customer acquisition case study

High Value Customer Acquisition Case Study [With Dylan’s Candy Bar]

How dylan’s achieved greater engagement, loyalty & profits, sweet results.

Executive Summary

• In this Case Study, we’ll cover how Dylan’s implemented BuyerGenomics’ Predictive Marketing Automation (PMA) platform to solve problems that traditionally takes months, in a matter of days . As a result, Dylan’s time, energy, and investment was focused on taking action and generating conversions .
• Mike Ferranti and Kevin Cohen discussed and illustrated how the Best Customers You Have Today are actually the root of The Answer to Acquiring Net New Customers that not only spend more , but more often than the rest.
• Cohen elaborated on specifically how Dylan’s developed a dramatically deeper view and understanding of the customer, developed new unique cohorts that explained the heterogeneity that existed in their customer base, and identified in high resolution who their Most Valuable Buyers really were — which then drove the target definition of for net new customers.

Table of Contents

• The Business Situation –  While Dylan’s was generating high consumer traffic, they lacked the high-value, repeat buyers that would drive their business.
• The Approach  – BuyerGenomics designed an intelligent, actionable data-driven campaign that specifically targeted net new customers who spent most like the best of their current base.
•  Our Methodology  – Within just three weeks, Dylan’s was able to generate a clear view of its customer base and implement a \”Buy-A-Like\” acquisition campaign.
• The Solution  – A multi-step omni-channel campaign was used to reach the right customers, at the right place, at the right time – driving engagement and understanding the motivating factors that led customers to purchase.
• The Results  – Dylan’s experienced massive increases in new valuable customer acquisition, conversion rate, average spend, and repeat purchase rate.
• The Future  – Dylan’s continues to grow as a vibrant, dynamic business, and BuyerGenomics continues to support Dylan’s growing high-value customer acquisition campaign.

Did Dylan’s Have a Problem Worth Solving?

The Business Situation: High Consumer Traffic & Trial, Low Customer Loyalty

Dylan’s one-time buyers: high traffic, low customer loyalty.

Dylan’s One-Time Buyers: High Consumer Traffic, Low Customer Loyalty (Cont’d)

The Approach: BuyerGenomics Buy-A-like Acquisition

BuyerGenomics’ Strategy

• Launch a customer intelligence platform on BuyerGenomics to rapidly enable the accurate quantification and targeting of high-value opportunities.
• Launch a targeted prospecting campaign that utilized the most advanced forms of customer intelligence, machine intelligence, and automation.
• Shift the mix of net new customers to those who spend more and are more likely to become repeat customers.
• Implement a multi-channel approach.

Our Methodology: The 70, 20, 10 Axiom

“70% of the marketers success comes from getting the target right, 20% of success comes from getting the offer right, and 10% comes from getting the creative right.”

Rapidly Produce Highly Actionable Customer Intelligence

• The range of available intelligence and insights we have available is truly astounding, relative to all previous experience. We know exactly who our MVB really is, and we don’t rely on anecdotal narratives like we used to.
• Cohen provided examples of demographics, psychographics, lifestyles, purchasing behaviors, channel behaviors, predictive analytics, and much more.
• Who is the customer?
• How should we talk to them?
• How to engage them over time?
• How to avoid stagnation and increase repeat purchases? (Today, 1-time buyers make up the bulk of customers)
• How to build the direct to consumer relationship?
• How to drive in-store retail traffic?

Rapidly Create Actionable Loyalty Measures

Discern What Makes the Customers More or Less Homogeneous

Move From Initial Data Capture to “Buy-A-Like” Acquisition in Three Weeks

• Centralize online and offline data.
• Create a 360 degree view of the customer.
• Perform optimal target intelligence to define the MVB.
• Match the target with Buy-A-like targeting to acquire high potential new customers.

Buy-A-Like Targeting

Buy-A-Like Targeting (Cont’d)

The Solution: Omnichannel Campaigns “Surround” Buy-A-Like Prospects

Omnichannel Campaigning – Drive Response and Understand Motivations for Responders & Converters

Design Direct Mail Creatives [That Worked]

The Results: Sweet Success

The Numbers Behind Dylan’s Scaling of Profitable Customer Acquisition

• 145% of New “Most Valuable Buyers” acquired vs. Goal.
• Over 225% Conversion Improvement (on 30% of Investment).
• Over 50% Increase in Average Spend.
• Over 63% Increase in Repeat Purchase Rate.

How Dylan’s Can Scale Up High Value Customer Acquisition

How Dylan’s is Scaling Profitable Customer Acquisition

The Future: Just Desserts

Next Steps: Autonomously Grow Lifetime Value and Profit with Machine Intelligence

• Prospects – Not yet customers, signed up for an email newsletter, etc.
• Actives – Individuals currently engaged and/or spending with you.
• In Market – Buyers currently shopping for your products and are prepared/likely to buy again.
• Faders – Subjects no longer purchasing at the rate their customer profile suggests they can.
• At Risk – Buyers most likely to stop spending with your brand and fall into attrition.
• Inactives – Customers who have ceased purchasing your products.

Conclusions 

Recent posts.

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What meta advertising is best for driving sales growth, unlocking customer sentiment: buyergenomics’ heartbeat revolutionizes insights.

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The full price customer: how to get & keep them, one-time buyers: the biggest retention problem in retail commerce.

3 Critical Priorities for New CMO’s

8 marketing tasks that can be automated (save time and get strategic with marketing automation).

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Reveal your true customer & drive growth..

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Business growth

Business tips

An exhaustive guide to customer acquisition strategy (with 13 examples)

Anyone who's lived in the high desert knows that weeds are no joke out here. Even though I'm a die-hard DIYer, I recently succumbed to hiring a neighborhood kid—I'll call him Dave—to rid my backyard of them. 

When Dave posted flyers all over the neighborhood at the start of spring, I took the opportunity. The negotiable rate, mission to save for college, and cheery headshot complete with gardening tools and disposable surgical mask promised this would be safe, quality work for a good cause—all at value pricing.

What this industrious adolescent understood intuitively is the core of good business: a strong customer acquisition strategy that identifies a market, an opportunity, and a product tailored to both. Here's how to take a page from Dave's book and build an effective game plan for bringing in a sustainable stream of customers.

Table of contents:

Benefits of building a strong customer acquisition strategy

What is customer acquisition marketing, what is the customer acquisition funnel, how to choose your customer acquisition channels, 13 customer acquisition strategy examples.

How to calculate customer acquisition cost

How to keep customer acquisition costs down

How to retain customers

Automate your customer acquisition strategies

What is customer acquisition.

Customer acquisition is the process of gaining prospective customers, nurturing them into leads, and then converting them into buyers. This flow, known as the customer acquisition funnel, has five phases: awareness , interest , consideration , conversion , and retention . 

This strategy isn't to be confused with general branding and marketing tactics—those are parts of the process, but they aren't the whole thing. Customer acquisition is about a refined, thoroughly researched approach to identifying markets and actively moving potential customers down a sales pipeline . 

In the example above, Dave was effective at acquiring customers because he had a strategy: offer homeowners a bad-back-saving service during peak weed-picking season. His flyers turned nearby homeowners into prospects, those prospects became leads when they texted him, and he was ultimately able to convert leads (like me) by selling us services we (or at least our backs) needed.

Customer acquisition doesn't just happen on its own—the "if you build it, they will come" approach only worked in Field of Dreams because Kevin Costner had the help of baseball-playing ghosts. (I haven't seen this movie in over a decade, so don't fact-check me.) 

In the real world, you need to proactively bring in leads. This kind of intention can bring benefits like:

Improved ROI: Targeted campaigns for customer acquisition allow you to focus on the campaigns, markets, and channels with the highest value and conversion rates. 

Resource optimization: A defined strategy allows you to budget resources for predetermined tasks and campaigns. Over time, you'll see which acquisition channels are the most effective, allowing you to cut resources from the ones that aren't working.

Measurable progress: Because customer acquisition sets clear values on leads and conversions by corresponding directly to sales information, you can readily put real dollar amounts on successes and failures.

Visibility: As you nurture leads through the acquisition process, you can see where you're losing them in real time.

Sustainable growth: As you identify the acquisition strategies that work best, you can replicate them across products to steadily increase ROI.

Lower churn rates: Once you effectively and systematically acquire customers, you can perfect retention efforts. This allows you to proactively turn one-time customers into return customers—not just hope it happens on its own.

Visibility: The data you gain from monitoring customer acquisition campaigns shows you a massive amount of detail about your market and customers' buying behaviors.

Customer acquisition marketing refers to marketing tactics that are intentionally geared toward converting current leads into customers. This differs from other forms of marketing because it involves strategically appealing to targeted potential customers with the end goal of progressing them through a predetermined acquisition funnel.

Traditional marketing plays a significant role in customer acquisition. It's how you build brand awareness , get your products and services in front of the eyes of potential customers, and grow a pool of leads .

The customer acquisition funnel refers to the general set of phases a potential buyer progresses through, from first impression through conversion. Another way of visualizing the CX lifecycle, this customer journey framework caters more to the business perspective of proactive lead targeting. 

If you picture an actual funnel, those phases can be broken down into five milestones, going from the wide opening down to the skinny spout:

Awareness: The first phase in customer acquisition is building awareness for your brand, product, or service. This can be done through traditional marketing and publicity campaigns to build a preliminary pool of potential leads.

Interest: Not everyone who knows about your offering will find it relevant or be in a position to think about buying it. Those who do find it relevant to their needs or desires will become interested, making them leads.

Consideration: Leads with an interest in your offering who are theoretically ready and able to buy then move into the consideration phase. There'll be comparatively fewer leads here than at the start of the funnel, but at this point, they're nearly ready to purchase.

Conversion: Those who follow through with the purchase convert from leads into customers. This is obviously the primary goal, but it's still not the ideal end of their journey.

Retention: Satisfied buyers who stay interested in your products or services can then be retained so they continue buying from you. 

Here's what that funnel looks like for Dave and his yard services:

Dave builds awareness for his services by distributing flyers around a neighborhood primarily made up of middle-income homeowners.

By targeting homeowners with yards as the temperatures rise along with the grass and weeds, Dave generates interest .

As the weeds continue growing, the days get longer, and the mosquitoes start multiplying, interested leads start considering Dave's yard services.

Leads who get a quote convert when they pay Dave to come clean up their yards.

Dave retains customers when they see their weeds coming back during monsoon season when it's 101 degrees.

To acquire new customers, you need to be able to reach them on the right channels. This helps you define your market, refine your outreach strategies, and meet potential customers where they are. 

Those channels can be broken down into two main types.

Digital channels: These will probably apply to just about every major business, while digital-first offerings like SaaS or cloud products may exclusively operate here. Common examples of these channels include:

Social media

Influencers

Newsletters

Pay-per-click (PPC)

Traditional channels: While these can seem most applicable to physical or geographically-specific offerings like automobiles or yard services, many digital products can still gain a lot of traction from non-digital channels like:

Pop-up shops

Trade shows

Guerilla marketing

Physical advertising

Partnerships

How do you know which ones are right for you and your potential customers? Start by following these four steps.

1. Audit your current channels

As someone wise (probably) once said, you can't know where you're going until you see where you're standing. In this case, that means taking stock of all your current channels.

Start by listing out all the places where you interact with customers or where they have touchpoints with you in some way. Include everything from your Instagram feed, blog, and Facebook ads to your annual trade show schedule, billboard advertisements, and Google Business profile. You may need to poll team members across sales, marketing, and even IT departments to get the full picture here.

Once you've listed your channels, compile performance metrics, so you can evaluate how active you are on these channels and how successful your efforts have been. Without getting too granular, here are some common metrics you can start with:

Conversions and conversion rates

Clicks and click-through rates

Impressions

Time on page/site

Operational expenses

Obviously, the metrics you use will vary widely by channel. The main thing is to get a holistic view of your current acquisition channels, so you can see where your resources are and aren't going.

