Over the past decade, the cost of acquiring new users and customers has increased by 60%. Implementing marketing strategies has become more expensive. It now takes more time and effort to build trust in the customers’ minds. Does this mean that businesses should give up? Definitely, no.
Instead of focusing on the problem, smart entrepreneurs and business owners are focused on solutions. If they can formulate the right strategy, they can still influence their target audience and indulge in user acquisition. They need to develop ways to capture their audience’s attention to build greater engagement and improve their conversion rate.
In this post, we will discuss the basics of customer acquisition. Once we establish what customer acquisition is and how it works, you will determine the importance of user acquisition for every business. Suppose a business can figure out how to reduce the costs of acquiring new users by leveraging existing customers. In that case, it can have a fantastic competitive edge over others.
By the end of this post, you will be able to build a compelling user acquisition strategy that can withstand the test of the ever-changing market trends.
What is User Acquisition?
To use any marketing concept profitably, it is crucial to understand what it means. When we talk about customer acquisition, what first comes to mind is as if we are doing something harsh. After all, acquiring a firm or any other entity usually requires some rigid steps to be taken. But user acquisition needs to be done in a compelling yet mild manner. The point is to convince and bring your potential customers closer to making a purchase, not to push them away.
User acquisition is the process of getting new customers and users on board to buy products or services from your business. Professionals and marketers involved in customer acquisition use specific techniques to approach the target audience, send them relatable marketing messages, and guide them towards the desired action in a friendly way. This process aims to build a systematic and sustainable strategy that allows the business to make more sales and grow its revenue. The user acquisition process needs to align with your company’s overall marketing plan. You need to figure out ways to showcase your brand and connect with your target audience. However, the difference between marketing and customer acquisition is that marketing efforts can be made at times to only drive brand awareness. On the other hand, customer acquisition tactics are consistently applied to drive actions.
For example, if you use Facebook advertising to promote your products, you will aim your ads to a specified target audience. The metrics shown in the ad settings and analytics will help you determine if your campaign is effective. Through Facebook Analytics, you will be able to track the number of people who view or share your ad, comment on your boosted post, react to it, and so on. This is marketing.
Meanwhile, user acquisition is about what happens after the target customers click on your ad to get to your landing page or subscribe to your email list to receive newsletters. If they do end up making a purchase from your website or store, it means you acquired new customers. To state this in simple terms, your marketing efforts drive recognition for your business and brand, while your user acquisition efforts drive revenue.
Let’s briefly talk about the importance of user acquisition before moving on to the step-by-step process of acquiring new customers. User acquisition is vital for both small and large organizations. It allows a business to generate more revenue and penetrate more markets. Although customer acquisition requires a firm to invest money in the process, it does pay off in the long run if the firm can retain the customers that it gets. The money flowing to the firm through user acquisition can cover its expenses or reinvest into the business for growth. Companies with effective customer acquisition strategies can keep growing and making their investors happy.
Another benefit of user acquisition is that it develops traction for the company that can be shown to third parties, such as business partners, angel investors, social media influencers, and others. When these people see the rate of growth of the company’s customer base and revenue, they get interested in getting themselves involved with the company in ways that can greatly benefit the business.
User acquisition works through a process that involves a customer acquisition funnel. The concept is similar to a marketing funnel but has more layers. In the business world, customers are usually visualized to go through a journey before purchasing a product or service. This journey is presented by marketers in the shape of a funnel or other similar graphics highlighting the different stages of the buying process and the prospect’s mindset at each stage.
As prospects move down the funnel, they keep getting less and less in numbers. Those who back off from completing their buying journey are filtered out of the funnel. The lower a prospect reaches in the funnel, the more they get aware of your brand. The marketers are constantly observing their behavior and coming up with marketing messages to influence their decision. When the prospects are ready to consider purchasing, the marketers add a product or service to the consideration pool. Prospects who successfully pass through the user acquisition funnel decide to become the company’s paying customers.
The top of the funnel is mainly dedicated to lead generation. When the prospects arrive at the funnel’s center, the focus is on lead acquisition. The bottom of the funnel is where lead conversion takes place. If we combine the three phases into one, we call it the process of user acquisition. In other words, customer acquisition refers to the process presented by the complete funnel.
Businesses use various marketing techniques to push the prospects through from top to bottom. Every layer of the user acquisition process requires different marketing tactics. For instance, the top layer requires a business to conduct as many outreach activities as possible. The goal is to familiarize the audience with your brand. Outreach can be done through paid advertising, content marketing, or simple door-to-door marketing.
Content marketing, which includes blogging, making Youtube videos, guest posting, and building social media engagement, continues until the bottom of the funnel. Creating valuable content gives long-term benefits to a business by organically growing its website traffic and enhancing brand equity.
The last phase of user acquisition as the bottom of the funnel requires dedicated and customized marketing strategies to convert prospects into customers. Businesses these days use all kinds of creative techniques, such as lead scoring and deal closing tactics, to make the prospects pass through this phase.
How is User Acquisition Measured?
You must have heard the term ‘customer acquisition cost’. It refers to the cost of bringing a new user or customer to the business. It typically includes all the advertising, promotion, and digital marketing costs incurred for running a successful marketing campaign over a given period.
Customer acquisition cost is substantial because it reveals the actual value of your marketing efforts and helps you measure your investment return. It is calculated by dividing the marketing costs associated with a specific promotion campaign by the number of new customers acquired from that campaign.
Calculating the user acquisition cost requires you to use specific metrics. For example, if your campaign was run online, you will need to know the number of people who visited your website or landing page after seeing your ad or post. That’s why you need to have a professional and feature-friendly webpage that has the tools available at its backend for you to measure these metrics. If you create your brand website on Strikingly, you can access statistics about your website visitors through your editor and dashboard.