3 Ways to Redesign Your Customer Acquisition Strategy

First, let’s look at the wardrobe staples that make up a typical customer acquisition strategy.

Know Your Audience

Put your customer data to work to identify and segment your audience.

Calculate Your Costs

Balance your budget, determine your ROI, and understand the value of your customers.

Snipp Tip: It can be tough to nail down a customer's average number of purchases. One simple way to get an estimate is to divide the number of purchases made by the number of customers in your database.

Use the Right Channels

It’s not necessarily about being everywhere (but if it is, don’t forget your omnichannel strategy!). Be where your audience wants to see you.

Personalize Your Content

Create engaging content to attract customers and stand out from the competition.

Snipp Tip: Sweepstakes, contests, and promotions are better customer acquisition tactics than discounts. Your audience wants an experience, not a sale.

Retain & Reward

Reward customers for spreading the word. Customers referred by a friend are four times more likely to buy than those who come in cold.

These classic tactics work and will continue to work if deployed effectively. But consumer trends and behavior continue to change.

Today, consumers rely on word of mouth before making a purchase. Third-party review websites such as G2Crowd, Glassdoor, Yelp, etc. give customers easy access to both good and bad reviews. As a result, 81% of customers trust reviews from friends and family over the brand messaging.

Customers Hesitate to Reveal All

Lack of trust goes hand in hand with consumers’ growing hesitation to share personal data. It's now harder and more expensive to get the data you need to improve your customer acquisition strategy. Over two-thirds of retailers say that recent changes made by Apple and Google are making things more difficult. Specifically, there’s a huge impact on customer targeting and acquisition scaling. 

And They Want the Best Experiences Everywhere

Every marketer understands the need for better customer experiences. But they aren't just competing with rivals in their market, but in every market.

Rewards aren’t just about giving customers cool stuff – they’re best done by giving customers more options, instant gratification, tailored offers just for them, an emotional connection, or a sense of fun and adventure.

– John Fauller | EVP, Product and Innovation

Once customers have a great brand experience — even in a potentially different industry — they come to expect the best from every brand interaction, every time. After all, wouldn’t we all like the McDonald’s Speedee Service at the DMV?

As you can see, these challenges create a vicious cycle. No trust means no data, which means subpar experiences, which further erodes trust.

You don’t need to reinvent the wheel to respond to the ever-changing whims of consumers. You just need to put a new spin on an old look. Think of your customer acquisition strategy as Gucci. It’s time to give it the Tom Ford treatment.

1. Embrace Zero-party Data to Understand Your Customers

Using third-party data for customer acquisition is more regulated and more expensive. GDPR and CCPA prohibit brands from using a consumer’s data to market to them without consent, which restricts cookie-based advertising. This limits the effectiveness of paid acquisition channels and makes third-party advertising more expensive.

Fortunately, third-party data isn’t the only option. It’s never been easier to engage and exchange personal data to use in customer acquisition and retention.

Contests and promotions create attractive opportunities for consumers to engage with your brand and share data. Contest emails, for example, have an average open rate of 8.8%, which creates an effective channel for gathering zero-party data in exchange for a reward.

The goal should be to take your understanding of your customer further than what you buy and why. You need to understand the emotional, moral, and spiritual drivers that sit behind those actions. In doing so, you’ll find new opportunities for meaningful customer experiences.

Virgin Red Gets It Right

At first glance, Virgin Red’s understanding of its customers seems surface-level. It’s got a brand identity that targets the young and affluent and boasts: “From caffeine kicks to free cinema flicks, VIP hols and premium tix, we know how to reward you. Earn points every day and spend on the special stuff.”

However, they also understand that younger generations see family, the environment, and societal change as good things. And that brands have an oblig­a­tion to take a stand on envi­ron­men­tal issues.

So, as well as a caffeine kick, Virgin Red members can spend their points donating to charitable causes and investing in their children’s education. Virgin understands that beneath the disposable income and the lust for life, younger people also need to feel like they’re making positive change.

2. Turn Personalization into Individualization

Customer experience has three components: perceptions, attitudes, and behaviors.