2. Define your market

Knowing how to reach your market means first knowing who's part of it. Customer demographics and buying habits can have a huge influence on where they spend their time and attention, which in turn can tell you where they're likely to interact with businesses and find products. 

Again, this is a very nuanced step in the process that can take a lot of time and involve multiple teams. Depending on where your product is in the sales process, your marketing, sales, and product teams may have already done much of this work. These processes can help you define your market:

Create detailed customer profiles .

Develop user personas .

Perform a competitive analysis .

Explore existing third-party market studies .

Find public demographic data from government agencies.

Map customer journeys .

Initiate your own market research through surveys, focus groups, or customer interviews.

Like other steps in this process, this is a cross-functional (and potentially time-consuming) one. But it's well worth it to know everything you can about who you're trying to reach.

3. Identify which channels they use

It's probably not a great strategy to just start blasting your Twitter/X feed with promotional content because it's the only social media outlet you use. Rather than risk shouting into the void, you should be sure that there are real, engaged customers on the other end of it.

This is where your research in the last step comes into play. For example, a SaaS company may find that the busy, mid-career executive decision-makers they market to get recommendations from industry leaders on LinkedIn or conference panels. Meanwhile, a provider of trendy, nontoxic kitchenware should know that the stay-at-home middle-income parents they sell to get a lot of their cooking tips from influencers on TikTok and YouTube.

Data about which channels your potential customers use should come from market research, but here are some general tips on how you can find out which ones are important for reaching them:

Monitor where your competitors dedicate social media, advertising, and promotional resources.

Conduct customer surveys.

Search relevant hashtags across social media outlets.

Explore your own website analytics to see which sources drive your traffic.

A/B test campaigns across multiple channels.

Read through Reddit threads related to your industry or competitors to see which channels they commonly mention.

Use keyword research to see which channels are brought up alongside search terms that are relevant to your product.

Look up Google Trends data on key terms related to your product and industry to see what potential customers are interested in.

Remember that trends in channel usage can change quickly. Reports, anecdotal experience, and campaigns that are just a few years old could be completely out of date today. If you can identify trends in your market's behavior and plan around them before your competitors catch on, you could create a major competitive advantage. 

4. Decide which channels are viable for you

Once you know who your market is and which channels they actively look to for product inspiration, you can combine each of the three steps above to find out how to adjust your efforts. Ideally, your Venn diagram will show that your market's channels overlap with many of yours. Even if it doesn't, the information should be illuminating about where you should look to grow your presence.

Keep in mind that this data doesn't have to be 100% prescriptive. For example, it may not make sense for a virtual legal services upstart to try to compete with giant law firms' localized network advertising campaigns since they have no name recognition or physical offices. Meanwhile, a growing funeral services provider might find that their competitors aren't active on Instagram, but creating tastefully funny Reels aligns with their unique angle of bringing levity to their market of older millennials with aging parents.

Deciding on channels is one part data, one part art. Your research from the previous steps should give you a real idea of what the norm is for your market and industry. That data may also point to trends that haven't actualized yet; now that we all accept TikTok's explosive growth, we can see the writing was on the walls in 2019 when people had an insatiable appetite for short, candid, personal video clips and synchronized dancing.

Having a baseline about what your potential customers expect can't tell you what makes sense for your product, brand, growth goals, and unique selling point. You'll also need to consider factors like these before you dive blindly into every channel your competitors and market use: 

Marketing budget

Level of brand awareness or industry authority

Marketing personnel and bandwidth

Alignment with broader company goals or timelines

Time to value for efforts in each specific channel

Cost to keep up with established competitors

Scalability

Any potential regulatory or compliance obstacles

Remember that any channel will take time and planning to see through to success, but the last thing you want to do is waste valuable resources on channels that don't come to fruition soon enough. Before you make any decisions, set specific goals for each channel so you can measure success over time and be sure you've made the right choices.

You know your market, you've got your channels, and you're ready to start moving all those customers along the acquisition funnel—now it's time to plan your campaigns. 

Consider these customer acquisition strategies from across channel types to find and convert new leads.

1. Content marketing

Content marketing takes many forms: blog posts, infographics, videos, white papers, original survey data, and podcasts. All of these can play a role in customer acquisition. 

What's great about content marketing is that it gives everybody value. Users get information or entertainment (and if you're really doing it well , both), often for free. Meanwhile, marketers get to publicize a product, build brand awareness, create a definable touchpoint for creating leads, and monitor lead conversions. On the back end, marketing teams can track user behavior and create systems of content that naturally progress toward high-value actions like newsletter sign-ups, free trials, consultation scheduling, or product demo requests. They can then assign a real dollar value to those actions to get hard data on how successful their content is.

Case in point: you're looking at it. 

In case you haven't noticed, Zapier , whose blog you're on right now, is a strong proponent of content marketing. Each article on the blog goes through rigorous research and quality assurance, so end users get industry-leading tips, insights, guides, app comparisons, productivity inspiration, and templates—all of which either directly or tangentially relate to Zapier's product. 

2. Search engine optimization (SEO)

For many businesses, their website is the foundation of the customer acquisition journey. It's where people become leads and where leads convert to customers. SEO thus goes hand in hand with many other customer acquisition strategies—especially content marketing.

SEO is intended to help your site rank higher on search engine result pages (SERPs), which means that sound SEO strategies help your content marketing efforts (and vice versa). SEO goes beyond just optimizing the copy with keywords, organizing the page structure so it's user-friendly, and filling in the metadata so it's optimized for crawling. It also means setting up your entire website—from the domain/subdomain structure to the navigation menu to the loading speed—for optimal user experience.

If you search for your general product or service type, chances are the first result in the SERP has top-notch SEO execution. For example, when I search Google for "basketball shoes," it's no surprise that Nike.com's basketball shoes page pops up first. 

This is a site with a ton of products, images, and pages, and it still loads before I can say "Air Jordan XXXVIII Fundamental" three times fast. The URL of its Mens Basketball Shoes page doesn't have a ton of unnecessary categories or subdomains, the top nav has six simple options, and there are no distracting pop-ups or fancy effects detracting from my user experience. The title tag and description are concise and clearly optimized for the keyword "men's basketball shoes" without getting all keyword stuffy.

At the bottom of the page, below all the beautiful sneakers, there's even a "Related Stories" section to keep sneakerheads moving through the website. Featuring product launch details, news, and buying guides like "The Top 5 Nike Gifts for Teen Boys," its (also clearly keyword-optimized) content pages support its shop pages by directing traffic back to relevant product lines. By keeping its SEO game as tight and clean as a pair of brand-new Jordans, Nike can draw general, brand-agnostic customers to its website before competitors have a chance to do the same.

3. Social advertising

The strength of social media advertising is precision. Once you know which platforms your market uses, you can zero in on exactly who you want to reach based on demographic info like age, interests, location, and even online behavior. If you sell automotive accessories, you can home in on users who like cars. If you sell image editing software, you can display your ad only to people listed as graphic designers.

Another perk to social advertising is that you can see what's working (or isn't) in real time. Each platform 's ad hub should show you updated data on impressions, clicks, conversions, and engagement so you can fine-tune your messaging at a moment's notice. If something's not clicking, you can switch things up and see the impact right away. Or, you can A/B test across demographics or platforms to see where your money is best spent.

To illustrate, let's get meta: LinkedIn doing LinkedIn advertising on LinkedIn. 

If anyone knows who uses LinkedIn and how to market to them, it's…LinkedIn. While many types of people use the channel, it's clear that the ad is targeting the ones who actually have the need (and funds) to execute long-term campaigns. High-level decision-makers who oversee B2B relationships can see this through the ad, too. The value proposition is clear (build your brand), and so is the call to action (advertise to over 900 million professionals) with no wasted words or images. It gets down to business because that's exactly what its audience is on the website to do. 

The link goes to a LinkedIn Business Solutions landing page for the B2BUILD campaign, where users-turned-leads are walked through the advertising hub. On the back end, LinkedIn's marketing team can see how users who land on the page interact with it to find where they're losing leads, the rate at which leads convert into customers, and data for calculating the return on their advertising investment.

4. Pay-per-click (PPC) search advertising

Pay-per-click advertisements are the little ads that pop up in various spots within search results that relate to your search query. 

Like social media advertising, PPC advertising has the benefit of being able to target leads. You also only pay when a potential lead actually becomes a real lead by clicking your ad. Within your ad hub, you can see how your ads are ranking compared to competitors', how many total impressions they're getting, and how often they're getting clicks. By setting up dedicated landing pages to link these ads to, you can even track the exact conversion rates of leads who arrive via your PPC ad.

With this level of analytical detail, you get real proof of how effectively you're both acquiring leads and converting them into customers.

For successful campaigns, you can justify increased spend with real dollar values. If you detect low lead acquisition rates, you can easily A/B test your creative and target keywords, try new keywords, or increase your budget. If you're getting plenty of clicks but are seeing low conversion rates, you might change your landing page, add more CTAs , A/B test copy, or tweak the page and structure. 

To illustrate, here's how Article stuck out for the search term "leather couch":

Visually, this was the first result I noticed in the carousel of PPC competitors. In half a second, I see an attractive couch that stands out, I know what it costs, and I know buyers like it, which is essential since I can't give it a nap test first.

5. Referral programs

Generations of sales teams have used referral programs to acquire customers, and there's a reason they're still in use: they work. The beauty of a referral program is that  it taps into the resource of existing satisfied customers, setting up a quid pro quo for them to bring in new customers or users.

The specific incentives depend on what you're offering, but typically come in the form of one or more of these:

Discount codes

Account deposits

Free trials

Free subscription periods

Promotional points

Free services 

Free upgrades

A prime example is fee-free stock trading platform Robinhood, which offers current users a free stock for referring new users, who also get a free stock. 

This incentive is clever for two reasons: it aligns with Robinhood's offering and it encourages repeat referrals. According to the company's referral program guide , the cash value of the stock users get could be between $5 and $200. That means users see "$5" and think "free Tesla stock." When they likely get a single share of a stock they've never heard of that will hopefully appreciate by $0.50 in two years, they may feel compelled to keep up referrals for the chance at a high-value stock. 

In the meantime, Robinhood benefits because it's acquired more vested users who are now depositing money into their accounts to buy the next big stock du jour. And since stocks are typically long-term investments, it hooks long-term users, who have more time to continue depositing and referring more new users. It's technically a win-win, but I get the feeling Robinhood wins more than most users. 

6. Partnerships

Need to acquire customers from a market segment that's been totally out of reach? Partnerships can help you do that. This win-win scenario allows your business to benefit from the name recognition and audience of a non-competitor related to your industry while giving them a way to do the same.

Home lifestyle brand Williams Sonoma has been very effective in choosing partnerships, especially in its family brands dedicated to kids. One such partnership is West Elm Kids and National Geographic. 

This partnership helps National Geographic expand into a sector (home goods) it has no access to while giving several benefits to West Elm Kids, like promotion of its commitment to sustainability, which aligns with NatGeo's audience's interest in the environment.

Anyone who's ever made a collage in elementary school knows NatGeo has long been a fixture of American public education. Meanwhile, anyone who's ever bought toys, linens, and decor for kids knows that anything considered remotely educational gets a bump in parent approval ratings. A smart partnership (smartnership?) like this gives businesses like West Elm Kids a new avenue for acquiring customers that aligns with and expands its current market.

