When your business circulates around delighting and retaining customers, your marketing strategy starts to resemble a flywheel, not a funnel. Put in the time to learn SEO strategies, stay up to date with trends, and optimize your blog posts — and you’ll find your content ranking better than before. You can increase your content’s “indexability” (no, I cannot say for certain if that’s a real word) by: There’s a lot that goes into SEO, but these are a few basics to get you started. For example, if Company A spent $10,000 on customer acquisition in Q4 of 2017 and acquired 100 customers, the CAC would be $100. Lots of leading brands do this: Dropbox, Slack, and (you guessed it!) Organic social media also capitalizes on the virality factor, inspiring your customers and followers to help you advertise (as we'll discuss later on). For the sake of this guide, we’re going to use customer acquisition in reference to the top and middle of the marketing funnel — lead generation and acquisition combined. CPI, or Cost Per Install, is one of them, and while on the surface the name makes it sound deceptively simple (pay-per-install means you pay when someone … There’s a major difference between the CAC of an Audi dealership and a Starbucks. Email is also a great way to simply connect with your audience, whether by sending a happy birthday email or a valuable promotional email. When you lose customers, you want to go out and find new ones, right? Now that you know what makes an amazing customer acquisition strategy, let's talk about some companies that are doing it well. Does/did your company spend money on marketing efforts that are slated to pay off in the far future? Keep reading to learn more about how to combine customer acquisition methods with highly effective promotion tactics to get better results. Keep reading or use the chapter links below to jump ahead. It’s also referred to as customer attrition or turnover. This is a nonnegotiable and means delivering on more than the basic customer expectations. ... to your customer base will always result in a decreased cost of customer acquisition. Video marketing as part of a broader content strategy is more about content than quality, though the latter does help in the long-run. More on This Later. Today most events are online, which can actually make customer acquisition easier as attendees have to register with their email addresses to attend (whether they pay or not). Before you invest in any customer acquisition methods, you must define who you’re targeting with said methods. Because of this, each and every piece of content should be relevant to your readers and include a clear call-to-action. Below, we’re going to review some commonly used methods of acquiring new customers along with some helpful tools. For insights on how to meet your target audience in the most important moments, request one of our Consumer Behavior Insights reports in the form to the right. If your audience is made up of millennials, you should definitely include Facebook, Instagram, and Snapchat in your playbook. Customer lifetime value is the estimated net profit that an individual or business will provide over their lifetime as a paying customer. Ebooks, guides, and other types of gated content offers represent a different type of content marketing because they typically involve created more in-depth, valuable content. The Ultimate Guide to Customer Acquisition for 2020. We're committed to your privacy. Manage and plan your social media content with this free calendar guide and template. Video production typically involves script writing, editing, production, and animation — all of which you can outsource through freelancers or production agencies. Customers with high LTV are more expensive to acquire, but they provide the greatest value — in terms of revenue, feedback, and referrals — than other customers. The best channels for your business will depend on your audience, resources, and overall strategy. Reducing the costs of customer acquisition and proving the ROI of marketing efforts are two of the most commonly cited marketing priorities among companies. CAC can be a fickle metric and shouldn’t be the only number used to evaluate marketing efforts. Customer acquisition channels are methods, platforms, and strategies through which companies attract new fans, readers, and leads. Keep an eye out in the coming weeks for a more detailed discussion on LTV and how to calculate it. What networks are you going to leverage and which ones are you going to avoid? SEO, like social media, complements content marketing efforts by optimizing your content so it’s more easily found by your target audience. Customer acquisition methods can be broken up into a variety of different types: paid and free, inbound and outbound, etc. Truth is, people trust other people more than they do advertising and salespeople. (Source: Propeller), Below are the median costs per acquisition within Google Paid Search Campaigns in 2018. This type of content is also called "gated content," as leads have to enter their emails in exchange for access to the content. Video is one of the more complicated forms of content to produce, but with higher-quality cameras becoming cheaper and a plethora of freelancers available, creating videos is easier