<h2>What is customer acquisition?&nbsp;&nbsp;</h2>Customer acquisition is the process of finding new customers and getting them to buy your products or service. Whether you’re a small start-up or a huge enterprise business, you will need a customer acquisition strategy to attract leads and convert them into paying customers.&nbsp;&nbsp;Customer acquisition is also sometimes known as client acquisition. &nbsp;<h2>Why is customer acquisition important?&nbsp;</h2>Even if you have a loyal customer base, you need to acquire new customers if you want your company to grow. Important for businesses of any age or size, customer acquisition allows you to make money, pay your employees and hire new ones, and show any investors that your business is a healthy investment.&nbsp;&nbsp;<h2>What is the purpose of customer acquisition?&nbsp;</h2>Customer acquisition is all about getting prospective customers to take action. Your marketing makes people aware of your brand, and acquisition is what happens after they’ve noticed you and taken that next step. That could be clicking an email, picking up the phone or entering your brick-and-mortar store.&nbsp;&nbsp;Marketing drives recognition, and acquisition drives revenue. &nbsp;<h2>The acquisition channels&nbsp;</h2>A customer acquisition channel is anywhere your customers see your brand for the first time. It could be on social platforms such as Instagram or Facebook, in the search results, or offline in a print ad or an event.&nbsp;&nbsp;Whichever you choose, your acquisition channels should reflect where your target audience spend their time. For example, if you’re targeting an audience in their 20s, you’d probably put your money into TikTok or Instagram, and steer clear of Facebook or print advertising.&nbsp;&nbsp;&nbsp;Here are the most commonly used methods of growing a business by acquiring new customers.&nbsp;<h3>Organic search marketing</h3>Chances are, a big proportion of your audience will have found your site through organic search. This means they will have searched for something related to your business on a search engine and found your business as a result. An SEO (search engine optimisation) expert can help optimise your website and give you advice on how to rank more often, and higher up for search terms relevant to your business. If you don’t have the resource to hire an extra pair of hands, there are some things you can do to drive more traffic to your website, including:&nbsp;&nbsp;<h3>Content marketing&nbsp;&nbsp;</h3>The purpose of content marketing is to create website content that you know will be useful, educational or entertaining for your audience. From guides and case studies to videos and webinars, there’s so much you can do to attract your audience to your website, and all can serve different purposes. A case study with one of your customers will help build trust and help drive enquiries, while a how-to guide on your product can boost brand awareness with customers who have already started their journey with you.&nbsp;<h3>Off-page SEO&nbsp;</h3>You don’t need to limit your content to your own website. Getting your brand mentioned on other sites is a great way to improve your SEO and drive traffic to your business. Do some research and find out which websites your audience visits on a regular basis and see if you can write a guest blog post there.&nbsp;&nbsp;<h3>PR&nbsp;</h3>Don’t underestimate the value of people talking about your brand. Get involved in everything from events to interviews, as long as they’re relevant to your brand and audience. Any time you release a new product, reach an important milestone or start a new partnership, put together a press release and push it out to relevant publications.&nbsp;&nbsp;<h3>Paid advertising / Paid search&nbsp;</h3>One of the most popular methods of acquiring new customers is through paid search advertising, also known as pay-per-click, or PPC. You’re probably familiar with these ads, appearing across Facebook, Google and other websites - Facebook ads and Google ads being the biggest providers for paid traffic.&nbsp;&nbsp;

