Customer acquisition is a key element to driving growth in any company. A great customer acquisition strategy is not just about quantity of leads, it’s about identifying the quality of those leads and setting those high-quality leads up for success with an automated customer journey.
This is where the customer acquisition model comes into play. It automates the process of identifying the best leads and setting them on a path to conversion.
If your business is focused on acquiring customers, marketing automation software will help at every stage of the journey — from lead generation to customer retention and advocacy.
What is customer acquisition model?
Customer acquisition is a broad term used to describe systematically bringing in new customers and clients to your business. The goal is to create a bridge from your initial brand awareness campaigns (like advertising or PR) through to generating leads, nurturing them over time, and building trust along the way, until you finally convert them into new customers or clients. The trick is to coordinate these various promotional techniques to provide visitors with a seamless experience that educates, interests, and persuades. These methods commonly include:
Content strategy: Content creation is the glue that binds everything else together. It guides everything from the creative in your ads, the offers in your emails, to the copywriting on your landing pages.
Advertising/media buying: Advertising is one of the most common customer acquisition methods, and when done right, can scale your startup faster than any of these other methods.
Conversion optimization: Using landing pages to generate leads or customers is another cornerstone in customer acquisition, presenting people with different value propositions to test and scale growth.
Marketing automation: Creating programmable, automated emails that send based on customer activities throughout their lifecycle. This will allow you to segment, target, and customize specific offers to the right people at the right time.
Search engine optimization: Search is the holy grail, and common among the top channels for new customers to all businesses. When done right, it’s also one of the most profitable and cost-effective channels too.
Social media: Social channels are used both organically and through paid efforts. Often customer acquisition efforts include lead generation content like ebooks, whitepapers, and reports.
How does customer acquisition model work?
One name that instantly comes to mind when customer acquisition is mentioned is Noah Kagan. Noah was an early employee at both Facebook and Mint, before going on to successfully found Gambit, AppSumo, and SumoMe. He’s no stranger to growing successful brands.
At Mint, which has since sold to Intuit for $170 million, Noah led ‘all things marketing.’ He reported that they had, “more traffic than all of our competitors combined”… before even launching, with over 20,000 people on a pre-beta list.
Access to this huge audience when the product first debuted played a key role in hitting critical mass so quickly and being acquired. But how did they do it?
Step 1. Quant-based marketing
Instead of passively waiting around for the press to swarm over how amazing Mint was, Noah used a more predictable approach with quant-based marketing.
The idea was to pick specific targets or channels where they had unique in-roads to generating customers.
For example, they gave early VIP list members custom-designed badges, encouraging them to show their support (and priority access) by displaying the badge on their website (which also provided Mint with high quality, relevant backlinks for SEO). Another example includes partnering with niche bloggers who have small, passionate readerships and sponsored ads on their sites.
Step 2. Email collection
Next, they funneled this new traffic to landing pages that tested different messaging around alternative value propositions, including savings, notification alerts, and more.
For example, this one focused on putting money back in your pocket.
Compared with this one, which focuses more on managing new credit cards.
During this process, they kept detailed records of the cost to generate each new lead, along with the conversion and performance of various campaigns and websites to continually reassess their efforts. Today this approach might not be as groundbreaking because it’s become so ingrained in the startup growth world. However, at the time, it was fairly ingenious, and it still serves as a perfect illustration of how multiple disciplines need to cohesively work together towards the common goal of acquiring new customers.
What are common customer acquisition misconceptions?
Despite its critical importance, there are a few common customer acquisition misconceptions that still persist. Here are three of the most common.
1. “Advertising is a waste of money.”
When done properly, advertising is an investment - not an expense. The trick is determining the lifetime value of a customer (LTV), and then comparing that to the customer acquisition cost (CAC). For example, at Mint, Kagan spent $750 advertising in a newsletter, only to double his return two weeks later. He even bumped his initial investment up 4x, and the ROI still stayed the same. This is a simplistic example to illustrate the power of advertising when done correctly.
2. “SEO is free.”
Contrary to popular belief, inbound marketing methods like content, SEO or social media are anything but free. It takes a tremendous amount of time, creativity, and labor to create things worth talking about or sharing. For example, executing even a simple campaign is going to require copywriting, design, and development skills, not to mention promoters who are great at getting the word out. You could be looking at a small team of contractors or employees before it’s all said and done. The good news is that inbound methods almost always prove more profitable over time than outbound methods. It’s just going to take a few months (and a few additional resources) to get there.
3. “That won’t work for my business in [XYZ] industry.”
