Acquiring customers is the most important step for any business. You may have the best landing pages in the world and the best products or services in the world, but if you don’t know how to get customers then it is likely your business is not going to survive in the long run.
Successful customer acquisition begins with a solid strategy, but time and time again we see businesses skim over this step sand focus all of their attention on traffic and leads.
While traffic and leads are important, if you are not turning those leads into customers, it is not really going to help your bottom line.
Statistics show that only 22 percent of businesses are happy with their conversion rates, which means that most of us have a long way to go when it comes to retaining customers for the long haul.
Over the years, we have helped countless businesses to shift their focus away from generating leads and instead onto generating paying customers. This shift alone has helped all of our clients to get the backend of their business into tip-top shape.
Through this process we have also observed some problem areas and common mistakes that most businesses tend to make when trying to devise a customer acquisition strategy.
These common mistakes could be costing your business thousands, if not hundreds of thousands and could be holding your brand back from making it big.
If you are looking to gain more customers (and what business is not), we have some fool proof ways that you can get your customer acquisition strategy shifting into high gear.
By avoiding these four common mistakes, you can be well on your way to developing a solid strategy that can leave you with a constant revolving door of customers for years to come.
Ready? Let’s get started…
Customer Acquisition in a Nutshell
Before we explore the common mistakes made by businesses when it comes to customer acquisition, it is important to touch on what customer acquisition is really all about.
There are so many different theories and strategies out there about how to most effectively find customers, but we have a some advice on what really works and what really does not.
The first and often most overlooked step in any good customer acquisition strategy is the product or service itself.
Without a solid product or service that is going to address and satisfy the needs of your users, your customer acquisition strategy is virtually useless.
But let’s say you have moved past that step and have developed a perfectly working and needed product or service. If so, the next thing to look at is your estimated cost of customer acquisition.
It may not seem very glamorous to already start thinking about costs, but we have found that this is an extremely important step that most businesses foolishly overlook.
Estimating your customer acquisition cost or CAC, is going to help you create a budget and know what you have to work with. There are many customer acquisition tools and strategies out there, but you have to know what is going to be in your budget and worth your time.
Once you have discovered what your estimated cost of acquisition is, the next most important step is about creating a demand for your product or service. This is where your marketing efforts will come into play and where you can get creative.
Thinking out of the box is a good idea here, as this will help you to reach and find your customers.
Going into the different strategies you can do here would be a separate blog post all by itself, but some ideas to get you started include creating a blog, social media marketing, SEO, building your email list and running paid advertising.
Essentially this is about generating leads and getting as many people as possible interested in what your brand has to offer.
Once you have started to generate interest, you need to pay attention to the type of clients and customers that are coming your way. This is how you will truly define your audience and work out what your customers are really looking for.
In the early stages, often many businesses find that they have two audiences- the audience they currently have and the audience they want in the future.
Sometimes you have to take baby steps in order to reach the clients that you truly desire.
For example, if you are a skin care company your ideal clients may be a celebrities or film studios, but your current audience may be 18-35 year old females from the inner city suburbs of Sydney.
Looking at your current audience however, can provide you with a baseline of how to position your product and how to grow.
Google Analytics can also tell you a lot about your current audience and why they are interested in your product, so tracking your metrics is also going to be important here.
Once you understand your key metrics, you can then build a strategy to reach more people in your ideal audience group using the information you have gleaned from your current audience.
In order to reach your ideal audience, you will need to continually do research and create landing pages, videos and other marketing material that speaks to them directly.
If you are tracking this at every step, you should be able to see where your customers are signing on and where they are dropping off.
You should also be able to work out what is working and what is not working when it comes to the different marketing strategies you are using based on engagement rates.
There is no one clear cut way to acquire customers, but no matter what tools your business is using, the most important thing is to set up effective tracking that can inform you every step of the way.
To summarise all of this in a nutshell, good customer acquisition strategies start with a good product, the creation of a need for that product through marketing, promotion of that product and studying the behaviour of your audience.
Another helpful hint here is to look at what similar businesses have done before you. You can learn a lot by looking at the customers of a competing brand and seeing how they interact with the product, services and different marketing materials.
