The goal of every customer acquisition strategy is to attract your target audience and turn them into customers. But, acquiring customers at all costs will impact the profitability and sustainability of your business.
To help balance your customer acquisition costs (CAC), introduce cost-effective strategies that make the most out of every customer interaction through personalization and demonstration of your brand value.
This post will explore four customer acquisition strategies that keep CAC low and allow you to build a sustainable business.
1. Referral Marketing
Contests, nominations, and refer-a-friend programs are all ways to implement referral marketing in your business. Customer-led growth is one of the most cost-effective and sustainable ways to increase your customer base. Because consumers trust their friends and family regarding product recommendations, you can acquire more customers without burning through your marketing budget.
Referral marketing is useful for building loyalty with existing customers and starting new customer relationships on the right foot. Providing referred customers with free shipping or a discount creates a pleasurable experience that keeps them returning. And this increases customer lifetime value (LTV).
According to our Forrester study, brand advocates and referred customers make more frequent and expensive purchases. In fact, their average order value (AOV) is 150% higher than other customers.
Specifically, one clothing retailer noted that the AOV of a referred customer’s first purchase was nearly double that of the rest of their customers. Meanwhile, a home furnishings retailer calculated that referred customers were 9x more valuable than those who came through the website.
How to Utilize Referrals
While referrals are a highly effective customer acquisition strategy, using the right referral marketing software to circumvent common issues is important. You want to avoid manual processes that slow down the marketing team and make it difficult for advocates to refer others.
This is precisely why mattress retailer Amerisleep implemented an automated referral program with Extole. Instead of manually identifying referred customers at checkout, Amerisleep introduced personalized links for advocates to share with friends.
The automated approach made it easy to scale the referral program and attract new customers, generating a 150% referred friend click-through rate.
2. Content Marketing
Content marketing leverages written, visual, and auditory material to engage customers at different stages of the buying journey. Content includes blog posts, e-books, podcasts, webinars, and videos.
Content is a cost-effective customer acquisition strategy because of its longevity.
A blog post, for example, can bring in organic traffic for years after publishing. Placing customer success stories on landing pages will also help convert new customers. Content is also easy to repurpose. A podcast episode can be turned into a blog post, a blog post into a video, etc.
How to Utilize Content Marketing
The top reasons companies use content marketing are to increase website traffic (46%), grow brand awareness (45%), and generate leads (34%), according to a Semrush report.
The same report found that 97% of respondents saw success with their content marketing efforts – important to keep in mind if you’re weighing investing in content.
With content marketing, you capture and convert customers by answering their questions as they go from discovery to purchase.
Consider a SaaS company that offers an email marketing platform. They could write a blog post targeting buyers at the top of the funnel that explains how such platforms work and their benefits. For buyers further down the funnel, case studies would be more helpful to illustrate the platform in action.
3. Social Proof
Social proof helps you acquire more customers by assuring them they’re making the right purchase. If you’re torn between two different pairs of shoes, chances are higher you’ll pick the pair with more reviews.
Reviews, industry awards, and user-generated content (UGC) are just a few examples of social proof to embed in your website. They inspire trust in people who have just discovered your brand and dispel any doubts about your products.
Social proof isn’t just crucial in B2C, though. In B2B, 86% of businesses say verified reviews are critical when buying software.
Like content marketing assets, social proof is easily reusable across different channels. A one-time investment in UGC, for example, will pay off multifold as it continues to increase the conversion rate on your website, social media, etc. You can also use social proof to optimize your referral program.
How to Utilize Social Proof
Businesses place social proof on different parts of their website, including the homepage. But you’re most likely to find it on pages where it has the greatest potential to make an impact, like product pages.
Skincare company Beauty By Earth includes UGC on a product page. It shows potential customers how to use the product and what kind of results to expect.
The product page also includes customer reviews, helping website visitors get all the information they need in one place.
On B2B websites, you’ll often see social proof through various logos representing the company’s customers. (Our platform page is a good example.) You can also do this with any industry awards you’ve won.
4. Email Marketing
Email plays a key role in customer acquisition, whether it’s capturing leads with a gated industry report or offering a discount in exchange for a newsletter subscription. Nearly 90% of marketing leaders say email is essential to their success, alongside being the most effective marketing channel.
With personalization, you will acquire new customers and nurture loyalty – more than half of consumers say that a personalized experience will turn them into repeat buyers.
Effective personalization involves segmenting your customers by location, previous purchases, or other attributes. This allows you to send them tailored offers that lead to more purchases and a higher LTV.
How to Use Personalization in Email Marketing
Email personalization takes many forms, from cross-selling offers to re-engagement emails that activate dormant customers.
The following email by Urban Outfitters lists products the user recently viewed on their website but didn’t purchase or add to their cart. The subject line “Hey, you! We see you scrolling” immediately grabs customers’ attention and alerts them that the email includes personalized content.
Since these types of emails target customers with high purchase intent, you’ll be investing your budget in campaigns that drive a greater ROI and reduce your CAC.
Leverage Customer-Led Growth to Lower CAC
Customer-led growth is the secret to spending less on customer acquisition while attracting more valuable customers.
Referral programs, contests, and influencers use your existing customer base to expand your market presence and reach an audience ready to invest in your products and services.
Extole’s Customer Engagement Platform allows you to easily turn customers into advocates through referral programs. Use the platform to build seamless user experiences on any device, personalize rewards and interactions to customer segments, and track the success of your programs.
Request a demo to see Extole in action and discover why we’ve earned the trust of leading brands in industries from retail to finance.