Customer acquisition is simply a general framework of promotional strategies. The specific channels used, or tactical application will vary. But if an insurance company can generate hundreds of inbound links while also jumping from the 5th spot to 3rd spot on Google through blogging, you can probably find a use for it too. The overriding principles can still apply regardless of specific industry, helping even the most boring companies in the oldest industries grow their online awareness, leads, and customers.
What is a customer acquisition model?
As we’ve mentioned, customer acquisition is rarely, if ever, completely free. Whether you’re spending money on advertising or on content, design, and development, there’s an output of time, money, and resources that needs to be offset by the customers you’re bringing in. That’s where a customer acquisition model comes in — it helps maximize your ROI by focusing efforts on the prospects that are most likely to convert.
Customer data and marketing automation are essential to scaling any good customer acquisition model. With these two tools you can:
Nurture customers to become advocates, driving more acquisition (e.g. using a growth loop)
6 steps to building a high-performing customer acquisition model
1. Identify your ideal customer
By unifying your data and segmenting your audience, you will start to spot patterns with your top-performing customers. These patterns may be profile-based (demographic, geographic, or business types) and action-based (product actions, time to value, or purchasing habits).
This information will help you drill down to identify your ideal customer, forming a persona with a set of attributes that can be targeted through advertising efforts and organic marketing materials.
2. Set and track your goals
It’s not enough to set a goal for new acquisition — you need to get granular and track things like customer lifetime value, customer acquisition costs and ROI, churn rate, and monthly recurring revenue.
Use a platform like Ortto to set up dashboards with built-in revenue attribution to ensure your whole team can track progress and optimize messaging and advertising activity.
3. Build an omnichannel marketing journey
An omnichannel approach, targeting customers across multiple channels with a messaging sequence, will help ensure your customers have a positive experience with your brand. The channels you choose may include
Paid social media campaigns
No matter which channels you choose, it’s important to build an omnichannel marketing journey that prioritizes the end customer’s experience. In a tool like Ortto, you can visualize the entire customer journey and automate messaging across that journey to generate more leads. The proof? Marketers using automation generate twice the number of leads than those using blast tactics.
Your customers want a consistent journey — don't make them frustrated with disconnected experiences (like repeating themselves to customer service representatives).
4. Improve conversions with a sales playbook
When marketing automation software integrates with a CRM, something special happens. The marketing and sales funnel align, silos are smashed, and more leads convert.
Integrating a CRM allows your marketing team to evaluate, score and qualify leads before delivering them to the sales team. This frees up resources and enables teams to manage and assign qualified leads effectively.
A sales playbook journey with an integrated CRM helps customer acquisition for a variety of reasons:
Aligns sales and marketing processes into one efficient customer journey;
Improves user satisfaction with a better customer experience;
Places qualified, sales-ready leads to the front of the queue;
Evenly distributes workloads across sales teams; and
Nurtures leads with retargeting and onboarding messages (depending on whether they've converted or not)
Gives sales teams full context for conversations
Currently, Ortto supports native integrations with Salesforce and Pipedrive. If you're not using either one of those, don't worry, you can still integrate. We support integrations through your choice of Zapier or our integrated API.
5. Set up your nurture journeys
Marketing automation software makes the lead generation process more efficient by allowing you to integrate with CRM platforms like Salesforce and Pipedrive. But generating leads isn't enough by itself and not every business will have a sales team nurturing every single lead.
Marketers need to prioritize what happens after a lead is generated to make the most of their customer acquisition model. This is why lead nurturing is so important — it's the ‘acquire’ part of customer acquisition, gently nudging users towards a conversion.
With Ortto, you can set up an organic lead nurturing journey to educate customers on why they should take the next step with you. Below is an example of a lead nurture email from NerdWallet - it clearly and quickly details some of the platform’s most popular features to further educate the lead and help drive them to conversion.
Whether you’re ecomm, SaaS, B2C, or B2B, lead nurture journeys are essential to educating your lead and pushing them across the conversion line. Remember to focus on personalized, useful messages, using dynamic content fields to give your marketing messages an organic, personalized feel, even when they are automated.
6. Track and optimize towards the metrics that matter
Most businesses are used to tracking open rates, click throughs, and impressions. But the metrics that really matter to your business are things like customer lifetime value, monthly recurring revenue, and return on advertising investment.
Using a business intelligence reporting tool like Ortto, you can answer the tough questions and track exactly what is and isn’t driving lead generation and conversions. With this information, you can continuously optimize your advertising and marketing efforts to generate and convert more leads over time.
The final word
Customer acquisition is an essential part of growing your business, but customer acquisition focussing on identifying, generating, and nurturing quality leads is the best way to ensure your efforts will be rewarded.
By using a platform like Ortto, you can manage this process end-to-end in a single back-end, driving significant growth even with limited resources.