than you think. Customer acquisition is important for businesses of any age and size. Understand Short-term Hacks vs. High-level customer acquisition cost is calculated by dividing marketing costs associated with a specific campaign or effort by the number of customers acquired from said campaign. If you simply want to visualize an idea for your audience, you can create a Slideshare as an alternative to video. Note: medians were calculated to omit campaigns that exclusively bid on branded terms or had unnaturally high/low CACs. Kaleigh is a leading freelance writer for SaaS and e-commerce platforms. High-level customer acquisition cost is calculated by dividing marketing costs associated with a specific campaign or effort by the number of customers acquired from said campaign. Some popular customer acquisition channels include: Instagram: Visually attractive posts and short videos. Sure, your marketing team is responsible for developing and releasing new promotional materials that may spark interest in new customers. For example, if you’re targeting an audience mostly comprised of men, Pinterest would have little value for you as only 15% of men use Pinterest. 10 W Market Street, Ste 1950Indianapolis, IN 46204Call us: 1-317-993-3620. The process alone of defining your buyer persona can help weed out any unnecessary or wasted acquisition efforts as well as alert you to specific needs or desires that some channels may meet. At this point, you may be asking, “What’s the difference between lead generation and customer acquisition?”. In marketing circles, Facebook is considered the most important platform for both B2C and B2B businesses. The Customer Acquisition Cost varies significantly depending on the company and product(s). Why? We love what we do, and we want to share our expertise with you — for free.”. From one-off payments to costs-per-metric, there is a number of models for mobile app marketers to choose from upon launching an app's advertising campaign. But a good way to benchmark your CAC is by comparing it to Customer Lifetime Value (also known as LTV). It's also unique in that it actively involves your customer service and success teams. (Source: Propeller) Travel: $7; Retail: $10; Consumer Goods: $22; Manufacturing: $83; Transportation: $98; Marketing Agency: $141; Financial: $175; Technology (Hardware): $182; Real Estate: $213; Banking/Insurance: $303; Telecom: $315 A great example of an effective referral program is Airbnb. Use this free CAC calculator template to determine your business's key metrics and KPIs for customer support, service, and success. Outside of direct sales, there’s no better acquisition tactic than email marketing that gets to the heart of the individual customer. We may be a bit biased, but HubSpot is an industry leader in content-based customer acquisition. If these questions seem intimidating, don’t fret. On the other hand, paid search marketing (pay-per-click, or PPC) is advertising on a Google SERP itself. While a structured, incentive-based program typically works best for B2C companies, B2B companies might have better luck asking for direct referrals from their customers. From display & search marketing wisdom to general growth tips, here are a few resources to help your digital marketing teams work smarter, not harder. A sustainable customer acquisition strategy is one that works in the long run. Customer success. For more information, check out our privacy policy. Customer LTV is a helpful factor to consider when getting to know your customers and how they interact with your business. It also provides a direct line into your consumer’s inbox (though it’s not guaranteed they’ll open your emails), unlike social media, search, or content marketing. Then, you can expect to see real responses to your customer acquisition efforts. Customer acquisition is an opportunity for your company to get creative. Set up your acquisition strategy correctly, and you can expect to not only lower your customer acquisition cost but also increase your customer lifetime value. Think about it: When you Google something, you typically click on one of the first results (if not the very first result), right? It’s a well-known fact that retaining customers costs much less than acquiring new ones. Customer acquisition is all about acquiring the right customers that stick around — and help you acquire more. See all integrations. What if we avoided the proverbial (and pricey) band-aid of customer acquisition and went to the source of the wound — unhappy or unsatisfied customers? Learn how to acquire new customers and leverage your current ones to grow your business. One is silver, and the other, gold." Customer acquisition cost involves research, marketing and accessibility costs. They build an email list, and they leverage that email list to connect with and convert their customers. Stay up to date with the latest marketing, sales, and service tips and news. Some companies consider organic social media a waste of time (13% of marketers have reported that it’s the most overrated marketing tactic), and it can be if you don’t develop a solid game plan for its use. By defining customer LTV alongside CAC, companies can figure out just how long it takes to replace each investment made in acquiring new customers — and