7. Webinars and workshops

Nobody knows your industry and product like you do. Sharing your knowledge with your market through free live webinars and workshops allows you to:

Home in on people in your market who are already hypothetically interested in your offering (who are now also pre-educated about its benefits)

Differentiate from competitors

Build trust with potential leads by showing your expertise, expressing empathy for pain points , and putting a human face to the brand

Build brand recognition by making a lasting impression

Collect marketing data like contact information

Qualify potential leads with more information

Position your offering as a solution to common problems your market faces

Learn more about people in your market by interacting with them

Piggy-back with additional research like surveys or interviews

Airtable, which offers a low-code app-building platform, does a great job of using this approach by hosting instructional webinars about topics related to its software's use cases. 

By educating the public on product features and broader subjects like product planning, workflow management, consumer behavior, and digital marketing through webinars, Airtable can give thought leadership on in-demand issues and then tie in its own product seamlessly. This allows the company to acquire high-value leads that are much more likely to become customers.

8. Influencer marketing

Scrolling TikTok, Instagram, or YouTube for literally any amount of time shows what makes influencer marketing so potent: even if these loosely veiled product placements littering your feed are a form of paid advertising, they still feel like carefully vetted recommendations from real, down-to-earth, not incentivized human beings. 

Rather than carefully polished commercials playing on repeat, you're seeing interesting people excitedly telling you about how much they love a product. Once you see three or four of these over the course of a couple days, it starts to build the FOMO .

From a marketing point of view, this is hugely valuable. This is a genuine word-of-mouth product promotion you can pay for. While high-level influencers with millions of followers may charge for their services, smaller influencers will make videos for the cost of one free product or software license. Even amateur influencers' reviews could be read or seen by thousands of people, which is still a really strong return on a very minimal spend. 

Here's what I'm talking about.

@coffeelicker No more looking like a turtle 🐢. Check it out at brevite.co/coffeelicker — #ad #camerabag #brevite #photography #filmmaking #cameragear @brevite ♬ original sound - Herman Huang

Herman Huang (@coffeelicker) is a creator whose content focuses on videography. This makes him a perfect paid partner (note the designation below the caption) for Brevitē, manufacturer of the multifunctional camera bag featured in the video pictured above. This video is nestled into his library of editing tips, software guides, and craft tutorials. As you're scrolling through original, non-sponsored content, it feels like just another original, non-sponsored video that happens to recommend a product.

With just over 7,000 followers, Herman was probably a relatively low-cost partner compared to celebrities or career influencers. However, he was a very targeted one with a dedicated following of exactly the kinds of people who would buy a Brevitē bag. Reaching out to creators like him (which the company's feed shows me it does often) allows Brevitē to reach highly targeted audiences with user-created content.

9. Email marketing

The great thing about using email marketing for customer acquisition is that it can be used in conjunction with many of the other strategies on this list. Free webinars, for example, can be used to generate new sign-ups for your newsletter, which can repurpose content created for your search-optimized website.

Typically, new customers will need to be incentivized to opt into your email campaigns with freebies like trials, white papers, reports, or demos. By keeping these leads engaged with your offering through your newsletter or pre-written drip campaigns , you can stay top of mind until they decide to make a purchase.

Going (formerly Scott's Cheap Flights) is a master of this—in fact, its business model is centered around email.

Going sends its free users like me cheap flight deals from all around the world. These are flights I wouldn't necessarily think to look up on my own, so it's fun to see them appear in my inbox periodically, so I can suddenly feel like I have the option to take an impromptu trip to Puerto Rico. 

These emails are also vehicles for Going to sell its premium service—which, if I wanted a more bespoke cheap travel recommendation experience, I may be willing to pony up for. It also allows the company to advertise sponsors like Babbel, a language-learning app that's an obvious choice for an audience of international travelers.

10. Free trials or freemium models

I don't know who said it or where I heard it, but there's an adage I think about often: if something is free, you're the product. Free trials prove that to be true for sales teams.

But the saying is a little harsh in its cynicism. By offering potential customers a free trial of your product or a stripped-down freemium model, you do give them real value—either the free offering is all they need and they get to save money on something they would have paid for, or they get to test drive it before they buy. And from a sales perspective, both outcomes can be valuable.

The cable replacement streaming service Fubo is a prime example. 

When I wanted to watch the Oscars this year, I realized the only way to watch it was to have a live TV subscription. The red carpet had already started, and I was running out of options because I hadn't had access to cable in about a decade. It turned out Fubo was one of the only streaming options with a free seven-day trial, which I started up just in time to catch Pedro Pascal being charming in a double-breasted Zegna suit. 

11. Gated resources

When you have gated content on your website, you ensure the only way users can access it is by taking a step like entering their contact information to create an account or receive it via email. These contacts are extremely valuable because you know they fall within your target market and have enough interest to go out of their way for your resource. It also positions you as a trusted authority, giving you an edge over your competitors.

Once you have these contact details, you can proceed with other customer acquisition campaigns, like email campaigns containing free trials, discounts, product advertisements, and other offerings.

The key here is that it has to be truly premium content that goes above and beyond what's freely available on other blogs or websites around the web. Think proprietary information like case studies and survey data or high-level content like long-form eBooks, detailed white papers, or meticulously crafted templates.

Industry research provider IBISWorld has built its whole business on this model. 

Good market research is hard to come by, and IBISWorld has it in spades—if you're willing to pay for it. However, interested users can start with a free trial report from an industry of their choice. It may not include the exact information they're looking for, but it gives a clear picture of the quality of data customers can expect. 

To get that free sample report, you have to sign up using your work email and company name. (This no doubt contributes in some way to more proprietary data.) Once you do that, you may get your sample report and move on with your life, but IBISWorld can continue marketing its reports to you for as long as you keep them out of your junk folder. So even if you don't buy the full version of that report, you'll be more likely to come back to the company the next time you need premium industry data.

12. Customer reviews and testimonials

Once a lead becomes a happy customer, it doesn't have to be the end of the road for either of you. I'm not just talking about retaining them for repeat purchases (more on that later )—I'm talking about using their experience to bring in new customers.

These days, I buy almost nothing without checking reviews first, and with so much competition out there, your customers are probably the same way. Encouraging your buyers to leave reviews or create testimonials can be a great way to both improve their loyalty to your brand and improve overall acquisition rates. Similar to influencer marketing, these written or recorded reviews show potential customers what real customers love about your offering by highlighting the features that really matter to them.

To encourage reviews, it can be worthwhile to incentivize customers with perks like discount codes or freebies. I know from experience because Rainpoint, a company I bought a watering timer from, told me it'd send me a free upgraded timer if I left a review.

Did I like my watering timer enough to leave it five stars? Yes. Would I have left a review if I didn't have the prospect of getting another free one for doing it? No. What RainPoint understood is that authentic reviews from satisfied customers are worth their weight in digital outdoor faucet apparatuses. 

If I hated the timer, obviously a free one wouldn't have changed my mind, so I wouldn't have left a dishonest five-star review. RainPoint's hope is that for the production cost of a handful of products, it can get enough positive reviews to beat competitors in Amazon's algorithm and sell to new customers on the strength of an impressive near-five-star product rating over thousands of reviews. It also makes past buyers like me more likely to buy more of its products (which I have).

13. Social engagement

A theme that's popped up among many of these strategies is the value of authentic end-user experiences, and social engagement—as opposed to paid social media advertisements—is another way to promote that. Because, when it's done well, social media breaks down the barrier between customers and corporations. 

As content channels, your social media feeds can be outlets for promoting thought leadership while also driving traffic to your blog or directly to your product pages. They can also serve as branding opportunities to grow your reach to new customers if your channels provide real value in the form of useful information, discount codes, giveaways, updates on your products, or pure entertainment.

Here's Beyond Meat illustrating what I mean.

Because this is what heroes do: goes on to inconvenience a minimum wage grocery store employee https://t.co/V6u0AS8a5A — Beyond Meat (@BeyondMeat) May 15, 2023

Beyond Meat stays top of mind to its customers while coming across as personable, empathetic, and aligned with their own values, which makes those potential customers want to continue buying its products. Followers may also feel compelled to share its funny tweets on their own feeds, expanding the potential customer base further.

Measure success by calculating customer acquisition cost

Once you've picked your customer acquisition channels and executed your customer acquisition strategies on those channels, there's still more you can do. The key to effective customer acquisition is measuring the success of your campaigns in real dollar amounts.

To do that, you can repurpose a standardized marketing equation that breaks down to spend over acquisitions . This gives you the cost per acquisition.

Let's say your expenses on social media combine a freelance designer's pay, your copywriter's salary (adjusted for the time they took to work on the campaign), and relevant monthly software fees, coming out to $500 for a four-week campaign. The campaign funnels through a dedicated product code, which is used 50 times . That means each customer costs you $10 to acquire .

Now, let's say the average spend through that product code is $100. That means you've generated $10 per $1 of marketing spend, while the total campaign generated $5,000 on a $500 investment.

Whether that's successful on your terms depends on your goals for the campaign. With real dollar values in hand, you can decide whether this approach is worth doubling down on later, abandoning, or tweaking before you try again.

Once you know the quantitative performance of your customer acquisition strategies, you can maximize your return by making your campaigns more efficient. Then, once you can get maximum value at minimum cost per acquisition, you're ready to grow your efforts.

To improve acquisition efficiency, you can either increase conversion rates, lower the cost per conversion, or increase the average value of each conversion. Here are a few common strategies for making one or more of the above happen.

Automation: Automating easily replicable marketing operations like follow-up messaging, new lead alerts, reporting, and data cleanup keeps overhead down.

A/B testing: Testing minor changes to marketing elements like copy, images, keyword focus, message timing, email layout, and acquisition channels allows you to focus efforts on what works best for your customers.

Customer segmentation: Identify different segments within your target audience and tailor your marketing efforts to each segment. This increases the relevance of your campaigns and cuts down on wasteful spending.

Offer add-on perks: By giving leads more options to increase their spend at the time of conversion (via cross-selling and upselling ), you can grow the average value per conversion.

After new customer acquisition comes retention

Customer acquisition is an ongoing process—it takes continued effort to keep improving over time, and it doesn't stop when the lead clicks "Buy." The real goal for new customers is that they continue on to be retained customers , driving more value as you continue bringing new ones into the fold. 

Customer retention requires its own set of strategies separate from broader acquisition strategies, but it's still a vital part of the customer acquisition process as a whole. Retained customers raise your bottom line while also helping you bring in new ones through referral programs, word-of-mouth advertising, and reviews.

Learn more about how to automate customer retention .

Customer acquisition is a moving target. There are always ways to improve lead volume, conversion rates, and conversion value. And what works for one product at one time may not work for a different product or even for the same product by this time next year. Even when you're satisfied, you have to stay fluid with your market.

To give you the bandwidth to focus on those strategies, you can let automation and AI handle the work that's meant for computers. Here are some guides to automating various customer acquisition channels:

6 ways automation can help you nurture and manage leads

Grow your business with marketing automation

4 ways to automate your email marketing for better communication

6 ways to automate your PPC campaigns

7 ways to use social media automation to promote your content

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Bryce Emley

Currently based in Albuquerque, NM, Bryce Emley holds an MFA in Creative Writing from NC State and nearly a decade of writing and editing experience. His work has been published in magazines including The Atlantic, Boston Review, Salon, and Modern Farmer and has received a regional Emmy and awards from venues including Narrative, Wesleyan University, the Edward F. Albee Foundation, and the Pablo Neruda Prize. When he isn’t writing content, poetry, or creative nonfiction, he enjoys traveling, baking, playing music, reliving his barista days in his own kitchen, camping, and being bad at carpentry.

• Sales & business development

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10 Successful Customer Acquisition Strategy Examples – Case Studies and Best Practices

Customer acquisition strategy examples: 10 effective approaches to boost your business.