Most paid advertising platforms charge users for impressions (how many times people see the ads) using a metric called CPMs (the cost per one thousand impressions). Users can choose exactly who their ads target, based on anything from demographics to their interests.&nbsp;&nbsp;By collecting reviews through an independent review platform trusted by Google, such as Feefo, you can be eligible for <a href="https://www.feefo.com/en/business/resources/blog/your-complete-guide-google-seller-ratings" target="_self">seller ratings</a> on paid ads. This means a star rating can appear next to your ad, making it stand out, and building instant trust with searchers.&nbsp;<h3>Advantages of paid advertising&nbsp;&nbsp;</h3><ul><li>These platforms usually give you the tools to optimise your ads and get the most from your budget, taking out the guesswork and giving you full visibility of what’s working, and what’s not hitting the mark</li></ul><ul><li>Paying for traffic can be a quick way to scale your business. With the tools to switch up your strategy in an instant, you can get results - and fast&nbsp;</li><li>Paid advertising is a guaranteed way of getting your brand in front of the people you want to see it, targeting customers interests, exact locations and behaviours&nbsp;</li></ul><h3>Disadvantages of paid advertising&nbsp;</h3><ul><li>Running ads can get expensive, with platforms like Facebook increasing the cost year after year. To offset the cost, you may need to make other parts of your marketing work harder</li><li>The technicalities of running paid ads can be daunting without much experience. It’s something that you can learn, but it will take some time and patience</li></ul><ul><li>You’ll need a lot of creative assets to make paid ads work for you. If you’re low on design resource, it might not be the best option for your business&nbsp;</li></ul><h3>Organic social media&nbsp;</h3>Organic social media is an easy, free way of communicating with a huge potential audience, making it great for customer acquisition and general brand awareness. There are <a href="https://www.smartinsights.com/social-media-marketing/social-media-strategy/new-global-social-media-research/" target="_self">4.70 billion social media users</a> out there, each with an <a href="https://backlinko.com/social-media-users" target="_self">average of 6.6 accounts each</a>. But with so many platforms to choose from, which one do you focus on?&nbsp;&nbsp;Here’s what to consider:&nbsp;&nbsp;<ul><li>Where is your audience active? Facebook is the most used platform, but if your audience isn’t there, then why would you be?&nbsp;</li></ul><ul><li>Your brand personality and type of business should be factors when it comes to choosing your channels. If you’re a visual brand, try Instagram or DeviantArt, but if you’re B2B enterprise, LinkedIn would probably be your first port of call. However, nothing is off-limits. If you think you have something to offer on a platform, trial and error could help you fine-tune your strategy&nbsp;</li><li>Look at what your competitors are doing across their platforms. Find out what’s working, and how their audience is engaging. Don’t imitate what they’re doing, but use your findings to make an informed decision</li><li>Keep in mind your available resources. If you have limited time or staff, you’ll need to also put a limit to what and where you’re posting. Social media can be time-consuming</li></ul>&nbsp;Building an audience takes time, so you’re unlikely to see results immediately, but social media allows your brand’s personality to take centre stage so you can communicate directly with your customers in the exact voice you want to use. It’s also an effective way to share all the great content you’re producing as part of your customer acquisition strategy. Visual content, such as video, works well across social media platforms, but you can also share new products, promotions, reviews, blogs - anything that you think your customers will find interesting.&nbsp;&nbsp;<h3>Paid social media&nbsp;</h3>Paid social media is a great way of getting content in front of an audience without having to build up a huge network of followers first. Here’s a quick summary of some of the most commonly used platforms when it comes to running paid advertisements.&nbsp;&nbsp;<h3>Facebook&nbsp;&nbsp;</h3>Facebook boasts <a href="https://blog.hunchads.com/the-ultimate-guide-to-paid-social-advertising" target="_self">over 2.5 billion monthly users</a>, and is the perfect platform for both prospecting and retargeting with ads. Facebook does come with its disadvantages, though. The huge number of users means that often businesses get lost in the noise, and it can be hard to get seen or heard.&nbsp;&nbsp;