• Perceptions:represent the customer’s subjective understanding of their interaction with the company.
• Attitudes:represent the customer’s feelings about their interactions with the company.
• Behaviors:represent how customers behave with the company after their interactions with them.

The best customer experiences personalize each component. But personalization isn’t enough anymore. Customers want brands to build a relationship with them before they make a purchase.

Individualization takes personalization one step further. It uses data to deliver a tailor-made experience in real-time to perfectly match a customer’s immediate need.

This innovation relies on the right mix of technology and infrastructure, including omnichannel solutions that manage customer information across all online and offline channels. So, customers get a seamless experience regardless of which touchpoint they use.

Snipp Tip: Loyalty programs are a great source of zero- and first-party data. These actionable insights allow you to build accurate customer segments and personalize communication and offers.

The Netflix Twist on Personalization

Netflix’s investment in algorithms and audience analytics allows them to offer a unique, on-demand service to every viewer. They cite that there are now “33 million different versions of Netflix.”

A personalized experience would draw on the viewer’s history, compare it to what others watch, and make recommendations – like your average eCommerce recommendation.

But Netflix takes it further.

Everything from the recommendations, the order of search results, and even the title cards you see are specifically presented based on your Netflix experience.

How do they do this? Because they measure everything. And they use that data to create individualized experiences.

3. Make Retention Part of Acquisition

New customer acquisition costs have increased by almost 50% in the past five years. And the longer brands rely on acquisition alone, growth will cost more and more every year. At the same time, engaged and loyal customers are proven to spend regularly and spend more when they do.

If you want to steer the oil tanker that is your marketing away from acquisition, it’s time to move your budget from performance marketing to brand investment.

Yes, it’s very hard to quantify ROI on brand investment and any model you use will result in a crude estimate. But investing in your brand is key to improving customer experience, which allows you to turn happy customers into advocates.

T-Mobile Turns Experience into Acquisition

Customers who refer cellular carrier T-Mobile to their friends can earn up to $50 per friend who purchases a T-Mobile plan and up to $500 per year. Friends, meanwhile, enjoy discounts on their new plans to help encourage the referral process. The multi-referral structure lets current customers earn substantive rewards — this often drives better results than a single, large-payout referral.

T-Mobile’s referral program only works if their customer experience is good enough for customers to stake their reputations on recommending them.

Balancing acquisition and retention is a constant struggle for marketers. A glance at the current trends might lead you to think that retention is the way to go. Restrictions in 3^rd party data usage, rising CAC costs, and the focus on customer experience lead many marketers to believe that retention is more important than acquisition.

Why Existing Customers are an Easier Target

• Existing customers are already familiar with your brand
• They’re more likely to notice marketing activities than non-buyers
• They have more regular touchpoints with your brand
• They’re cheaper to market to

But, you can’t retain customers you don’t have.

The Ehrenberg Bass Institute argues that by focusing on customer acquisition to boost market share, you naturally support customer retention. Marketing tactics aren’t built in isolation and any activity builds and refreshes the mental availability of the brand for both new and existing customers.

Double Jeopardy

In marketing, double jeopardy states that less popular brands have both fewer buyers and fewer loyal customers compared to popular brands. This is relative to market share, so if you aren’t Starbucks, don’t pretend to be. If you’re looking for brand growth, start with customer acquisition.

“No matter how many resources you put into loyalty tactics, it’s challenging to get current customers to buy more of a product/service than they need.”

– Dr Kelly Vaughan and Alicia Barker | Ehrenberg-Bass Institute

Shirts, skirts, jeans, heels – the fundamentals never really go out of style. And every ten years we get a new spin on a classic look. Today, it’s all about customer data and retention. But tomorrow, who knows?

For brands that want to stay ahead, they need to look around as well as forward. Brands like Starbucks and Apple push the envelope for everyone, whether they’re in your market or not. That’s why it’s important to look beyond your direct competitors when developing your customer acquisition strategy.

And since traditional third-party data capture methods are falling by the wayside, brands need to pivot towards zero- and first-party data collection. To attract and retain customers in 2022 and beyond, you need to go further than short-term campaigns. You must take a long-term view that attracts loyal customers willing to share their data because they see value in the relationship.