Welcome to our comprehensive guide on successful customer acquisition strategies . In today’s competitive business landscape, acquiring new customers is crucial for sustaining growth and achieving long-term success. In this blog post, we will explore ten effective customer acquisition strategies that are currently yielding impressive results for various businesses. From influencer marketing to AI integration, we will cover a range of approaches to help you choose the best strategies for your unique business goals.

Customer Acquisition Strategies Based on Target Audience

Strategy 1: influencer marketing.

Influencer marketing has become a powerful tool for capturing the attention of your target audience through partnerships with influential individuals in your industry. A prime example of successful influencer marketing is the collaboration between Brand X and popular blogger Y.

Case Study: Brand X partnering with popular blogger Y

Brand X, a skincare company, teamed up with renowned beauty blogger Y to promote their new range of products. Through Y’s recommendation and enthusiastic reviews, Brand X saw a significant increase in website traffic, brand awareness, and sales.

Best practices for influencer marketing campaigns:

• Identify relevant influencers who have a genuine connection with your target audience.
• Create personalized collaboration proposals that highlight mutually beneficial outcomes.
• Provide clear guidelines and encourage influencers to showcase your product/service authentically.
• Monitor and analyze the results of your influencer campaigns to optimize future partnerships.

Strategy 2: Content Marketing

Utilizing compelling content is an effective way to attract and engage potential customers. Company Z’s content marketing campaign serves as an inspiring example.

Case Study: Company Z’s successful content marketing campaign

Company Z, a digital marketing agency, created a series of informative blog posts and videos that addressed their target audience’s pain points. Through compelling storytelling and valuable insights, they established themselves as industry authorities, attracting relevant leads and converting them into long-term clients.

Best practices for content marketing to acquire customers:

• Research your target audience’s interests and challenges to create highly relevant content.
• Utilize a mix of formats, such as blog posts, videos, infographics, and podcasts, to cater to various preferences.
• Optimize your content for search engines to increase organic visibility and attract qualified traffic.
• Promote your content across multiple platforms and nurture leads with tailored email marketing campaigns.

Strategy 3: Social Media Advertising

Social media platforms offer immense potential for reaching and engaging a wide audience. Brand A’s successful social media advertising strategies demonstrate how to capitalize on these opportunities.

Case Study: Brand A leveraging social media platforms

Brand A, a fitness apparel brand, utilized targeted ads on Facebook and Instagram to showcase their products to fitness enthusiasts. By segmenting their audience based on demographics and interests, they effectively reached potential customers who were most likely to resonate with their brand, resulting in increased brand visibility and sales.

Best practices for effective social media advertising:

• Define clear objectives and target specific customer segments to optimize ad relevance.
• Create appealing visuals and compelling ad copy that conveys your unique value proposition.
• Utilize retargeting to reach people who have shown interest in your brand or visited your website.
• Regularly analyze ad performance and adjust your targeting, messaging, and budget accordingly.

Customer Acquisition Strategies Based on Product or Service

Strategy 4: free trials and freemium models.

Offering free trials or freemium models can be an effective way to introduce your product or service to potential customers. Company B’s successful freemium model demonstrates this approach.

Case Study: Company B’s successful freemium model

Company B, a project management software provider, offered a basic version of their software for free, allowing users to experience its benefits firsthand. This strategy not only drove initial customer acquisition but also led to a significant increase in paid subscriptions as users recognized the value of the premium features.

Best practices for implementing free trials and freemium models:

• Define clear limitations and communicate the value of the premium version to encourage upgrades.
• Implement a user-friendly onboarding process to help users quickly understand the product’s value.
• Collect user feedback during the trial period to identify pain points and improve the product.
• Establish communication channels to guide trial users and provide support when needed.

Strategy 5: Referral Programs

Referral programs have proven to be an effective customer acquisition strategy, leveraging the power of word-of-mouth marketing. Brand C’s referral program success story illustrates the potential of this approach.

Case Study: Brand C’s referral program success story

Brand C, an e-commerce company, implemented a referral program that rewarded customers with discounts or exclusive perks for referring friends. This incentivized customers to recommend the brand to others, resulting in a continuous stream of new customers at a low acquisition cost.

Best practices for designing and implementing referral programs:

• Make the referral process simple and rewarding for both the referrer and the new customer.
• Provide attractive incentives that align with your target audience’s interests and preferences.
• Promote your referral program through various channels, including email, social media, and your website.
• Regularly acknowledge and reward customers who refer new business to foster loyalty and encourage continued referrals.

Strategy 6: Email Marketing

Email marketing remains a powerful tool for capturing and nurturing leads. Company D’s effective email marketing campaigns serve as an excellent example of utilizing this strategy.

Case Study: Company D’s effective email marketing campaigns

Company D, an online fashion retailer, implemented personalized email campaigns based on customer preferences and browsing history. By tailoring recommendations and offering exclusive discounts, they successfully re-engaged inactive customers and transformed them into loyal, repeat purchasers.

Best practices for capturing and retaining customers through email marketing:

• Segment your email list based on customer preferences, demographics, or lifecycle stage.
• Create visually appealing and mobile-responsive email templates to enhance engagement.
• Utilize personalized recommendations, special offers, and loyalty rewards to boost conversion rates.
• Regularly analyze email performance metrics and conduct A/B testing to optimize your strategies.

Customer Acquisition Strategies Based on Industry or Niche

Strategy 7: event marketing.

Events provide invaluable opportunities for businesses to connect with their target audience. Brand E’s event marketing success story demonstrates the potential of this customer acquisition strategy.

Case Study: Brand E’s event marketing success

Brand E, a pet food company, organized a pet-friendly outdoor festival where they showcased new products, offered samples, and engaged with pet owners. The event resulted in a significant increase in brand visibility, direct sales, and valuable customer connections.

Best practices for leveraging events to acquire customers:

• Identify relevant industry-specific events or create your own targeted events.
• Create engaging experiences, such as interactive displays, product demonstrations, or educational workshops.
• Utilize social media and email marketing to promote your event and draw attendees.
• Collect contact information and follow up with event attendees to nurture relationships.

Strategy 8: Partnerships and Collaborations

Strategic partnerships can help businesses extend their reach and tap into new customer bases. Company F’s success with forming partnerships showcases the potential of this customer acquisition strategy.

Case Study: Company F’s strategic partnerships

Company F, a subscription box service, partnered with complementary brands to offer joint promotions and exclusive discounts. By leveraging each partner’s customer base and cross-promoting their products, they successfully acquired new customers and strengthened brand loyalty among existing customers.

Best practices for forming successful partnerships and collaborations:

• Identify compatible brands or influencers with similar target audiences.
• Articulate clear mutual benefits and goals to establish a win-win partnership.
• Create co-branded campaigns or exclusive offers that entice customers to engage with both brands.
• Regularly evaluate and optimize your partnerships to ensure maximum effectiveness.

Strategy 9: Local SEO and Online Directories

For businesses with a physical presence or a strong local customer base, optimizing local SEO and utilizing online directories can be highly valuable. Brand G’s effective local SEO efforts exemplify this approach.

Case Study: Brand G’s effective local SEO efforts

Brand G, a local bakery, focused on optimizing their website for local keywords and directories. They ensured consistent NAP (name, address, phone number) information across all platforms and obtained positive customer reviews. As a result, they secured top rankings in local search results, gaining increased visibility and attracting local customers.

Best practices for optimizing local SEO and utilizing online directories:

• Create informative and localized content on your website, incorporating location-based keywords.
• Optimize your Google My Business profile, including accurate business information and customer reviews.
• Submit your business details to well-known online directories, such as Yelp and Yellow Pages.
• Encourage satisfied customers to leave positive reviews and respond promptly to any feedback.

Customer Acquisition Strategies Based on Technology and Innovation

Strategy 10: ai and chatbots.

Emerging technologies, such as AI and chatbots, offer businesses new avenues to engage with customers and streamline the acquisition process. Company H’s successful implementation of chatbots demonstrates the effectiveness of this strategy.

Case Study: Company H’s successful implementation of chatbots

Company H, a telecommunications company, integrated chatbots into their customer support system. AI-powered chatbots efficiently handled initial customer queries, provided personalized recommendations, and guided customers through the purchase process. This resulted in improved customer satisfaction and increased conversions.

Best practices for integrating AI and chatbots to acquire customers:

• Understand your customers’ pain points and tailor chatbot interactions to address their specific needs.
• Ensure seamless integration with existing customer support systems to provide consistent assistance.
• Continuously improve chatbot responses by analyzing customer interactions and making necessary updates.
• Offer human fallback options for complex inquiries that require human intervention.

In this comprehensive guide, we have explored ten successful customer acquisition strategies, categorized based on target audience, product or service, industry or niche, as well as technology and innovation. Remember, each business is unique, so choose the strategies that align with your goals, target audience, and industry. By implementing the most suitable customer acquisition strategies, you can effectively expand your customer base, increase brand visibility, and drive sustainable growth.

Take action now and initiate the implementation of these strategies to propel your business forward!

Related articles:

• The Ultimate Guide to Developing an Effective Acquisition Strategy in Marketing
• Mastering Acquisition Strategy – A Clear Definition and Best Practices
• Understanding Acquisition in Marketing – Exploring its Definition and Importance
• Unlocking Growth – How a Customer Acquisition Consultant Can Skyrocket Your Business

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43 of the Best Customer Acquisition Examples

As the year comes to a close I thought it was a good time to put together a comprehensive list of the best customer acquisition content from around the web. I've found everything from interviews, discussions, case studies and how-to guides that you can add to your holiday reading list.

10 minutes here and there with a case study or interview can help keep your mind sharp while you're away from the office; ensuring you'll hit the ground running after the new year.

How-to’s and Guides

How Ghost's Onboarding Change Increased Conversions by 1000%

When the team at Ghost looked to improve their trial conversion rate they experimented with their initial onboarding flow. It all started with a very basic premise: Some of their users have a better initial experience than others and - as a result - they are more likely to convert into paying Ghost(Pro) subscribers.

A Beginner’s Guide to User Acquisition

Nate Desmond goes over the process for creating a user acquisition strategy. He includes great examples from Wealthfront, Mint and SmartWool. He tells us that if we don’t establish the definition of success before running user acquisition efforts, we won’t know whether we’re desperately failing or single-handedly making our company succeed.

Mobile Growth Strategies Tools and Tactics

Adrien Montcoudiol gives a great presentation that breaks down the mobile growth strategies of companies like Mailbox, Airbnb and Tinder. Including how to build virality into your product and conversion rate optimization.

6 Ways to Improve the Performance of Your Call to Action Buttons

Joanna Wiebe goes over the key conversion elements of call to action buttons. Everything from consumer behavior principles like the paradox of choice and analysis paralysis to a few examples of successful conversion experiments.

User Acquisition From the Trenches

Matt Harris from sendwithus gives us a quick breakdown of their user acquisition strategy for sendwithus. Highlighting their partnerships with email delivery services (Mandrill, SendGrid, MailGun, etc.)  and their integration with Stripe that helps drive quality leads for their business.

How Mention Reduced Churn by 22%

Clément Delangue shows us the successful churn reduction experiment they ran at Mention. They noticed that their automated marketing process kind of stopped once they got free trials to convert. So they extended the lifecycle of their emails and in-app messages to these paid clients to further nurture those relationships.

In Defense of the Popup

Ott Nigulis goes over the benefits of popups and how they can increase the lead conversion rate of your website without sacrificing bounce rates and user experience.

5 Psychological Principles of High Converting Websites

Nate Desmond goes over the value of studying behavioral psychology and how it can help with your user acquisition experiments. Including the principles of Fitt's Law, Facial Recognition, Cost/Benefit Analysis, Past Experience and the Law of Pithiness.

