Customer Acquisition strategies Start the discussion!

What is Customer Acquisition

Put simply, customer acquisition refers to gaining new consumers. Acquiring new customers involves persuading consumers to purchase a company’s products and/or services. Companies and organizations consider the cost of customer acquisition as an important measure in evaluating how much value customers bring to their businesses. Customer acquisition management refers to the set of methodologies and systems for managing customer prospects and inquiries that are generated by a variety of marketing techniques.

Important Considerations in the Customer Acquisition Process

Acquiring a customer depends on how effectively the organization is able to build a comprehensive relationship with that customer. When suppliers have healthy relationship with customers, the revenue of the organization always increases as customers tend to buy more and more. There is possibility that a satisfied customer seek to buy special category of related products apart from the regular ones from that particular supplier. For instance if a satisfied and loyal customer has a home insurance policy from an insurance company then there are positive chances that he could also insure his property and car if he is fully satisfied with the services of that insurance company. This will definitely result in growth of business.

While acquiring, the nature of response provided to acquisition is the key aspect to create an impressive opinion in customer’s mindset. Hence, the suppliers should always have prompt, responsive and experienced executives to serve customers. For example, if a customer calls and asks about some critical features of any product and the executive fails to explain it or being non-responsive to most of his questions then the customer could probably divert his way to some other organization for better response which could definitely result in end of the deal and relationship with that customer.

Improving customer acquisition is the primary challenge which an organization faces. Hence it is important to identify critical approaches to enhance customer acquisition power. This includes acquiring more number of customers or more number of attractive customers at low cost. One of the best strategies to acquire new customers is performing promotional campaigns. These campaigns should be efficient and well targeted to customers.

Encouragement of customer referrals can also attract new customers. It is always a cost-free advocacy by customers to provide referrals to supplier when they feel satisfied and encouraged and when they have a healthy relationship with customers. These referrals or customer’s reference of other customers act like a piece of cake for suppliers as there is no cost and struggle involved in this.

Why is it important to know my Customer Acquisition Cost (CAC)?

One of the biggest reasons why startups fail, especially SAAS startups, is because their CAC is too high. In order for any company to be profitable, it is very important to make sure that the CAC is significantly lower than the Lifetime Value (LTV) of a customer.

Knowing your CAC is also important while analyzing your marketing return on investment (ROI) and learning more about channels that convert better. If you can figure out which channels have lower CAC, you can easily increase your profit margins.