Adopting some of your competitors techniques is also a great way to cut through a lot of the research portion of your strategy and to skip straight ahead to the top. This hack has worked for countless businesses, so don’t be afraid to give it a go.
As with all things in life, there are some common pitfalls to avoid when it comes to creating your customer acquisition strategy.
After working with countless businesses and experimenting on our own, we have identified the common pitfalls and how to avoid them.
4 Big Mistakes When It Comes to Customer Acquisition
1.) The Way You Treat Your Leads
One of the biggest mistakes we see businesses make in their customer acquisition strategy is that they treat all of their leads in the same way.
Not all leads are created equal and the minute your business can start to address this, the sooner you are going to start seeing results.
There are many different types and categories of leads. Some leads are ready to buy and some are just looking. Some may be doing research on a product and some may have just signed up to your email list to get a freebie.
There is often a huge disparity when it comes to the leads your business is attracting and in order to understand this, you have to first understand the consumer buying process.
The consumer buying process is the fundamental breakdown of why your customers are coming to your page and reading your content in the first place. In fact, the first step of the consumer buying process is the recognition of a problem or an issue that they need solving.
Here is the consumer buying process broken down in order-
#1: Consumer identifies a problem that needs to be solved
#2: Consumer does some research (this is where they find your business)
#3: Consumer begins evaluating information
#4: Consumer begins exploring options and alternatives to those options
#5: Consumer makes a decision to purchase
#6: Consumer actually purchases
#7: Consumer makes a post purchase evaluation
All of your leads are at a different stage of this consumer buying process and by learning which leads are where, it is going to make an astounding difference to the success of your business.
According to HubSpot research, “61 percent of B2B marketers simply send all of their new sales leads directly to the sales team, but only 27 percent of these leads are actually qualified and ready to buy.”
As you can see from this statistic, it is going to be very difficult and even expensive to convince a customer to purchase if they are still in the research phase.
In order to avoid falling into this trap, the solution is to qualify your leads. This means that you have to grade and sort your leads depending on where they are on the consumer buying scale.
To make this easier to sort through, you may want to develop your own categories to place your leads into. For example, you could sort them based on-
- Interest level
- Position of influence
Once you have categorised your leads in this way, you can then begin to sort out where they are in the buying process. Are they hot and ready to buy? Or do they need more information and time?
To do this simply, you could qualify all of your leads using a scale from 1-3, with 1 being ready to buy and 3 being a long term lead that needs to be nurtured over time.
Dealing with your leads in this way is going to yield your brand infinitely better results and it is also going to help you allocate your spending better.
Instead of wasting time chasing leads that are not ready, you can focus on the leads that are and double or triple your customer acquisition rates in no time.
2.) Failing to Retarget Leads
Just because you don’t succeed the first time doesn’t mean you can’t try again. When it comes to gaining customers you have to be aggressive and persistent in all the right ways.
This of course doesn’t mean that you harass customers into buying your products or services, but instead it means that you don’t give up after just one try.
If your initial attempt in targeting a lead doesn’t work out, go back to the drawing board to see if you can come up with a different strategy.
By retargeting your leads you can eventually turn them into paying customers that continually come back to your business time and time again.
According to statistics, retargeting efforts often yield extremely positive results. Research from AdRoll even found that-
- 92 percent of retargeting performs same as or better than search
- 91 percent of retargeting performs same or better than email
- 92 percent of retargeting performs same as or better than other display
This means that retargeting leads can help you to reach the 98 percent of leads that do not buy the first time around.
One of the most effective way to retarget leads is through advertising that pops up on their web search after they have visited your webpage. There are other examples of retargeting strategies as well which include-
- Creating banner ads that target leads
- Using Facebook pixels to track key actions
- Emails leads that abandoned shopping carts or didn’t follow through with a particular action
Retargeting marketing is extremely effective, not just for leads but also for existing customers as well.
In fact, research shows that the probability of selling to an existing customer again is 60 to 70 percent, so make this work for your brand by nurturing your customers as much as your leads.