Manuel Weiss

The Co-founder and CMO of Codeship has been releasing great content on how to build a process-driven marketing team. Stay tuned for our upcoming interview with Manuel in the new year.

Use Estimates, Experiments and Evidence to Understand Your Customers

Manuel goes over the simple rule they have at Codeship. "Everything you think is only an assumption." He argues that you need to verify those assumptions by running experiments and delivering evidence.

Look at the outcome of your experiments and keep track of your data it's the only way you can build a process for your marketing initiatives.

Creating Repeatable and Measurable Marketing Building Blocks

In this article Manuel goes over Codeship's approach to documenting and prioritizing their marketing experiments. He even includes some handy spreadsheets you can use for your own campaigns.

Ryan's an awesome online marketer who's been building Attach.io - a sales tool that helps you track customer interactions with sales material. He also manages a new online community for salespeople Closingcall.co

How to Create a Customer Acquisition Plan for Startups

Ryan Gum gives us an overview of how to build a process for your startup customer acquisition. He emphasizes the importance of creating a flexible plan and how it's more about building a strong process than anything else.

How to Find and Track Customer Acquisition Channels

Alice Default goes over the strategy she used with Front for vetting and implementing different acquisition channels. Including her process for building relationships with press, creating viral loops and social acquisition.

Invision’s Growth Strategy with Clark Valberg

Co-Founder and CEO of Invision goes over the success of their free t-shirt contests and how valuable word of mouth is for their user acquisition. In the interview he says "about 80% of our traffic comes through word of mouth. So anything that’s a catalyst for that, is good.... Right now it’s undoubtedly word of mouth that drives the most paying customers."

How Yesware Grew Revenue by 1300% in One Year

In this interview Matthew Bellows CEO of Yesware goes over how they got their first 1,000 users and how they plan to continue their rapid growth in the sales software industry.  

Morgan Brown on Net Promoter Score and Using Referral Programs to Grow ScoreBig

In this interview with Morgan Brown, Head of Growth at Qualaroo, we go over the value of NPS and his experience working on growth with startups like ScoreBig and Qualaroo.

Why Marketers Should Have Their Own Engineers

In this interview Robbie Mitchell from Knewton goes over how he used engineering talent for his team's marketing initiatives. He discovered that in-team technical talent was a critical enabler for marketing success.

This wasn’t all about finding other people to do the work, either; he encouraged everyone on the team to gain relevant technical skills, including himself. “I had to get comfortable with version control, front-end templates, deployment systems — really a bunch of tools we were using to support and serve our community, and it’s made a huge difference,” he says.

Casey Armstrong on Taking Advantage of New Platforms for Acquisition

In this interview explains the holistic approach he takes to marketing, product and data. As well as specific examples of campaigns he's run at companies like MavenLink and Pantheon.

Social User Acquisition

How to Master Social Customer Acquisition

Shanelle Mullin explains her framework for social customer acquisition and how it's essentially the art of building and maintaining relationships to improve the traditional customer acquisition processes.

Facebook User Acquisition

Carly Rogers  explains why Facebook advertising is fastly becoming a profitable acquisition channel for big brands and startups. How marketers can take advantage of Facebook's treasure trove of user data to unlock big wins for their company.

Twitter User Acquisition

In this chapter of Austin Allred's guide he goes over how he uses twitter to target, engage and ultimately convert customers on twitter.

Best of CoElevate - Brian Balfour - VP Growth at Hubspot

Avoiding the Wheel of Meaningless Growth

Brian Balfour talks about the problems companies run into when celebrating and pursuing vanity metrics. He explains about how pursuing short term goals ends up sacrificing long term growth and how you can avoid this kind of thinking.

5 Steps To Choose Your Customer Acquisition Channel

Brian Balfour goes over a framework you can use to select and test acquisition channels for your company. By creating a matrix like the one above you can understand the true cost of different channels and how they stack up against one another.

How to Become a Customer Acquisition Expert

Brian Balfour shows us the unique skillset you have to acquire in order to work on growth. By developing skills in many different but complementary areas you can work across departments with your experiments and create more value for your company.

Traction Versus Growth

Brian Balfour shows us the difference between the stages of growth startup companies go through. He explains that it's necessary for a team to focus on 2-3 channels when they're in the Traction phase as they have very limited resources and don't want to dabble with too many channels at once.

Referral SaaSquatch

Creating a Process for Customer Acquisition

In this post I go over the process you can use to create your own customer acquisition experiments. I even give you 5 examples that you can try out on your own like a Natively Embedded Quiz, Symmetric Messaging and a Sliding Content Recommendation.

Building a Process for Growth Experiments

In this article I show you the process you can use to run your own growth experiments. I include sample spreadsheets and experiment templates that you can use on your own. I show you an example of an experiment backlog and an experiment doc for a blog footer call to action.

How to Improve the Performance of Your Referral Program

In this article I go over different approaches you can take to improve the performance of your referral program. Including tactics for increasing program visibility, participation and conversion.

GrowthHackers.com Growth Studies

In this growth study Morgan Brown gives us a comprehensive look the growth of Airbnb; from everything like the initial traction story all the way to their international expansion. He shows us that Airbnb’s new referrals program has already resulted in hundreds of thousands of nights booked by referred users in 2014. Which shows us how valuable word of mouth referrals are for the growth of this company.

In this growth study Morgan Brown takes us through the initial traction story of Uber all the way to their current international expansion. Their city-by-city launches coupled with the power of experiential word of mouth has helped Uber establish a foothold across the globe.

In this growth study by Morgan Brown he shows us the power of HubSpot's inbound marketing machine and their internal culture of innovation that puts them on a high-growth trajectory for years to come.

The value of active users isn’t just in their engagement—active users also play a critical role in both re-activating inactive users and bringing in new ones, making virality one of the biggest keys to LinkedIn’s growth.

In this growth study Morgan Brown shows us the initial traction story of Evernote and how valuable timing can be for the launch of a product. Evernote's initial traction was was due in large part from their product taking advantage of early distribution in relatively new App Stores.

GitHub Part 1 + Part 2

One of their first engineering hires Zach Holman believes that adding “Tweet” and “Like” buttons doesn't create word of mouth. Rather, word of mouth comes from content, thoughtfulness, solved problems, and ease of use—in short, the whole experience of a product or service.

In this growth study of Square, Morgan Brown shows us the growth engine that helped the company expand rapidly. Their unique value proposition and high visibility to consumers all helped contribute to building a raving fan base for the company.

Belly takes advantage of word of mouth through their deep Facebook integration and ease in sharing check-ins/rewards claimed. They also have a well thought out gamified rewards experience that keeps user engagement and retention high.

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Customer acquisition in 2023: Everything you need to know about acquiring new customers

Everything you need to build and implement a solid customer acquisition strategy for your SaaS business. Attract the right customers, price competitively, and convert them into users with a seamless checkout and onboarding experience.

What is customer acquisition?

• The most effective way to grow?
• When is it important?
• The costs of acquisition
• How to create your strategy 
• How to measure success
• Real-life-examples

Customer acquisition FAQs 

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Successful SaaS businesses implement  SaaS growth strategies  across customer acquisition, retention, and expansion. They learn how to: 

• Acquire more of the right customers 
• Retain them for longer 
• And expand their accounts or broaden the pool of customers they can serve. 

This guide is all about part one of that journey, customer acquisition. 

Consistently acquiring new customers is crucial for all SaaS businesses. For new startups, it’s the difference between claiming a stake in the market and fading into the background. Here's a rundown of the core considerations and requirements for succeeding with your customer acquisition strategy. But first, a quick definition.

Customer acquisition is the process of gaining new customers. Acquisition is one of the most popular growth levers because it is the most immediate way to grow your customer base. It covers the new-business part of your  go-to-market strategy , like where and how you market your product, and how you shape your pricing strategy . It also covers how you drive the conversion of prospects in your buying cycle, or turn non-paying users into customers.

Customer acquisition is a finicky growth strategy because it gets harder and more expensive as your customer base grows and your potential, untapped market shrinks.

Additionally, acquisition only refers to the act of getting a customer to join. Effort is shuttled into the signup event, but often not beyond. That means that acquired customers may discontinue ( churn ) at any point. If these customers were acquired by brute force acquisition techniques and aren't actually interested in your product for long-term use, they're more likely to churn. You'll have to be extra careful with your  marketing efforts , to make sure you are reaching  potential customers  with profitable  lifetime value .

When your acquired customers churn out, you'll have to  replace that lost revenue in order to grow . If you're planning on acquiring more  new customers  to replace lost ones, you'll be pulling from that ever-diminishing potential market. This will leave you feeling like you're trying to fill a leaky bucket with a limited water supply.

What is a customer acquisition strategy? 

A customer acquisition strategy is the plan of action and all the tools a brand needs to attract new customers and convert them to paying customers. Using data, you can identify key consumer behaviors and available marketing opportunities. The information guides on the marketing channels you need to reach them. The right strategy can deliver a smooth customer experience leading to referrals and word-of-mouth marketing. 

Why is customer acquisition essential? 

You need loyal customers to grow your revenue. So, the number one benefit of effective customer acquisition is increasing your customer base and profits. Also, acquisition efforts are key in developing and maintaining strong brand awareness. In addition, business growth and expansion depend on acquiring new customers. 

Is customer acquisition an effective growth strategy? 

The SaaS community is obsessed with acquisition. We talk about it a lot. By studying 25,679 blog posts—to see what the SaaS community is interested in—we found that  nearly 8 out of every 10 posts were about acquisition .

But even though acquisition is a vital growth lever, it is often overplayed at the expense of other growth opportunities.  Retaining customers (getting them to continue using your product) and monetizing customers (improving the way you earn revenue by upselling or improving customer LTV) are other important and hugely effective ways to grow your SaaS business.

A 1% improvement in customer acquisition results in a 3.32% increase in bottom-line revenue. Meanwhile, a 1% improvement in  customer retention  results in 6.71% bottom-line improvement. Improving monetization by 1% results in a  12.70% increase in your bottom-line revenue .

Customer retention  and monetization cannot be overlooked when you're building and expanding a SaaS company, so monetization and  retention analysis  should be used in tandem with acquisition strategies to achieve maximum growth.

When is customer acquisition important?

Though acquisition is important throughout all stages of growing a SaaS company, it's most important at the beginning when you can't take advantage of other growth levers like retention and monetization.

In the early stages, you can give acquisition a little more attention. It's especially essential because at this point you need to focus on acquiring the right  first-time  customers and developing sustainable acquisition strategies. These early strategies will compound and iterate as your business grows. Setting up a good foundation of early customers will make acquisition, retention, and monetization easier later on.

According to SaaS VC Jason Lemkin,  the first 10 unaffiliated conversions  is an early indicator that your SaaS company will be successful. This is because these first early adopters have all come to the conclusion on their own that your product solves their problems.  Your first conversions give you validation that  your problem/solution fit is a viable business idea .

These early acquisitions are important in their own right, but they also provide a valuable learning opportunity to set your business up for future success. It's important at this stage to measure the  lead generation channels  and demographics (company type, job title, age range, etc.) of your acquired customers. By recognizing early patterns, you can develop an idea of your  target audience  to create a strong long-term acquisition strategy.

Understanding your market, even in these early stages, will also help you retain and monetize customers because you'll better understand what value propositions are important to them.

What are the costs of customer acquisition?

Customer acquisition is important to your SaaS company and should be used strategically—but focusing  too much  on acquisition has high costs.

Here is a video that explains CAC Payback and important benchmarks, originally created for Paddle Studios :

Takes focus away from other, cheaper growth methods

On a qualitative level, a blind focus on acquiring logos  prevents you from focusing on more sustainable growth methods . Acquisition is the SaaS growth equivalent of using a sledge hammer—it often isn't precise or strategic, and you don't have that many chances to do it effectively. The most reliable way to grow your business steadily and over a long period of time is by identifying and capitalizing on the value that your customers want from your product.  This happens by talking to your customers, collecting data on your market, and analyzing the data for patterns about what your customers value and what they're willing to pay.