how to better spend that acquisition budget. At the most basic level, cost per acquisition is a marketing metric that measures the aggregate cost of a customer taking an action that leads to a conversion. Mixing up and experimenting with a variety of customer acquisition methods can also help you learn more about your audience and introduce new tactics to your current strategy. That's why acquisition marketing is broader than just your marketing team. Content marketing is an effective customer acquisition method for all types of businesses. On that note, let’s discuss another buzzword: Churn. While salespeople were once the gatekeepers of information about a product, that’s no longer the case. This article provides an explanation of the average customer acquisition cost calculations. Value of the Customer Must Exceed Cost of Customer Acquisition. This information isn't always easy or natural to capture when meeting prospects in person. In this guide, you’ll learn the basics of customer acquisition, how to lower the cost of acquiring new customers, and how to leverage your loyal ones. The mobile app marketing industry is powered by several business models. Running a blog allows you to explore different topics, flex your knowledge in your industry, and build authority among your readers. Say you invest in a Q3 campaign but pay for it in Q1. While the funnel is a handy visualization of how customers come to know and buy from your brand, it’s lacking in one thing: how your current (and past) customers fuel future customers. Well, the first two statements are unfortunately correct, but rest assured, the last one is not. That’s why these types of content are also gated, meaning that readers must exchange personal information like emails and names to access the content. It is said that an ideal LTV to CAC ratio is 3:1. If you're looking for ways to improve your customer acquisition, you're not alone. Customer acquisition is the lifeblood of any company, small or large. Consider it the gasoline for a fire you’ve already started using other acquisition methods. Try using our interactive Customer Service Metrics Calculator. Content Author: Statistic Brain Date research was conducted: May 14, 2018. Marketing automation software. SEO best practices involve creating indexable content – content that search engines can read, decipher, and index within a SERP. CAC is important because it assigns real value to your marketing efforts and allows you to measure your ROI — a metric inquired about by CEOs, managers, and investors alike. (Seriously — you should check it out.). How to calculate Customer Acquisition Cost (CAC) Calculating your brand’s customer acquisition cost allows you to assess their acquisition spending at the most granular level on a per customer basis. But research has shown that the key to growth lies not with your marketing or sales team but your customer service team, and your customers themselves. Whether through case studies, interviews, reviews, or user-generated content, ask your customers to tell their own stories of how they came to discover your business and why they love it. Remember how I discussed the marketing funnel in the first section? Instead of visualizing customer acquisition as a one-way funnel, start picturing your customer acquisition and retention methods as a flywheel: Always work to bring new customers on-board, but don’t forget about them once they’ve joined the crew. CAC calculations can vary in regards to the inclusion of variable and fixed (or overhead) costs. In other words, it is the cost of resources for the business in order to acquire a new customer. Why is churn important? Equip them to succeed, and they’ll go to work on your behalf. The “flywheel” is model adapted by HubSpot to explain the momentum you gain when you align your entire organization around delivering a remarkable customer experience that produces happy customers who drive referrals and repeat sales. Otter's free plan is pretty generous — 600 minutes of recordings and unlimited .TXT exports, so I don't personally plan on upgrading anytime soon. The process of creating content offers is similar to that of the blog but might require more specialized resources. There’s always something to learn and always something to improve upon. Marketing Trends Customer Acquisition Cost (CAC) is the cost of winning a customer to purchase a product/service.As an important unit economic, customer acquisition costs are often related to customer lifetime value (CLV or LTV).. With CAC, any company can gauge how much they’re spending on acquiring each customer. Since your service addresses the key pain points of your customers, their success is vital to yours. Wondering how? Your blog writers can be dedicated employees, freelancers, or guest writers. Customer churn is what motivates businesses to find and acquire new customers. Average Customer Acquisition Costs by Industry. There’s one thing that has the potential to kill a tech start-up - the customer acquisition cost (or CAC for short). Gain a better understanding of conversion strategy in this free HubSpot Academy course. Customer Retention vs Acquisition. Both of these are important metrics to calculate and compare when reviewing marketing and sales efforts. Here’s a simple truth about marketing: You can always do better. Check out the cost per acquisition of customers in various e-commerce industries from 2019 to 2020. Social media marketing is comprised of two methods: organic and paid. For example, businesses targeting millennials might consider creating videos as part of their content marketing strategy, given that 91% of adults ages 18-29 use YouTube. We'll talk later about the importance of customer retention as an acquisition strategy, but the key thing to remember here is that your customer service team has the same ability to bring on and keep new customers as your marketing team does. A solid customer acquisition strategy should be four things: sustainable, flexible, targeted, and diversified. 