Customer Acquisition
We walk through what customer acquisition is and why it’s so important for modern businesses.
What is Customer Acquisition?
Customer acquisition is the process of winning new customers for your business. It involves attracting the attention of your target prospects and convincing them to purchase your product or service.
Acquisition activities can include cold calls, email newsletters, webinars, and paid advertising—anything that helps you get new customers. These days, the most successful customer acquisition strategies involve highly personalized, omnichannel marketing based on high-quality customer data.
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Why is customer acquisition important?
A business can’t succeed without customers. This is what makes customer acquisition (along with retention) so important for companies: effective acquisition strategies sustainably grow a business’s customer base while increasing brand awareness.
4 key customer acquisition channels
A customer acquisition channel is any place where people can discover your business and, usually, turn prospects into customers.
Below, we list some of the most influential customer acquisition channels to consider in your strategy.
Social media
Social media use has risen steadily since it first came onto the scene in the early 2000s. Facebook, YouTube, and Instagram all have users in the billions, with new apps like TikTok quickly catching up (TikTok launched in 2016, and just two years later boasted half a billion users).
Social media’s popularity makes it a great channel for customer acquisition. For one, it builds brand awareness. Many businesses use social media to engage customers or promote a new product or sale (e.g. sharing a discount code on Twitter, replying to a user’s comment).
One survey found that 71% of consumers have bought something after seeing it in a social media post. And 36% of B2B decision-makers said they used social media to source new products or services.
With the advent of shoppable Instagram posts, influencer marketing, and so on, social media has become all the more appealing for acquisition. To launch an effective strategy, the first step is to understand where your customers are spending their time (e.g. is your target audience Reddit-obsessed, or have more of an affinity for YouTube?). Then, you can start to employ a strategy of social listening (to gain feedback on your brand, products, etc.) and creating relevant content to effectively grab people’s interest and move them through the funnel.
Email marketing
Email marketing can have a huge return on investment for businesses: like $42 for every $1 spent (which means a 4,200% ROI), according to one HubSpot study.
For this reason, email is a popular medium for lead nurturing, and to steadily build customer relationships.
For email marketing to be successful, there are a few ground rules to follow. First, only email users who have opted in, or freely given their email address to your business. This builds trust, and avoids your brand coming across as spammy.
Second, create different email campaigns tailored to each buyer persona. For instance, would a developer be interested in a newsletter that focuses on marketers? Probably not. But perhaps they’d be more interested in a virtual product tour. In short: don’t forget to personalize campaigns. (You can even use dynamic content for open-time personalization to improve engagement rates.)
Content marketing
Content marketing is another worthwhile strategy for customer acquisition. First, it offers value to customers, whether it’s through informative blog articles, industry reports, infographics, webinars, video tutorials (and so on). Second, it helps establish your brand as an authority on a certain topic, which can serve as a differentiator between you and your competitors.
Content marketing also works well in tandem with email marketing. By gating pieces of content, customers can share their contact information to freely access a webinar or new guide, which bolsters your email list. Then, you can insert different pieces of content into your newsletters or nurture streams to continuously engage customers.
SEO
SEO, or search engine optimization, refers to optimizing your organic web content to rank higher in search results for specific keywords, which can bring more traffic to your website.
Ranking higher in search engine results has a huge impact on your website’s visibility. One analysis found that roughly 71% or search traffic clicks come from the first page of Google.
As such, SEO can be a cost-effective and highly impactful way to acquire new customers, by having them organically discover your website and start engaging with your business.
Frequently asked questions
The purpose of customer acquisition is to find a sustainable way to continuously attract new customers.
Customer acquisition models help you decide:
In which sequence to plan your marketing activities.
What metrics you should use to measure your acquisition efforts.
How to spend your marketing budget.
Two of the most popular approaches for startups of recent years have been the AARRR funnel (also known as the Pirate Funnel, gets its acronym from the metrics it says to measure: Awareness, Acquisition, Activation, Retention, Revenue, and Referral) and the Growth Loops model (which structures acquisition as a closed system in which inputs generate outputs that lead to more inputs and so on).
You can learn more about AARRR and Growth Loops in this guide.
To calculate customer acquisition cost, divide the amount you spent on acquisition—sales and marketing spend—by the new customers you gained in that period.
Say you spend $212,000 to acquire 1,000 customers. You divide those total marketing and sales costs ($212,000) by the number of customers you acquired (1,000) to obtain your customer acquisition cost ($212). Or, in formula form: CAC = $212,000 / 1,000 = $212 per customer.
Twilio Engage enables businesses to customize their communications with customers across channels with over 400 extensible APIs. With Twilio Engage, businesses can strategically interact with customers on their preferred channels to provide a personalized, omnichannel customer experience that encourages new users to convert.