This is how you'll  redesign your pricing strategy to better monetize your customers .

Depend too much on acquisition

On a quantitative level, focusing too much on your  customer acquisition process  can lead to your company becoming a “ CAC fiend. ” Customer acquisition cost, or your company's spend on each customer, is essential in acquisition. That's why you need to know your fully-loaded CAC to fully understand the unit economics of your business. It breaks down to dividing the total expenses to acquire customers by the total number of customers acquired:

Customer acquisition cost formula Customer acquisition cost = total expenses to acquire customers / total # of customer acquired

The numerator has to include all acquisition-related expenses in order to calculate a fully-loaded CAC. This includes monthly spend on paid advertising, sales and marketing costs, and the salaries for sales and marketing team members. It can add up quickly and may be higher than many companies realize. To minimize these costs, your acquisition needs to be strategic and targeted—not expansive and haphazard.

How to create a customer acquisition strategy 

On average, SaaS companies spend a mere 6 hours on pricing strategy.  This might seem like enough time to price your new product, but in reality, pricing should be far more than a "set and forget" strategy. 

If you don't  optimize your pricing  and review it regularly, the impact can be more detrimental than you think. It ultimately affects the rate at which you scale. 

If the price is too high, you'll outprice your customers and charge more than their perceived product value. Too low, and you sell yourself short. This risks your product looking like a "cheap" or, even worse, less effective option compared to competitors. 

In addition to the price point, you need to think about how you package up your product offering. This might be on a subscription basis, as a one-time purchase, or you might have different tiers with different features available at different price points. 

Time to spin the wheel (or read on) and find out how to ensure the price is right. 

Optimize your prices regularly 

Pricing should not be left to chance, nor should you blindly follow your competitors' pricing tactics. You need to understand your target audience, market and product value to optimize your pricing for profits. These steps should help. 

• Rely on hard data 
• Define your company goals and boundaries 
• Have clarity on your value metric 
• Create pricing tiers business model 
• Regularly monitor your pricing 

Clear a path to the checkout page 

Your pricing is right on the money, and your prospects are ready to convert into paying customers. Result. 🙌

Now all you need is the checkout and purchase flow to secure that all-important initial payment. Right? 

Not quite. A lot goes into maximizing these workflows for optimum conversion and goes back to decisions about how you want to sell. Let's get into it. 

• Determine your digital marketing channels 
• Spread the word 
• Optimize for maximum conversion 
• Secure that first payment 

Deliver on your promise 

A prospect has converted into a paying customer, and the initial transaction has been approved. Now it's time to fulfill your end of the bargain and give them access to your product (also referred to as provision). 

In a traditional retail business that sells physical goods, this is where you'd be packaging and shipping those goods out to the customer. With SaaS and digital goods, this process looks a bit different. 

Let's take a look at what it involves. 

• Decide how you will deliver your product. The onboarding must be seamless.
• Track whether the users are using the product effectively 
• Revoking access after it's been granted in case of delinquent accounts, trial completion, etc. 

Keep financial obligations above board 

You must take into account sales tax and financial compliance at every point across your customer and payment journey. 

First up, sales tax. For acquisition, specifically, this includes making sure you are collecting the right amount of sales tax at the checkout - this will be different depending on the type of software being sold and where your customers are based. So for this, you need access that tells you exactly where your customers are coming from to avoid getting caught out. 

Other financial compliance regulations also exist worldwide - each with its nuances. For example,  the rules regarding 3DSecure on one-time and recurring purchases are different in India than in many other countries . You'll need some dedicated resources to manage compliance and look forward, so you're prepared for any new regulations or changes to existing ones that come into play. 

How to measure customer acquisition success 

Understanding how the different parts of your acquisition strategy are performing will help you see what's working and where there's room for improvement. 

Below are several different  SaaS metrics  to track. 

• Customer Acquisition Cost (CAC) : Total cost for the business to acquire each new customer. 
• Conversion rate : The percentage of prospects that convert into customers (or take a desired action on a page): This could be customers who complete the checkout and make a purchase or those who sign up for a free trial (or who moved from free to paid). For sales-led businesses, it could be the number of prospects who sign up for a demo or ask to speak to sales. 
• New Monthly Recurring Revenue (MRR) : The monthly amount you receive from new subscription customers. You can combine this metric with CAC to determine the profitability of your new customers. 
• Daily active users : The number of users who log in and use your product daily. 

Customer acquisition strategy pays off 

Framer case study .

Design software, Framer's pricing and plans page is a masterclass for SaaS businesses. If you look at the screenshot below ( or check out the live page ), you can see how Framer use pricing to effectively: 

• Cater to different customer segments, with different packages for individuals and teams 
• Display the value from each package clearly, and concisely 
• Hook customers in with a demo and trial period 
• Offer flexibility in how customers bill, with monthly and annual options (and discounts!). 

Read more about Framer's story here.  

iMobie case study 

iOS and Android transfer, manager, and maintenance software,  iMobie  is a great example of optimizing your checkout and payment processes that can boost conversion. 

To tackle its low conversion rate, iMobie: 

• Localized the process with geo-specific pricing, currencies, and the correct sales tax calculations. 
• Implemented flexible subscriptions with a one-click upgrade, downgrade, pause, and cancel options. 
• Optimized its checkout and payment page design. 

And the result? 

iMobie's conversion rate improved by over 20% in Germany and France, and over 10% in Japan. 

Read more about iMobie's story here.  

Take the headache out of growing your software business

We handle your payments, tax, subscription management and more, so you can focus on growing your software and subscription business.

What does customer acquisition mean? 

It means gaining new customers and encompasses the acquisition channels and all activities involved. It is the most immediate way to grow your customer base. 

It is a plan of action and tools for how a brand will acquire new customers. A solid strategy requires using hard data to formulate the necessary steps to an effective customer acquisition strategy. 

Why is a customer acquisition strategy important? 

A customer acquisition strategy is critical for establishing your hold on the market. As a result, you can bring in new clients and grow your revenue. 

What are the types of customer acquisition? 

Types of customer acquisition techniques include: 

• Social media marketing 
• Content marketing 
• Referral program 
• Search engine optimization(SEO) 
• Mobile marketing 
• Paid advertising 
• Email marketing

Related reading

• Free Resources

Customer Acquisition: A guide to using LinkedIn advertising, AI analysis, and SEO

This article was distributed in the MarketingSherpa email newsletter .

We’ve been helping marketers improve their funnel in the MECLABS SuperFunnel Cohort community (feel free to join us for a ChatGPT, CRO and AI: 40 Days to build a MECLABS SuperFunnel LiveClass to get ideas for improving your own funnel from the cohort).

The first step in any successful funnel is customer acquisition. So to give you ideas for attracting potential customers to your funnel, today we bring you three quick case studies – one using a paid tactic, and two using organic tactics:

• Paid advertising – How an AI solution improved its advertising messaging thanks to customer interviews and demo attendance.
• Technical SEO – How an HR tech platform used AI to help migrate subdomains on its main domain to improve SEO.
• Keyword-driven SEO – An ecommerce company’s five-step plan for finding keywords to attract organic traffic.

Quick Case Study #1: AI solution interviews customers, increases ad CTR from 3% to 10%

“Before I joined the Aimondo team, the company did not consider LinkedIn to be a decent customer acquisition source,” said Alisdair Hunter, Head of Growth, Aimondo UK .

BEFORE – Wrong pain points

Cost per lead was very high (>$120), and the clickthrough rate (CTR) was 1% to 3%.

“Pretty soon I realized that our messaging conveyed in the single-image ad LinkedIn campaign was built on the wrong assumptions about customers’ pain points,” Hunter said.

The marketing team had asked the sales team about customer pain points. The sales team provided these pain points:

• Low quality of data used for pricing workflows.
• Price optimization projects are too complex to handle, and not every company has someone experienced enough on their team to tell them where to start.

Based on these insights, the marketing team crafted messages that were supposed to reflect these pain points. For example, the image headline in one ad read “46% of sellers get wrong pricing date.” Another ad’s image headline read “Piece together your winning pricing strategy.”

Creative Sample #1: LinkedIn ads with average CTR, before

AFTER – Jobs-to-be-done framework

In February, a digital marketer from the team attended three demo sessions and conducted four customer interviews with existing customers. After processing the insights, the team quickly realized that insights delivered by the sales team were not exactly correct.

Instead of using generalizations (complex projects, low-quality data), they switched to addressing very precise ‘jobs to be done’ that prospects had.

“New messaging for the next single-image LinkedIn campaign was built on the following customer interview-driven insights: our prospects struggle to fulfil a very precise task – calculate price elasticity, and our prospects have to improve the quality of their demand forecasts,” Hunter said.

For example, one ad’s image headline read “What is the price elasticity break point for your product?” Another ad image headline was, “Does your April sales forecast account for weather data?”

Creative Sample #2: LinkedIn ads with average CTR, after

RESULTS – Higher CTR

CTR went from 1-3%, to 10-12%. Average cost per click (CPC) remained less than $3. 

“Customer interviews come in exceptionally handy. They provide qualitative data (therefore, you can very well get away with less than 10 interviews) for the initial hypothesis that can be proved or disproved via surveys with multiple participants. Or – like in our case – through LinkedIn campaigns,” Hunter said.

Quick Case Study #2: HR tech increases organic traffic by 1,200% in four months using AI-driven site migrations 

Founded in 2019 by Dee Coakley and Emily Castles, Boundless was born from the belief that people should have the freedom to shape their work lives without forfeiting their right to secure employment. Today, Boundless is operational in 25 countries.

The global employment, benefits, and payroll platform had two subdomains – guides and blogs. Boundless published over 25 country guides (each consisting of 10-12 subpages) which resided on the guides subdomain, while the blog content had hundreds of articles on a separate blog subdomain.

“We had all these different types of content sitting on different subdomains which made it both difficult to manage, but also suboptimal to our traffic goals. We decided to migrate everything to our main domain, boundlesshq.com,” said Irina Dhambazova, Head of Communications, Boundless .

However, the team had a limited budget.

“Limited budgets means there simply isn’t the luxury of time to spend hours trying to decide which content will be carried over and where retired content will be redirected to, so we turned to data using AI to help us deliver within budget” said Andreas Voniatis, Founder, Artios (Boundless’ SEO consulting firm).

The challenge was to bring across the content to the main website without losing rankings and traffic. “What most non-SEO experts won’t always appreciate is that before migrations, search engines have an existing model of your content and how they relate to each other. As soon as you migrate content, that model changes which is where the risks of losing traffic happen,” says Voniatis. “As soon as you migrate content on a website, even if it is within the same domain, you change the search engine model.”

The team decided on which content they could migrate and leave behind using the Pareto principle – 80% of your results come from 20% of your actions. “We were able to help them identify which content had SEO value by using Pareto on their Google Search Console (GSC) logs to work out which of the content drove most of the traffic,” Voniatis said.

Using AI to create redirect maps

While the URL structure for blogs and guides was straightforward, the team then had to consider what to do with articles they wouldn’t carry forward.

Some marketers might use the 410 GONE HTTP status code. Other marketers might redirect these all to the home page and lose any backlinks and traffic.

But the team wanted to find the best live pages to redirect the URLs to, and decided to use a language model to test the similarity of the removed content to the live content. “Historically for a site with many pages, this would have taken at least a week of analysis and often with some mistakes, but with AI we were able to carry out this analysis and produce a redirection map within a day which helped to keep the whole project within budget,” Voniatis said.

