In recent years, acquiring new customers has become increasingly expensive, costing as much as 25x more than retaining an existing customer. While customer acquisition can be costly, it is also necessary for any healthy business to continue growing. New customers eventually become repeat customers and brand promoters as their customer lifetime value (LTV) grows.
Read on to learn how to build an effective customer acquisition strategy:
Calculate Current Customer Acquisition Cost
Distilled down to its simplest form, the equation for customer acquisition cost (CAC) is as follows:
CAC= Costs Devoted to Acquiring New Customers/Number of New Customers
To develop a customer acquisition strategy, you first need an accurate picture of how much it costs your business to bring in one new customer. Follow the above formula and determine how much you are currently spending per customer.Then, you can begin to target new business.
Target the Right Customer
Effective customer acquisition relies on targeting the right customer. To narrow in on your target customer, you must identify where you fit in the market and what needs you fill. Then you can determine the customers needing that particular product, where they are located, and who they are.
Focus on answering the following questions:
- What is your unique value proposition or key differentiator?
- What need do you fill that no other brand does?
- Who are your competitors targeting?
Once you’ve narrowed down what your brand does that no other brand can do, focus on your ideal customer:
- What are their demographics—age, income, location, etc.?
- Where does your customer interact with brands?
- Where does your customer like to shop?
Using a free tool like Make My Persona, you can uncover specific traits about your ideal customer that will help to guide your customer acquisition strategy.
Develop Content Marketing Strategy
Acquiring new customers without spending a mint will require a robust content marketing strategy. Content marketing can encompass as many channels as you’d like, but these channels should be dictated by your consumer research. Where are your customers finding you? Which channels do they interact with most?
If your eCommerce site does not have a blog yet, here’s why you need one. If you need guidance on how to write some killer blog posts to drive site traffic, check out our guide here. Blogging is an excellent way to enhance SEO, as well as provide customers with key product information that can inform their purchase decisions and even reduce the workload of your customer service team.
In addition to an eCommerce blog, you should post several times a day to your social media accounts. The Rule of 7 dictates that a customer needs to interact with a brand 7 times before making a purchase. However, with social media, this process can be expedited. Brands can now interact with their customers at multiple touchpoints, several times a day. Make sure each of your social media profiles matches your brand and displays consistent messaging with high quality images and compelling captions. Making your social posts shoppable with a service like Virid partner Curalate’s Like2Buy reduces friction on the path to checkout, and can increase conversions. If you have the budget to spend on promoted social posts, focus on the channels where your customers are already interacting with you. This will help you get in front of users with similar demographics to your existing customer base, increasing your visibility with potential customers.
Influencer marketing is a valuable strategy for growing retailers. Social media influencers direct new customers to your site through their own websites, blogs, or social media profiles. Oftentimes, smaller influencers will also create posts for brands in exchange for free products, which can be a cost-effective way to implement influencer marketing. Check out our Comprehensive Guide to eCommerce Influencer Marketing to learn how to develop your own strategy.
When it comes to your content marketing strategy, no matter what channel you are using, the more personal and targeted your campaigns are, the better.
Drive Site Traffic
One of the best ways to reduce customer acquisition cost (CAC) is to focus on driving more quality traffic to your site. Growing organic traffic brings new people to your site who are seeking your products and are more likely to convert. To grow organic traffic, you will need an SEO strategy to reach the top of search engine results pages. Check out Moz’s Beginner’s Guide to SEO to get started, and then A/B test your tactics to get the best result.
Flash sales and other promotions are another great way to drive new traffic to your site. Focus your promotions around key holidays or other seasonal events (back-to-school, Prom, etc.) to engage new customers.
Conversion Rate Optimization
Once people reach your site, you need to compel them to convert to a customer. There are several ways to do this, all of which involve optimizing your site performance and usability.
Optimize Product Pages
In order to acquire new customers, your products need to be highly discoverable. Creating category landing pages can improve your ranking on search engines, as well as aid the customer on the path to checkout. Additionally, make sure your product descriptions are written clearly and concisely, highlighting key words in the product title as well as in the descriptions themselves.
Adding product filters and sorting to your site can also help customers find what they need quickly, reducing friction on the path to checkout. Additionally, designing your site search with the customer in mind can help make your products more discoverable and reduce the load on your merchandisers and customer service teams.
There are plenty of other ways to optimize your eCommerce conversion rate. Schedule a site audit with Virid, and we will review your entire site and provide you with insights to start optimizing your business to grow your bottom line.
Referrals and Loyalty Programs
Consider leveraging your current customers to drive new traffic to your site through referrals or loyalty programs. Services like Virid partner Talkable’s referral program allow customers to refer their friends to brands’ sites and earn discounts on future purchases. And partner Clutch offers a loyalty program solution for retailers to attract new customers and retain them. See what the benefits and best practices are when it comes to integrating loyalty, gift, and eCommerce.
How to Win Back Lost Customers
75.6% of people will add products to their carts without ever completing a purchase. Win back those shoppers by sending abandoned cart emails immediately after they leave your site. Instill a sense of urgency in the subject line, such as ‘Don’t miss out on this 2-day deal’, and stress the value your product adds with user-generated content like a rave product review. Additionally, a clear call to action at the bottom of your email with a direct link to your site to make it easy for shoppers to return. Virid Partner Klaviyo put together a guide on developing your abandoned cart email strategy, including when you should send each email for optimal results.
Additionally, you can create a retargeting campaign in Google AdWords to target users who have visited your site in the past, keeping your brand at the forefront of their minds when they are ready to make a purchase.
Reasons Why Your Customer Acquisition Strategy Isn’t Working
So, you’ve done everything outlined above, and you still aren’t bringing in new business. The key to a successful customer acquisition strategy lies in testing and optimizing. A/B testing is a method of comparing two different versions of your webpage to determine which one performs better. A/B test everything—landing pages, buttons, location of the search bar, even the color of the shopping bag icon. Every detail matters when it comes to converting site visitors into satisfied customers.
Still need help creating new business? Contact Virid for a free site analysis and start growing your business today.