It can be commonplace to believe that your leads need to buy from you the first time around, but this rarely happens. This is nothing to take personally, instead you have to keep your vision focused on problem solving and working out how you can better serve your leads and customers so they make a sale.
By focusing your efforts on retargeting, it also helps you to learn about your customers and what truly makes them tick, and this can be invaluable to your business in the long run.
3.) Don’t Compromise your ROI
Earlier we mentioned the importance of estimating your customer acquisition cost and creating strategies that fall directly within that budget.
This is important for many reasons, and at the end of the day it will ultimately determine the overall success of your business.
We have seen many businesses make the mistake of spending huge amounts of money acquiring customers, only to go out of business very quickly. This is not the path you want to go down, so having a solid budget in place is really going to help save you when it comes to the longevity of your business.
There are lead generation strategies out there for every type of business with every type budget, you may just have to get creative if your margins are a little tighter.
For example, one of the most popular ways to generate leads is to run PPC campaigns on networks like Google Adwords.
While Google Adwords is one of the most popular and premier advertising networks out there, it can be very expensive and competitive for a younger business to compete.
Instead of ditching the idea of PPC advertising altogether, consider other avenues like Bing Ads, which is not as popular and not as expensive.
It is little things like this that can pay off big time for your brand and can help you to stay on track and under budget.
The good news with this is that customer acquisition is getting cheaper and cheaper thanks to the power of social media and influencers.
There are infinite opportunities across multiple social media platforms to reach your audience. Facebook for example, allows businesses to “boost” posts starting at just as little as $1 per day.
Along with competitive advertising rates, social media platforms also offer many free ways to get exposure including shooting live videos, posting stories and uploading videos and images.
There are infinite ways that your brand can reach customers cheaply and without spending huge amounts of money, the trick is to get creative and stick within the budget that you can afford.
4.) You are Not in it for the Long Run
When it comes to determining whether your marketing strategy is effective or not, you have to give it time.
We see many brands get frustrated when they don’t see results straight away and this causes them to become disheartened and disillusioned with the process.
Customer acquisition strategies take time to tweak and finesse and do require a lot of patience. Often we see companies ditch strategy after strategy without really giving each the ample time they deserve to take hold.
If you have been going through multiple strategies, perhaps you may need to reconsider your approach and see if you can make tweaks rather than ditching things altogether.
This is where tracking things can be your best friend, because keeping abreast of all of your metrics can help you to decide what needs to be tweaked and what needs more time.
There is unfortunately no rule of thumb when it comes to how long you should keep a strategy in play for, but if you have not tested things for at least 2-3 months, you may want to reconsider.
Having said that however, you also don’t want to be funnelling piles and piles of cash into a strategy that is simply getting you nowhere.
While this may be a bit of a grey area, there are some key metrics you can focus on that can help to point you in the right direction. These include the following-
- Bounce rates
- Average time on site
- Click through rate
By monitoring these metrics, you should be able to easily see what needs to be tweaked and what you can do to improve your performance to get more sales.
Customer acquisition is one of the most important strategies your brand will adopt. While there are many ways to generate traffic and leads, if you are not turning those leads into paying customers your entire business is going to suffer.
While all customer acquisition strategies are going to be slightly different depending on your business and branding, there are some golden rules that you need to observe and some common mistakes that you also need to look out for.
Here is a summary of the main points of this article –
- Customer acquisition is one of the most important strategies your business will create
- A good customer acquisition strategy starts with a good product and knowing who your ideal customers are
- To get customers you first have to get leads, but these leads should not all be treated the same
- Categorise your leads based on their willingness and readiness to buy (consider a sliding scale from 1-3)
- Retarget your top leads and don’t be afraid to persist in order to get the sale- research shows that retargeting works
- Nurture your leads that are not ready to buy as this will definitely pay off for your business in the long run
- Don’t forget to also nurture and retarget existing customers as they are 60-70 percent more likely to buy from you again
- Be sure that you keep your budget in mind every step of the way, there is no point gaining customers if you are making a loss
- Give your customer acquisition strategy time to take effect, don’t be hasty to give it up if you don’t see the results you are looking for straight away
- Monitor your metrics every step of the way as this is going to help you improve your performance and strategies every single time