Although no design changes were involved, the team wanted to ensure the staging versions of the migrated content will perform comparably if not better than the existing live versions. So they audited the staging versions of the migrated content.

While the content performed fine in terms of Core Web Vitals (CWV) and being indexable, the team could see that it wasn’t as discoverable. Again, they used AI to model the distribution of internal links to content and were able to pinpoint articles that were insufficiently cross-hyperlinked from other content. “This not only helped mitigate the risk of visibility loss post-migration, but it also actually helped all content maintain its inclusion in Google,” Voniatis said.

Results – More traffic

Four months after the migration switchover, traffic increased by 1,200%, enabling Boundless to rank for English searches worldwide in Google for its main target terms around ‘Employer of Record [country],’  ‘Employees benefits in [country]’ and simply ‘Employer of Record.’

“The traffic growth since the migration was mad and quite unexpected. Not that we didn’t expect good things, but even we were surprised at how the traffic growth wildly exceeded the traffic growth levels forecasted,” Irina Dhambazova concluded.

Quick Case Study #3: Ecommerce company’s five-step plan for growing organic traffic from 10,000 to 650,000

“When I first joined Kicks Crew, we were laser focused on marketplace selling and were only averaging 15 orders per day. In two years’ time, we grew revenue by 100x with exponential growth,” said Gary Hui, Co-founder and Chief Growth Officer, Kicks Crew .

Here is the step-by-step process that the team conducted to achieve that growth.

Step #1: Baseline SEO Audit

The team started by conducting an SEO audit of the global ecommerce platform for sneakers’ website. The baseline focus of the audit examined organic traffic and the number of ranking organic keywords (spots 1-100 in the Search Engine Results Pages, aka SERPs).

Step #2: Identify ‘easy win’ keywords

‘Easy win’ keyword opportunities are keywords that the site is already ranking for in positions 4-30 (a.k.a, the first three pages of the SERPS). Google already sees the site as relevant for these key phrases. The team sought to capitalize on these existing keywords by using them, and variations of them, in more blog posts and webpages. The team:

• Ensured the site’s on-page SEO features these keywords or phrases
• Added additional, keyword-related content to the site
• Built links to these pages from high-quality, high-authority, relevant sites

Step 3: Competitive gap analysis

The focus was to identify missed opportunities and what key terms the competitors were ranking for that Kicks Crew was not. As a result of the competitive gap analysis, thousands of keywords were identified and up for grabs, including ‘Chucks’ and ‘Kicks on fire.’

Step #4: Ramp up blog content

Now that all of these keywords and gaps were identified, the team ramped up their content production and began creating relevant blog posts for the site to get the site to rank for longtail, intentional keywords. For instance, the team published posts about sneaker care, how to wear various sneaker styles, and how to resell sneakers.

Step #5: Guest posts

Guest posts were used to target high-intent, bottom-funnel keywords that users are generally plugging in when they’re ready to buy. They created posts on both sites with high domain authority and traffic, and sites with less domain authority and traffic.

RESULTS – Sales increase

The most important result is the sales increase – the site’s sales increased by 100x in two years.

The SEO improvements contributed to this increase. At the start of the campaign, Kicks Crew was ranking for around 40,000 keywords and at the end of the campaign it was ranking for almost 200,000, with a significant increase in keywords ranking in first page and top three positions. For example, Kicks Crew ranked in the No. 1 position for the keyword ‘authentic air jordan 1.’

Of course, this had an impact on traffic as well. Kicks Crew went from 10,000 monthly visitors to more than 650,000. 

“As mentioned, our site was averaging 15 orders per day which was just unacceptable to us as a company but most of all, we felt our end customer was missing out on our product offering. We are proud of our platform and knew what we had to offer was worth a portion of the market share. Through implementing a strategic SEO strategy, we were able to reach our target end customers and further connect with them by giving them relevant, useful blog content that they value,” Hui said.

“They remained flexible and passionate about reaching their end customer which wound up benefiting them immensely in the long run,” said Marc Hardgrove, CEO, The HOTH (Kicks Crew’s marketing agency).

Related resources

Ecommerce Research Chart: Acquisition cost per customer

Loyalty Marketing: How to get customers to stick around (and keep buying)

Growth Marketing: Attribution is a myth, but you need it

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Lowering customer acquisition cost and driving growth for a medical device company

A medical device company reached out to The Simple VUE to assist them in using data to understand their customers, lower customer acquisition costs, and drive sales growth of their products.

Customer Profiling

Understanding the characteristics of customers to better engage them through the right channels.

Market Prioritization

Finding markets with the most customers that fit their ideal customer profile

Lower Customer Acquisition Costs

Lower cost and drive growth by targeting new markets and customers with the right message

Our client had limited visibility into finding markets with similar customers and did not have a data-driven strategy to engage their potential customers in new markets.

By utilizing 3rd Party data, which contains key data points for every household nationwide (spending habits, media consumption tendencies, etc.), we were able to empower our client to use the power of customer segmentation to make important decisions on growth and marketing.

Our platform seamlessly integrated data from our client - merging it with the national household-level database - to allow for detailed insights into their current customer population, identify their "ideal" customer profiles, where to find more of their ideal customers, and how to efficiently drive customer acquisition.

The results of the customer profiling project completely reshaped our client's understanding of their customer base. They believed that their core customers were middle-class families with kids; the results showed that over 60% of their customers did not have children

Results also showed that ~50% of their customers make over $100k annually; this statistic kept them from lowering the prices of their products  

Expanded into 250 new markets across the United States

Redeveloped their marketing strategy for targeted marketing and engagement

Created Direct Mail, IP targeting and other campaigns at the household level

Project Overview

Expand sales by identifying and prioritizing new markets for expansion but contain costs

Through Customer Profiling and Market Prioritization project, we were able to derive insights into their customer base, identify their ideal customer, and identify markets with the highest concentration of their ideal customers.

The results of the customer profiling project completely reshaped our client's understanding of their customer base  

Ready to do more with your data?

If you have questions or you’re ready to discuss how The Simple VUE can help you empower your organization, talk to an Analytics Consultant today.

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Decoding CAC: An introduction to Customer Acquisition Cost (CAC)

One of the key metrics that captures the attention of marketers and entrepreneurs alike is customer acquisition cost (CAC). It's a metric that plays a pivotal role in determining the effectiveness and sustainability of a company's growth strategy. In this blog, we'll understand the complexity of CAC, exploring its definition, importance, calculation, and strategies to optimize it.

Table of Contents:

What is Customer Acquisition Cost (CAC)?

• How to calculate CAC
• Why is CAC important?
• Factors affecting CAC
• Improving Customer Acquisition Cost (CAC) with real-life examples

CAC cheat sheet for startups and SMBs

Customer acquisition cost (CAC) is a metric that measures the average cost of acquiring a new customer. It's essentially the total spend on sales and marketing efforts divided by the number of new customers acquired during a specific period.

How to calculate Customer Acquisition Cost (CAC)

The basic formula for calculating CAC is:

CAC = Total Sales & Marketing Costs / Number of New Customers Acquired

This includes costs such as:

Marketing expenses: Advertising, content marketing, social media marketing, search engine optimization (SEO), pay-per-click (PPC) advertising, etc.

Sales expenses: Salaries and commissions for salespeople, sales tools and technology, training, etc.

Other costs: Referral programs, public relations, events, etc.

Let's look at an example to illustrate Customer Acquisition Cost (CAC). Imagine an SMB sells workout equipment online. During a recent sales campaign, they invested the following:

Marketing expenses:

• $10,000 on social media ads
• $4,000 on search engine ads
• $2,000 on influencer partnerships

Sales expenses:

• $6,000 on salaries for sales representatives
• $2,000 on sales software

Through this campaign, they acquired 300 new customers. To calculate their CAC, they would use the formula:

CAC = Total Sales and Marketing Costs / Total New Customers Acquired

CAC = ($10,000 + $4,000 + $2,000 + $6,000 + $2,000) / 300

CAC = $24,000 / 300

Therefore, their customer acquisition cost for this campaign was $80 per customer.

This means they spent an average of $80 to acquire each new customer. Whether this cost is good depends on factors like industry benchmarks, customer lifetime value, profit margin, campaign specifics, and growth metrics. Achieving a low customer acquisition cost (CAC) isn't necessarily the primary goal. Instead, our focus should be on obtaining high-quality customers to ensure sustainable growth.

Why is Customer Acquisition Cost (CAC) Important?

CAC is a crucial metric for businesses of all sizes because it helps them understand:

The efficiency of their customer acquisition efforts: A low CAC indicates that you're effectively bringing in new customers at a reasonable cost. Conversely, a high CAC suggests that your acquisition strategies need refinement. High CAC relative to the customer's lifetime value can lead to unsustainable business models.

The profitability of customer relationships: By comparing CAC to customer lifetime value (LTV), you can gauge whether your customers are generating enough revenue to cover the cost of acquiring them. Your LTV should be several times higher than your CAC.

• The effectiveness of different marketing channels: Tracking CAC by channel can help you identify which marketing efforts bring in the most customers at the lowest cost.

Related content: A complete guide to customer acquisition strategies

Factors affecting Customer Acquisition Cost (CAC)

Several factors can affect a company's CAC, including:

Industry:  Different industries have different average CACs. For example, acquiring customers in the B2B space is typically more expensive than in the B2C space.

Business model: Subscription-based businesses often have lower CACs than businesses that sell one-time purchases.

Customer acquisition channels: Some channels, such as PPC advertising, can be more expensive than others, such as organic SEO.

• Target audience: Your target audience's demographics and online behavior can impact the cost of reaching them.

Improving Customer Acquisition Cost (CAC) with real-life examples

There are many ways to improve your CAC, such as:

Optimizing your marketing campaigns: Focus on targeting the right audience with the right message and using the most effective channels.

Case Study:  Fashion retailer ASOS partnered with an AI platform to target Facebook ads based on real-time purchase behavior and interests. This resulted in a 25% increase in click-through rates and a 10% decrease in CAC compared to traditional demographic targeting. 

(Source: Retail TouchPoints, " ASOS Leverages AI for Hyper-Personalized Facebook Ads ")

Improving your sales funnel: Make sure your website and sales process are optimized for conversion.

Case Study:  Insurance company Lemonade implemented AI-powered chatbots to answer customer questions and guide them through the quote process. This reduced the average sales cycle by 20% and lowered CAC by 15% due to increased online conversions.

 (Source: Forbes, " Lemonade Insurance: How AI Chatbots Are Transforming Customer Service ")

Offering customer referrals and incentives: Encourage existing customers to refer new customers.

Case Study:  Fitness brand Peloton partnered with TikTok to launch a campaign featuring user-generated content and influencer collaborations. This resulted in a 30% increase in website traffic and a 5% decrease in CAC from new customer segments attracted through the platform. 

(Source: Digital Commerce 360, " Peloton Partners with TikTok for First Brand Campaign ")

Building strong brand loyalty: Create a positive customer experience that will keep customers coming back for more.

Case Study: Gaming platform Roblox created a thriving virtual world where users can interact and create content. This fostered a strong brand community, leading to a 40% increase in user engagement and a 12% decrease in CAC due to viral word-of-mouth marketing. 

(Source: VentureBeat, " Roblox's User-Generated Content Strategy Fuels Growth and Engagement ")

Leveraging multi-channel marketing: Diversify marketing channels to reach a broader audience, potentially reducing dependency on one expensive channel.

Case Study:  Home improvement retailer Lowe's integrated its online and offline channels, allowing customers to seamlessly research products online and purchase them in-store or vice versa. This improved customer experience, leading to a 15% increase in repeat purchases and a 7% decrease in CAC due to higher customer lifetime value. 

