Customer acquisition, or getting new customers, is something every business wants to do. Even when you have a loyal customer base, there’ll always be some degree of “churn,” customers that stop buying from you for one reason or another. Whether you have an established business or are just starting out, your ability to acquire new customers is the deciding factor that determines whether your business will survive.
How do Businesses Acquire Customers?
There are many ways to get new customers. Some of them cost a lot of money, and others don’t. But even old-fashioned local businesses that rely on passing trade will do their utmost to make their businesses look attractive, so there’s always an element of marketing involved.
Your customer acquisition strategy will depend to a certain degree on the type of business you have. For example, people who offer professional services often rely heavily on networking and referrals. Online retail businesses will count on having good online storefronts, and will attract new customers through advertising and search engine optimisation.
B2Bs may target businesses that would benefit from their goods and services, and may try to set up meetings with them, send reps to show samples of what’s on offer, attend trade shows, or even cold call to gauge interest and take it from there.
Customer Acquisition Costs
Although it takes money to make money, it’s important to know your customer acquisition cost. A simple way to do this is to take your marketing cost, and the cost of any facilities or tools you needed in order to make the sale, over a specified period, and divide that by the number of new customers you acquired. It’s not as complicated as it sounds: take the “Cost of Sales” figure from your business’s books, add the cost of your marketing, and you have the baseline figure you need to work from.
If the number of customers you’re getting doesn’t seem to justify the cost, it’s time to restrategise! Before you do though, consider how long a converted customer is likely to support your business and how much money they are likely to spend. What looks like an expensive acquisition could be a valuable one if you can expect cumulative earnings or multiple referrals off the back of that!
What is the Customer Acquisition Funnel?
When you’re developing your customer acquisition strategy, it helps to understand the customer acquisition or sales funnel you’re trying to move prospective customers through. Strategise for each portion of the funnel, remembering that your chances of making that sale improve with each of its stages.
Your first step is to make the right people aware of the fact that your business exists and can help them with its products and services. Think about your ideal customers and where you might find them, be it online or offline.
Once they’re aware of your business, it’s up to you to try and pique your audience’s interest. If you can achieve this, they’ll check your business out in greater detail and decide whether supporting it is worthy of consideration. During this process, they might reach out with questions, and your answers will make them decide whether they will move on to the next step: consideration. Not all of them will. Some of them might decide that they don’t need what you offer after all, but those who do are now hot prospects.
During the consideration stage, your prospects think about whether they should follow up on the interest you generated. Once again, they may interact with your business’s representatives or your website. Having given the matter some thought, they will either develop buyer intent, or leave the funnel. But even if they do, they’ll remember your business and may return later or recommend it to other people that they think might benefit from what you do. Your efforts so far are definitely not wasted!
By the time they reach this stage, your potential customers are very near to making a final purchasing decision. If they haven’t interacted with your business before, they will do so now. They’re not quite ready to become your customer, but if you play your cards right, your chances of winning them over are very good.
At this point, the prospective customer knows enough about your product or service to weigh up alternatives. They’ll consider what they’re likely to get, they’ll compare the possible benefits with the costs of getting them, they’ll compare you to your competitors, and they’ll have formed an opinion of your customer service. The latter is especially important. Most people are willing to pay more (within reason) if they believe they’re likely to get excellent service in the process.
You’ve reached your initial goal and you’ve gained a new customer! But although you’ve successfully navigated customer acquisition, your work is not yet done. The new focus? Customer retention!
Top Tips for Customer Acquisition
In business, you’ll rarely if ever get something for nothing. Your customer acquisition process gains you customers, but it also costs you money. Use these tips to get better returns on your investment.
Awareness: Target the right people in the right places. Don’t spread your net too wide or target a demographic that isn’t going to benefit from your products.
Interest: Get their attention. Craft your marketing messages in such a way that your target market can’t resist finding out more.
Consideration: Make it easy to find information. Respond quickly and professionally to enquiries. Help customers to find the best match for their needs.
Intent: If you have contact details, now’s the time to follow up and see if your customer needs guidance. Signs of buyer intent are great, but you still don’t have a customer!
Evaluation: Software businesses have an advantage here. They can offer free trials and their customers can use them to evaluate whether the software is right for them. Other businesses might tip the scales in their favour by offering an additional benefit like a discount or a guarantee.
Purchase: Now’s the time when your product and your people really have to do their stuff. Offer great service and after-sales support to keep your hard-won customers.
The Human Element is Still the Most Important Element
Doing business remotely may mean that you never meet your customers face to face, but don’t let that lead you into thinking the human element isn’t important to them.
While some of them may go through the funnel with barely a whisper, many of them will require personal attention at some point. When they do, they’re going to want good answers, and they’re going to want them fast. Make them wait, fail to give them the information they want, and you’ve just given them time to change their minds about supporting your business.
Can your people be available 24/7? Can you scale customer service and support to handle peaks and troughs on demand? Do they follow up your top prospects and turn them into customers? Are they giving you information about what your customers like and what they struggle with? Are all these questions stressing you out because you know that the answers to some or all of them are “No?”
Relax. You’re invited to get one of the UK’s most established and successful customer service teams on your side: RSVP. Contact us and let’s talk about your customer acquisition process, your customer acquisition strategies and your customer acquisition and retention needs. We make it our business to help your business reach its goals. You’re in charge. We do the legwork – and we do it well. Our customer lifecycle management services will help you to reel those prospects in, and once they become your customers, we’ll be your partners in keeping them that way!