<h3>YouTube&nbsp;</h3>The second largest search engine worldwide, YouTube is a great place to advertise so long as you can keep the audience engaged. Video content is a lot more ‘clickable’ than other formats, and YouTube can be great for your SEO, allowing you to add backlinks to your profile. Do make sure that you read up on the restrictions, as YouTube could disable your account if you’re found breaking them.&nbsp;&nbsp;&nbsp;&nbsp;<h3>Instagram&nbsp;&nbsp;&nbsp;</h3>Ads on Instagram tend to be engaging and direct, and with the addition of Stories and Reels, there’s lots you can do with a little creativity. Better still, Instagram ads can be shoppable, which means businesses can direct users straight to the product they’re showcasing. It’s worth noting that calls-to-action can be hard to spot on Instagram ads, and encouraging users to leave the platform and visit your store can be a challenge.&nbsp;&nbsp;

<h3>Twitter&nbsp;</h3>Twitter allows you to segment audiences with keywords and common interests - you can even create your own custom CRM lists to get more accurate targeting. This, however, does come at a cost. Twitter can get very expensive, so if you want to use paid ads there, make sure you’ve planned out your budgets and resources carefully.&nbsp;&nbsp;<h3>Email&nbsp;</h3>Email is still one of the strongest marketing channels there is. Not only does it boast <a href="https://www.lyfemarketing.com/blog/email-marketing-roi/" target="_self">return on investment (ROI) of 122%</a> (that’s four times higher than any other digital marketing channel), it’s also one of the best ways to learn more about your target audience without having to ask too many questions. It’s a simple way to connect with your audience, too. Whether sending a simple happy birthday email or a link to a member-only promotion, email marketing can make sure you’re always appearing in your customer’s inbox.&nbsp;&nbsp;Segmenting your data is easy, allowing you to tailor your content and track how each audience interacts with your emails. Email can help nurture people who have only just become aware of your brand as well as loyal customers, so it plays a key role in customer acquisition as well as retention.&nbsp;&nbsp;Remember to include social proof in your emails to help build trust with your customers and boost conversions. Feefo’s Review Score Badge automatically updates as you get more feedback. &nbsp;&nbsp;<h2>The customer acquisition funnel&nbsp;</h2>The customer acquisition funnel is a visual representation of the buying process. Consumers start their journey with your business at the top, and travel down the funnel as they turn into customers.&nbsp;<ul><li>Awareness&nbsp;</li><li>Consideration&nbsp;</li></ul><ul><li>Conversion&nbsp;</li></ul><ul><li>Retention &nbsp;</li></ul>As consumers move their way down the funnel, they:&nbsp;&nbsp;<ul><li>Get awareness of your brand</li><li>Consider your business as an option&nbsp;</li><li>Turn into a paying customer&nbsp;</li><li>Use your business again&nbsp;</li></ul>Customer acquisition relates to every stage of this funnel.&nbsp;&nbsp;<h2>How to create a customer acquisition strategy&nbsp;&nbsp;</h2><h3>Identify who your customers are / who you want them to be&nbsp;&nbsp;</h3>If you don’t have a clear idea of who your ideal customers are, ask yourself some questions. What are their demographics? What do they use your product or service for? What are their struggles? Answering these questions will give you a better idea of your customer base, and the traits and behaviours that define them.&nbsp;&nbsp;<h3>Define your business goals&nbsp;</h3>Setting an end result will help guide your strategy and make sure you stay on track, whether that is increasing customer lifetime value or your monthly recurring revenue.&nbsp;<h3>Choose your channels&nbsp;</h3>With your ideal customers identified, you can start to think about which channel will be most effective. We’ve already gone through some of the most popular channels, but you need to discover what works best for your business. Your own research should help you get a better understanding of where your customers are most active.&nbsp;&nbsp;<h3>Develop a strategy for each channel&nbsp;</h3>Not all content works on every platform. You won’t be able to post the same content on TikTok as you would on LinkedIn, for example. Take some time to discover which formats work where, including some competitor analysis.&nbsp;&nbsp;<h3>Measure your strategy&nbsp;</h3>Establish which metrics you’re going to use to measure success. The most common metrics to measure customer acquisition are customer acquisition costs (CAC), customer lifestyle value (LTV) and churn rate. We’ll go more into detail in the next section.&nbsp;&nbsp;<h2>&nbsp;How to measure customer acquisition&nbsp;</h2>Now you know how to put together a customer acquisition strategy, you need to be able to measure how effective it is. Measuring your customer acquisition cost is easier than you might think. Let’s look at how to calculate your customer acquisition cost, what ‘good’ looks like, and how you can reduce it.&nbsp;&nbsp;How to calculate customer acquisition cost (CAC)&nbsp;The formula for working out CAC is simple. Simply divide the cost of sales and marketing with the number of new customers acquired.&nbsp;&nbsp;