(Source: Retailbrew, " Lowe's Omnichannel Strategy Drives Customer Satisfaction and Growth ")

Focus on customer retention: Focus on customer retention can indirectly impact CAC by increasing the customer lifetime value, making acquisition costs more justified.

Case Study:  Ecommerce platform Zalando revamped its loyalty program with tiered rewards and personalized recommendations based on purchase history. This resulted in a 20% increase in customer retention and a 8% decrease in CAC due to reduced churn and increased customer spend. 

(Source: Ecommerce News Europe, " Zalando Revamps Loyalty Program with Personalized Rewards and Recommendations ")

Step 1: Define your goals

Target customer: Who are you trying to reach? Understand their needs and behavior.

Acquisition channels: Which channels will you use to reach them? (Social media, content marketing, SEO, etc.)

Cost tracking: Decide how you'll track costs across each channel (e.g., ad spend, content creation costs).

Step 2: Calculate your current CAC

Total Sales & Marketing Costs (period) / # New Customers Acquired (period)

Step 3: Analyze & improve

Channel breakdown: Calculate CAC for each acquisition channel. Identify high-performing and low-performing ones.

Customer Lifetime Value (CLTV): Estimate the average revenue each customer generates over their lifetime.

Profit margin: Analyze your profit per customer. Ensure CAC is sustainable within your margins.

Optimize Spending: Allocate budget towards high-performing channels and adjust spending based on learnings.

Step 4: Continuously monitor and refine

Regularly track and update CAC for ongoing campaigns.

Experiment with new channels and tactics to find cost-effective acquisition strategies.

Use A/B testing to optimize ad copy, landing pages, and conversion funnels.

Benchmark your CAC against industry competitors to identify areas for improvement.

Bonus tips:

Focus on acquiring high-quality customers with long-term potential.

Leverage content marketing and referral programs for organic acquisition.

Automate lead generation and nurturing processes to reduce costs.

Use analytics tools to track key metrics and measure campaign performance.

• Remember, CAC is a dynamic metric—it should evolve as your business grows.

Mastering the art of customer acquisition is a continuous challenge. CAC stands as a compass, guiding companies through the intricate landscape of growth. By understanding, calculating, and optimizing Customer Acquisition Cost, businesses can not only survive but thrive in an increasingly competitive market. It's a continuous journey of refinement, adaptation, and strategic decision-making that ultimately paves the way for sustained success.

Here are some additional insights on CAC:

CAC isn't a one-size-fits-all metric: What's considered a good CAC for one company might be too high or too low for another. It's important to benchmark your CAC against your industry and competitors.

CAC should be tracked over time: This will help you identify trends and see how your customer acquisition efforts are improving.

• CAC can be used to make more informed investment decisions: For example, if you know that your CAC is high, you might decide to invest in marketing automation tools to improve efficiency.

Kiruthika Devi & Yash Gupta

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Rethinking customer retention vs. acquisition

Which approach generates the best roi.

When spending money to attract customers, business leaders must first prioritize who they are targeting – new customers or familiar faces. The conventional wisdom in most consumer businesses, especially the restaurant, hospitality and retail sectors, is that 80% of a business’s sales comes from the top 20% of its customers – the “80/20 rule.” Following this logic, leaders in these sectors commonly make large investments in customer retention marketing strategies, often in the form of loyalty initiatives. These strategies can be expensive – paying for the incentives and the related technology and marketing – but the overwhelming importance of customer retention makes it worth the investment. No business wants to put 80% of its sales in jeopardy. But what if the 80/20 rule isn’t true? What if the most frequent customers are overvalued? Grant Thornton’s research into consumer markets reveals a different answer. There is no 80/20 rule – rather, most often, it’s closer to a “50/20” rule. “On average, 50% of a company’s sales come from the top 20% of its customers, not 80%,” according to Kevin O’Connell, a Grant Thornton managing director in Strategy and Transactions. “Why does this matter? Businesses are likely focusing too much effort on customer retention and frequency and missing their best opportunities for growth. The reality is that more than half the sales for almost all brands come from infrequent customers, and this is where most of the growth opportunities lie.” Businesses can’t grow effectively by simply focusing on their best customers. There simply aren’t enough of them. To achieve true growth, companies need to continually increase market penetration. Why do companies miss this insight? Many brands don’t have visibility to their whole customer base. When they do have broad customer data, the first instinct is to look for the most valuable customers and figure out how to create more of them. Unfortunately, the high-value customers tend to be a small group. They also tend to be “high frequency category users” – i.e., they’re the best customers for many brands. “If a business believes in the 80/20 rule and sees that the vast majority of their customers aren’t that frequent, the tendency is to double down on loyalty initiatives because they think they’re failing,” O’Connell said. “In reality, this is simply normal market behavior, and intensifying a focus on loyalty initiatives diverts resources away from the true source of growth – attracting more customers.” Our studies have shown that almost all consumer behavior could be described as “randomly frequent.” According to O’Connell, “‘Loyalty’ is not a driver of consumer behavior. People buy when they have a need or want, and those needs and wants differ depending on the variables in their daily lives.” Research by the Ehrenberg-Bass Institute for Marketing Science, a world leader in marketing research, has found that customer frequency patterns tend to “regress to the mean” over time – basically, today’s frequent customers may be less frequent tomorrow and vice versa. Why is that? Life happens. People experience big life events (move, get married, get a new job, have a child, start a new hobby, join a new group) and little life events (go to a meeting, work late, start a project, go to the gym, have friends over, watch a sporting event, read a book), and all these experiences affect demand – the products and services people need and when they need them. Brands don’t create demand. They capture share of customers in the market, and they do it through brand awareness and accessibility and differentiated products and experiences. The best loyalty strategy is to deliver a better, more consistent experience for the customers who have a need for the product. Analytics of customer behavior proves this. A coffee outlet that adds a drive-through window improves customer accessibility and experience, and its sales will increase. The key to winning customer decisions is to understand the key buyer values in your market and differentiate your business in a meaningful way from the competitive alternatives.

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Market penetration is the only sustainable winning growth story, and investments in customer acquisition efforts will deliver a better return over time. Customer retention vs. acquisition? The math is pretty clear.

Kevin O’Connell

Managing Director, Growth Advisory

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August 27, 2021

Customer segmentation in retail: 6 powerful client case studies, are you still talking to all of your customers the same way in today’s hyper-competitive retail environment, that just won’t cut it. you need to use customer segmentation to send each customer unique communications and offers. here are 6 case studies demonstrating the value of customer segmentation..

Customer insights and segmentation can help you unlock a new competitive advantage, identify opportunities to grow customer lifetime value, and optimize campaign performance.

By employing data-driven customer segmentation, you can improve your performance across every sales channel and customer touchpoint. Customer data platforms (CDPs) like Lexer can help you manage your data effectively, create valuable customer segments, and automatically update audiences across other retail systems.

In fact, Lexer is the CDP of choice for leading brands like Quiksilver, Igloo, Nine West, Rip Curl, Supergoop!, and more. Here are 6 case studies from brands and retailers who have used Lexer's customer segmentation tools to implement data-driven retail strategies and drive results.

Customer segmentation case studies for acquisition

Black diamond.

An excellent customer segmentation example as it pertains to customer acquisition in the retail space is the case of Black Diamond. The business aimed at growing its direct-to-consumer business to improve personalization, acquisition, and retention. This is with a backdrop of a healthy wholesale business and a small DTC team without a dedicated IT team that could provide actionable customer insight.

Black Diamond enlisted the help of the Lexer team to overcome these challenges. The team was in charge of providing customer data and gathering insights into their behaviors. The insights helped the brand develop an agile strategy for customer acquisition and retention campaigns across all its channels.

Using the Lexer CDP, Black Diamond was able to cut their cost-per-acquisition (CPA) in half and double their return on ad spend (ROAS) . Additionally, there was a 1,101% increase in the revenue per email when targeting lapsed customers. All of this was achieved using a 5-phased process which included collecting and analyzing historical data, targeted lead generation, and using Lexer's high-value lookalike audiences to improve customer acquisition.

Brand Collective

With the advent of Covid-19, Brand Collective was looking for a way to drive online sales as the performance of their traditional brick-and-mortar stores had significantly been affected. The brand wanted data on their customer base as they looked for new ways to engage these new customers who were increasingly digital-first shoppers.

Using the Lexer CDP, Brand Collective was able to gain holistic customer data in real-time. The easy-to-use Lexer platform built targeted segments across all marketing channels, including their email, mobile, and search. These yielded an action plan that helped the brand take on new opportunities and avoid the risks of the ever-evolving marketplace.

The Lexer team enabled Brand Collective to customize their digital campaigns and messages sent to their segmented audiences. This drove a 220% increase in return-on-ad-spend, a 2x increase in new customer acquisition, and a 5x increase in revenue from paid channels.

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Customer segmentation case studies for lifetime value growth.

The global surfing brand Rip Curl needed intelligent segmentation to help them identify high-level customers. Additionally, the team wanted to see an increase in impact while still minimizing its digital marketing campaign budget.

The brand decided on Lexer’s CDP to help it gain insights, perform advanced segmentation, and target customers. Additionally, Lexer helped them orchestrate omnichannel campaigns.

By working with the Lexer team, Rip Curl achieved an in-depth understanding of its customer, which would give the brand the insights it needed for high-value customer acquisition. Additionally, due to the advanced audience segmentation and automation, the business could now benefit from customer lifetime value growth.

Specific results included the achievement of 93% more revenue per segmented campaign in August and 15x higher income than the benchmark for Lexer segments.

PAS Group wanted to significantly reduce ad wastage, re-engage lapsed customers, and create unique customer experiences . Additionally, the group wanted its brands to stand out and grow revenue within the highly competitive fashion and apparel industry. All of these would be made possible by linking all customer data to help with data-centric decision-making.

Using Lexer's CDP, the brand was able to segment its customer audiences and deliver targeted campaigns to recent and lapsed customers on paid social and email. This resulted in a 4x return on their advertisement spending and an 18x overall return on investment. These were achieved through the unification of all online and offline purchase data with loyalty and engagement data, all of which provided a holistic view of PAS Group customer data.

Customer segmentation case studies for retention

Wondercide wanted to rely on the traditional direct mail in conjunction with digital campaigns to help with re-engaging high-value customers. By measuring key customer retention metrics and understanding the factors driving retention in their business, they were able to improve retention rates significantly.

Using the Lexer CDP, Wondercide sent out personalized direct mail postcards that drove an ROI of 600%. The direct mail reengagement campaign targeted lapsed and opted-out customers whose last order was within the previous year. It also targeted inactive customers who hadn’t interacted with the business within two years and lapsed customers whose previous orders had been more than two years past. As a result, the business experienced a 310% ROI for the opted-out segment, 203% ROI for the inactive segment, and 155% for the lapsed segment.

Mountain Khakis

In a bid to increase its holiday seasons sales, Mountain Khakis used the real-time insights provided by Lexer's CDP to activate segmented campaigns. Specifically, the brand was able to retarget its female gift-buyers with a "treat yourself” campaign that saw a 7.1x increase in sales 2-3 weeks post the campaign.

Additionally, the campaign resulted in a 5x return on ad spend from female customers. This translated to a 49% boost in sales just in time for Christmas and a 47% boost in total customers.

Effective customer segmentation begins with mastering your data

As a business, you need to lean on customer intelligence to orchestrate specific high-value customer segmentation.

Lexer’s customer data and experience platform provides you with customer insights tools , data enrichment tools , segmentation tools, and predictive analytics tools that helps your business identify and target the right audience. As the only CDP built for retail with native tools to support every customer touchpoint, we are well equipped to help you drive incremental sales from improved customer engagement.

Book a demo today to see how Lexer's powerful segmentation and personalization tools can help you drive incremental sales growth.

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