What is customer acquisition anyway and why is it relevant for your business?
Definition: Customer acquisition is the process of attracting new customers to your business.
It covers the entire Buyer’s Journey – from the moment a person becomes a lead to the conversion into a paying customer. Depending on your product or service offering, acquisition can be a long or short process from start to finish. Regardless, your strategy should cover all the steps: you need to engage, convince, close and retain customers.
How can you measure your company’s customer acquisition?
It is important to monitor and measure your success in customer acquisition to determine effectiveness as well as costs. The best metrics to evaluate customer acquisition efforts and identify opportunities for improvement depend on the industry. However, some of them apply across industries and are used by companies to adjust their strategies and achieve better results.
The following are metrics that provide a good starting point for measuring your customer acquisition:
1. Conversion Rate = The conversion rate is used to measure business growth. It indicates the percentage of people who follow through to the end of a process they started. For this metric to be useful, it is essential that you clearly define the ‘start’ and ‘end’ of the process in question.
2. Customer Acquisition Cost = This is a commonly used metric that evaluates the effectiveness of your customer acquisition efforts. Among other things, it calculates the marketing expenditure per customer acquired in a certain period of time, as well as the costs of individual marketing methods. This provides an indication of the success of your overall acquisition efforts and helps you determine which strategies will give you the best results. A common method of calculating the cost of acquiring new customers is to divide the marketing spend by the number of customers acquired.
3. New customer acquisition rate = You can use this to compare your acquisition rate over different time periods to see if your results improve over time. To calculate this rate, you need to divide the number of customers acquired in a given period by the length of time.
4. Visitor rate = With this method, you can record early interactions with potential customers in numbers. This allows you to assess the effectiveness of these product pages or landing pages and identify any opportunities for improvement.
The three important areas of customer acquisition and B2B marketing
These are inbound marketing, outbound marketing and account-based marketing. The best known and most widespread B2B marketing approach is inbound marketing. Here the aim is to generate attention from potential customers with expressive information about the company. This should support the process of the purchase decision. Inbound marketing is therefore about building trust with the customer and getting the customer to decide for the company on their own.
Unlike inbound marketing, outbound marketing involves the company directly addressing potential customers. In other words, the company approaches the customer offensively and with as many measures as possible in order to win the customer. In this process, other sub-disciplines of marketing are used to win the potential customer. These methods include, for example, advertising mails, banner ads, posters or direct mail. The focus here is that the potential customer receives the information in bulk and the company is fixed in his memory. However, the path to a purchase decision is often very short.
The third method of customer acquisition is account-based marketing, also known as ABM. This method is not aimed at the masses, but at smaller potential customer groups. Thus, with this method, it can happen that each potential customer is approached individually and personally. Here, the IP addresses of the other companies are used, so the companies can be addressed individually. Dynamic websites are usually used for this, which automatically adapt to the customer and the characteristics.
Customer acquisition can be divided into two categories, cold acquisition and warm acquisition.
In cold calling, there is no contact with the potential customer, whereas in warm calling there is already contact.
7 tips to improve your cold calls:
1. Define market, industry and target group = Define exactly which buyer personas you want to address and build an effective customer journey for your customers based on this.
2. Define USP = Unique Selling Point. This defines your company and shows how you differentiate yourself from your competitors.
3. Online Marketing = Make sure that you are not only represented offline, but also online! Especially in the current times of the Corona Pandemic, it is enormously important for customer acquisition that your company is represented online.
4. Inbound – Outbound Marketing = Decide on a strategy that best suits your company.
5. Social Selling = Social networks are an important channel for customer acquisition in B2C and B2B alike.
6. SEM = You can’t do without SEM (Search Engine Marketing). If you focus on inbound marketing, SEO (Search Engine Optimisation) is an important SEM discipline. If you would rather have short-term success, you should rely on SEA (Search Engine Advertising), for example by placing Google Ads.
7. Recommendations = Your existing customers are important multipliers. To ensure that they recommend your company and its products via word of mouth, you need a Customer Success Management (CSM).
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