90% of happy consumers are more likely to purchase again, and 93% are more likely to be repeat customers at companies with excellent customer service. (But don’t get me wrong — that’s important, too!). Kaleigh has also been sending a bi-monthly email newsletter for five years, full of freelancing and writing tips and stories for her audience. The best rule of thumb is to be spending 33% or less of your average customer lifetime value. So, if a SaaS customer LTV is $1,000, then their customer acquisition costs should be in the range of $200 to $300 to stay competitive. Give your customers a reason to want to refer you — because they’re so delighted by your business, they can’t help but share. However, by getting a taste of the Otter product, I can now better explain it to other people and companies — folks who may upgrade themselves since hearing about it from me. By providing a freemium option, Otter not only encourages me to upgrade but also better equips me to evangelize on their behalf. Posting organically on social media may seem like shouting into a void, and with 3.8 billion active users, it can sure feel that way. As of the first quarter of 2020, Alibaba's average customer acquisition costs amounted to around 812 yuan, whereas social e-commerce platform Pinduoduo spent on … In terms of cost per acquisition per industry, the home services industry takes it at $21.68, and technology once again dishes out the big bucks at $102.94 per new customer. ↓, How to Calculate Customer Acquisition Cost (CAC)? You can always reach new audiences, market with better messages, and minimize associated costs. HubSpot uses the information you provide to us to contact you about our relevant content, products, and services. The good news is that you can equip your customers — especially your most loyal ones — to market on your behalf. Blogging is a highly recommended acquisition method for businesses of all sizes, industries, and audience types. User acquisition strategies involve establishing relationships with potential customers, addressing their needs, and providing them with valuable information they need to make an informed purchasing decision. In exchange, participants got access to live presentations from a variety of speakers as well as opportunities to network with other attendees. Events, like conferences, webinars, and trade shows, are a fantastic way to connect with interested prospects and acquire new leads. A customer acquisition channel is any place your customers meet your brand for the first time — whether through social media, organic search, or a paid ad. It allows your business to: Being able to systematically attract and convert new customers keeps companies healthy and growing — and investors happy. Consumers are increasingly skeptical of brand claims and anything said about a product by the company or its reps. Personally, I find it motivating. Similar to the 93% of professionals who see the importance of customer retention, subscription leaders are banking on their current customers to drive most of the growth in 2020.According to the report, the top priorities for companies are retention, acquisition and onboarding. It’s when bees spread pollen between a variety of plants, bringing about variations of species that better withstand time and nature. Generally speaking, this ratio should always be at least 3:1. the searches they conduct along their path to purchase and the content they're interested in consuming. Consider this in comparison to ads, which can be an effective way to acquire customers … as long as the ads are live. It should generally include things like: advertising costs, the salary of your marketers, the costs of your salespeople, etc., divided by the number of customers acquired. Customer acquisition cost is the best approximation of the total cost of acquiring a new customer. Below are the median costs per acquisition within the Google Display Network (GDN) in 2018. omit campaigns with unnaturally high/low CACs. Download our free Beginner's Guide to Email Marketing to learn how to execute and measure successful email marketing campaigns. Calculating customer LTV isn’t difficult, but it does require defining a few metrics along the way, such as average purchase value and frequency. Video tends to be the most expensive of the content types, so be sure to preserve your very best content for video ideas. Note: medians were calculated to omit campaigns with unnaturally high/low CACs and organizations have structured their acquisition. 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