you, it works.

Hundreds of our customers use Love2shop rewards to promote their products and services, and we often recommend that they focus not on the gift card itself, but all the possibilities the gift card opens up.

With the one multi-retailer gift card, you can offer your customers gifts from Argos, Currys PC World, and even holidays. Focusing on the outcome, and the experience that your customers will have with their reward, does more to motivate individuals than focusing on the gift or its monetary value.

Even better, a promotion is also the starting point of launching into a loyalty scheme to keep your customers once you’ve won them. We’ll talk more about that in another blog soon.

Be shareable

Aside from their fitness goals updates and park walks, it’s been months since anyone had anything decent to share on social media. Across Facebook, Instagram and TikTok, the content well has been pumped dry. That gives your company an opportunity – be shareable.

What looks good on social media affects consumer behaviour, to the extent that almost one in ten people surveyed have admitted to making purchases with their social media presence in mind.

Not only will offering something shareable get customers to think about coming to your company over your competitors, they’ll do a bit of your marketing work for you by putting your products in front of their friends. And as we’ll point out below, word of mouth matters.

Team up with your peers

As restrictions ease one at a time there will, temporarily, be a slightly unequal situation. Depending on what kind of physical space is available, and which restrictions are affecting their business, some companies will have an advantage over others.

For instance, a pub with a beer garden is at an advantage over a pub without one, in the near term. Working with your peers could be a short-term solution to this imbalance.

Take stock of what’s around you, whether that’s digitally or physically, assess who could complement your business (and vice versa), and reach out to talk about some cross-promotions for the next few weeks and months.

Get a grip on your reputation

We talked recently about how important online reputation is. Consumers are in the habit of checking sites before spending their cash, and they trust what they see on review sites as if it came from their friends.

That means the state of your Trustpilot page, or another review site of your choice, will have a direct impact on whether customers spend money with you while we’re easing restrictions around the country.

You can use our guide here to clean up your Trustpilot page for any recent negative reviews, but it’s also worth asking any current customers for their reviews to make sure there’s recent, positive feedback for your next customer.

Over to you

Attracting customers is about more than just making the most of the next few weeks and months. There are long-term improvements that every company needs to invest in to find new business, but right now we’re focused on how the maximise the benefits of the immediate future.

Redesigning your website, renovating your shopfront, working on your SEO presence, upgrading your services and products – if you haven’t done them by now, there’s no time to get them up and running by mid-April. That doesn’t mean you can’t maximise what’s possible to do now, though.

If you have any questions about setting up a sales promotion to bring some more customers into your business, just get in touch. We’re always up for a chat.