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The Challenge of Customer Acquisition

The Challenge of Customer Acquisition

Most organizations like to think that they are reasonably effective at acquiring customers but for a startup or early stage business the ability to do this quickly or well enough may well be a matter of life and death (not to mention making sure they do so at a cost of acquisition that is lower than the revenues that are produced by the effort).

At its most simple level, customer acquisition is the process of acquiring new customers or more effectively converting prospects into new customers. Naturally, the level of difficulty involved in acquiring new customers varies greatly according to the industry and specific business situation of an organization. For example, some businesses may be all about acquiring customers for an online business and using mostly online methods to do so, while others are more concerned with more traditional acquisition methods for a traditional “bricks and mortar” type business in which the new customer has to “walk through the door” in order to buy. However, in most circumstances, the process has many similarities in being mainly concerned with issues like:

  • using methods or approaches which reach as many customers as possible,
  • utilizing multiple channels to effect an ultimate acquisition,
  • effectively acquiring customers at the lowest possible cost,
  • acquiring customers who will be repeat buyers.

Given the above, it is important for every business to think carefully about the following issues:

  • Who is our real customer target or niche upon which we should focus?
  • How do these customers see us as a business (if they know us at all)?
  • What knowledge levels do target customers tend to have about products/services such as ours?
  • What is the thinking or psychology of our target customers about using products and services like the ones we supply?
  • What are the features and benefits of products/services such as ours that customers value the most?
  • How are target customers typically influenced about buying decisions?
  • What pricing expectations do target customers tend to have?
  • How long does the buying process/cycle tend to be for products/services such as ours?
  • What sources of information/validation do target customers tend to trust the most in making engagement and buy decisions?
  • What marketing channels do our competitors tend to use to acquire new customers and why? 

In summary then, we can say that successfully acquiring a new customer depends heavily on how effectively the organization is able to identify the right customer segments or niches (through careful research and planning) and then in building a good relationship with those customers. 

All of the above being said, customer acquisition is difficult at the best of times and crucial for an early stage or young business who will easily burn through cash reserves unless their efforts to do this well and profitably are successful. Having the right strategy to acquire the right customers is therefore extremely important and considerable time and effort needs to be given to this issue at the earliest possible stage. So what particular strategies might we consider? – here are 10 you can use (and note that the first five are preparation/research/planning steps and the last five are action steps): 

1. Discover who your Customer Really is.

Your business can have a unique proposition, excellent web site landing pages, and customer support ready to handle any questions, but pitching to the wrong groups, will make all that effort a complete waste of time. This can be overcome in a number of methods. The most widely used are:

  • Ask/poll your current clients and make up portfolios about them. In other words, divide customers into groups and see who the ideal ones are.
  • Brainstorm and visualize the clients you believe will be most interested in your product or service online. This will help shape your marketing strategy, website design, advertising messages, banners, slogans and overall better cater to each of your customer expectations.
  • Test, Test, Test – Few organizations get this right but solid research is the key to success. You need to be ready to do A/B testing, and a lot of it, to make sure you are reaching the right customers. 

2. Understanding the Customer on a macro and micro level.

Creating a proxy or “persona” for the individuals who make up your target market is a great way to understand your audience at the macro-level. Important questions in doing this are “Who are they?” “How do they see products/services like yours?” “What influences them?” “What is their motivation?” “What are their aspirations?” “What do they worry most about?” etc.

3. Identification and assessment of your Target Audience.

If you do not properly identify, assess and carefully profile your target audience, by using all of the approaches suggested above, everything you do afterward is wasted effort and money as you try to reach the wrong audience with the wrong message and the wrong tactics. Once you have therefore collected your broad customer data (including their demographic and psychographic information), you can then start to put together target audience profiles to truly flesh out the characteristics and desires of your audience and use the information to develop basic messaging points that will carry through to all of your marketing communications. 

4. Building an Effective Measurement System.

“If you can’t measure the output of your marketing and sales campaigns, you can’t improve it or know whether or not it worked. Every campaign should therefore have clear measurability techniques laid out early on. Over a period of time, you’ll build up more experience and confidence in your ability to plan and predict results. The end goal is that you’ll have a clear picture for each individual marketing channel or medium of how many people you can reach, how many enquiries you might generate and how many you can convert to a sale. You will know your most cost-effective media in terms of cost per acquisition, and look to use the most cost-effective ones first. And don’t forget, common mistakes besides not having metrics at all are having the wrong metrics, too many metrics, or metrics that are impossible to accurately track. 

5. Calculating the Life-Time Value (LTV) of the Customer.

Perhaps the single most important metric of a successful customer acquisition strategy is the lifetime value (LTV for short) of the acquired user. In simple terms this is how much revenue does the customer you acquire produce for the organization or particular brand over a given period of time. This then allows you to not only see whether or not your acquisition costs are reasonable in the circumstances but also calculate what return on investment each acquisition channel is producing. 

6. Evolving a Clear and Consistent Message and Content Sharing Strategy.

Next to have a truly remarkable product or service, and clear metrics to measure your marketing efforts, comes a clear, consistent, and compelling message at all levels (including not only traditional marketing promotions but in blog posts, white papers, checklists, buying guides, etc. Message should be highly targeted and consistent throughout every channel within the acquisition strategy. Although they will clearly vary greatly in one situation to the next a common need is that the message used should convey to a target why should they be interested in as short or “pithy” a way as possible. 

7. Establishing a Long-term Brand Identity.

In a few instances, marketing to the wrong demographic may give you some short-term hits or website views (and therefore a few customer acquisitions) but this only leads to very short-term organization benefits. It is far better to take a long-term brand building emphasis and to therefore always try to focus your efforts to the right demographic that will not only be more interested in your value proposition but will return to your business again and again (and evolve a strong sense of brand loyalty. 

8. Utilizing a Multi-Channel customer acquisition strategy.

One of the best ways to attract customers to your organization is with a multi-channel customer acquisition strategy.  For example, if companies want to stand out from the competition, they can start to collect customer data more efficiently, from all relevant channels so they can see whether or not the needs are the same or different and what alternative messaging tactics they may use more successfully in the future. But, more importantly, they can also begin to effect changes and improvements to the customer experience in each channel based on these data insights, including providing slight variations of message in each channel.

9. Building Long Term Trust.

People have a strong inclination to follow peer advice when they can get it – or in the case of sales – make a purchase from someone who they feel they can trust. This is why many successful business use testimonials (both written and video based) and reviews of products and services (with organizations such as Amazon and other online retailers doing this extremely well). This all helps to build confidence and trust (albeit it is a slow process). However, such trust building is well worth the time of investment because what you get back out is a loyalty that can’t be purchased.

10. Establishing Scalability in your Approach.

If your user acquisition strategy is not increasingly scalable (or extendable to many more customers than your initial target set at a similar or even lesser cost) then you’ll have to keep exerting considerable effort and spend more money than you might like in order to acquire customers at scale. A scalable user acquisition strategy therefore (such as using targeted content marketing methods and SEO/SEM techniques) is one of the best ways that you can generate perpetual traffic and acquire users in the most cost effective way possible at small, medium and large customer population levels.

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About Dr. Jon Warner

Dr. Jon Warner is a prolific author, management consultant and executive coach with over 25 years experience. He has an MBA and a PhD in Organizational Psychology. Jon can be reached at

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About the Editor and Primary Author

Jon Warner

Jon Warner is an executive coach and management consultant and in the past has been a CEO in three very different companies. Read more

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