Of course, you need to decide what period of time you’re measuring (monthly, quarterly or annually) and you need to know the cost of your sales and marketing.&nbsp;To work out the cost of your sales and marketing, you should include the following:&nbsp;&nbsp;<ul><li>Content promotion - how much you spend on advertising (print and digital), publishing and PR</li></ul><ul><li>Employee salaries - including bonuses and commissions&nbsp;</li><li>Technical costs - how much your teams spend on the software that allows them to do their jobs</li><li>External costs - such as outside designers and developers</li></ul>These are only a few examples - you may have more expenses to consider. Get your team together and make a list of every cost you can think of.&nbsp;&nbsp;<h2>What’s a good customer acquisition cost?&nbsp;&nbsp;</h2>While you should always be working to keep your customer acquisition cost down, you need to know what ‘good’ looks like. A £50 customer acquisition could be expensive to an online boutique where the average order value is £20, but to a software company whose subscriptions start at £99 a month, it’s a much more encouraging figure.&nbsp;&nbsp;Customer loyalty and average spend both play a part in determining how good your acquisition is. That’s why it’s best to calculate your customer lifetime value (CLV) and work out your CLV:CAC ratio. This will show you if you’re spending too much, or not enough, on your marketing.&nbsp;&nbsp;Ideally, your CLV:CAC ratio should be 3:1. If it’s 1:1, you’re spending too much on your sales and marketing, but if it’s higher than 3:1, you might not be spending enough.&nbsp;<h2>Reducing your customer acquisition cost&nbsp;</h2>If you’re spending too much time on your sales and marketing, there are lots of things you can do to reduce your outgoings.&nbsp;&nbsp;Helping your team become more efficient is one way of reducing your customer acquisition cost. AI-powered tools like our Customer Sentiment Insights technology analyses your reviews for you, highlighting any weak points as well as your biggest strengths. This saves your support and marketing team’s precious time, as they can quickly see which parts of your service and products they should promote, and which they need to improve and fix.&nbsp;&nbsp;The best way to use your reviews to reduce your customer acquisition cost is to create a consistent customer journey across all channels. Ratings and reviews build trust throughout the customer acquisition process, from when a consumer first discovers your brand, right up until they click the ‘buy’ button. &nbsp;<h2>Customer acquisition vs customer retention&nbsp;</h2>We know how important it is to attract new customers, but you can’t forget about your existing ones. So, which should you focus on - customer acquisition or retention?&nbsp;&nbsp;It all depends on your strategy. If your business is taking a new direction in a way that will impact your target audience, you might want to focus on acquisition, but generally speaking you’ll probably want to strike a balance between the two.&nbsp;&nbsp;<h2>Why customer retention is important&nbsp;</h2>Depending on how you spend your budget, new customers can be more expensive to acquire than retaining existing ones, and, depending on how you attract them, may not be as profitable. For example, if you attract lots of new customers by using a promotion, but those customers never use your business again, your customer acquisition could be working at a loss to your business.&nbsp;&nbsp;By not giving enough attention to customer retention, your customer lifetime value could be too low. Plus, focusing on nurturing existing relationships with your existing customers can help attract new ones. Whether you’re concentrating on improving your customer experience or growing your customer service team, you can demonstrate to consumers that you care about their opinions.&nbsp;&nbsp;<h2>Start using reviews in your customer acquisition strategy&nbsp;&nbsp;&nbsp;</h2>You should now have the knowledge and tools you need to start building or improving your customer acquisition strategy. For more information about the role customer feedback can play in creating a great strategy, get in touch with one of our experts today.&nbsp;&nbsp;&nbsp;

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