How do you plan to acquire customers? It may sound like a simple question, but your answer could make or break your business. Developing a well thought-out and detailed customer acquisition plan is one of the key fundamental components of a successful start-up.
Don’t fall into the trap of thinking “if you build it they will come”. While it’s true that providing a great product that meets a demand gives you a massive advantage, there’s much more to building an audience then simply opening your doors and waiting for the money to pour in. That’s where customer acquisition comes in.
Inbound vs. Outbound Marketing
Customer acquisition is all about two similar but distinct things: bringing people to your product and bringing your product to the people. This is the fundamental difference between inbound and outbound marketing.
Outbound marketing primarily involves what we think of as more “traditional” forms of marketing, including paid advertisements, cold calling and direct mail. Essentially, any time you directly engage consumers regarding your products, you’re performing outbound marketing.
Inbound marketing, on the other hand, refers to activities that bring customers to you. This includes such activities as content marketing, building a subscription-based e-newsletter and social media marketing. These activities encourage consumers to expose themselves to your brand and products willingly, whether or not they intend to make a purchase. You’re still engaging consumers, but you’re not forcing yourself on them.
There is certainly a role for outbound marketing in the modern marketplace – especially when marketing to baby boomers, one of the most valuable demographics – but the industry is turning heavily toward inbound marketing for one simple reason: that’s what most consumers are responding to.
With outbound marketing, customers stop coming when you stop paying into it, but with inbound marketing you can build a loyal and committed community around your businesses. When developing a customer acquisition strategy for your start-up, inbound marketing should be at the heart of it.
3 Steps to Creating Your Customer Acquisition Plan
1. Identify your goals
Everything starts with identifying your goals. Whether they are monetary, traffic or conversion based, the goals you initially set define what qualifies as “success” for your business.
Begin by deciding which kind of customers you want to attract. Millennials or baby boomers? High or low income? Single or family-oriented? Once you’ve identified your ideal customer profile, everything else becomes so much easier, from finalising the tone of your content and branding to having the confidence to know that when a customer comes to you, they’ve come to the right place.
Then you need to identify how valuable each customer is to you and how that’s going to affect your acquisition strategy. For example, if you’re dealing in high-cost luxury items, you can probably afford to spend a lot of time, money and marketing efforts to converting a single customer. If your business sells a low-cost, high-volume product, then you’ll need to cast a wider net.
In this way, your goals are going to shape your marketing, because whether your goal is to attract more visitors, convert more visitors into leads, or convert more leads into paying customers, the value of each of these customers is going to affect which types of acquisition strategies you should invest in.
2. Define your growth strategy
Now is the time to reverse engineer your customer acquisition plan. Look at your goals and ask yourself how you are going to get from point A (now) to point B (achieving the goal), then develop campaigns, tactics and strategies that align with those goals.
Use your customer profile. Will they respond well to email blasts and paid advertisements, or do they prefer to learn which businesses to trust through word-of-mouth and high quality content? The hard sell has gone out of style, so the growth strategies you develop will need to be built on inbound marketing tactics and reveal a deep understanding of your product, industry, and most of all, your target customers.
It’s important to constantly analyse your current strategy and test new campaign to identify just which tactics your target audience responds well to and which ones are having a negative effect on your growth. Use these tests to optimise your customer acquisition plan.
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3. Control your customer acquisition rate
As important as it is, customer acquisition is just one component of a successful start-up and should work in tandem with the other pillar of small business: product development. If you’re not careful, you could spend too much time working on one and not the other, and if your customer base growth is too quick (or not quick enough) for your product development, it could throw your entire business off-balance.
By developing more leads than your product can keep up with, you’ll risk developing a high churn rate and a negative reputation for providing sub-par or insufficient products. Conversely, by investing too much in product development, you’ll risk losing the revenue stream needed to pay for the development and waste precious resources working on products that suffer flaws due to insufficient consumer feedback.
Ultimately, advertising isn’t the be-all and end-all it once was. Large, wealthy companies used to be able to provide a poor-quality product and make it successful by pouring huge amounts of marketing money into it. Today, because people rely heavily on word-of-mouth and because news can spread faster than ever via social media, product and marketing are two sides of the same coin. A successful start-up can’t have one without the other.
A solid customer acquisition plan needs to respond to this reality. You need to be aware that consumers aren’t listening to you, they’re listening to what other people are saying about you. You need to be prepared to shape that conversation by providing good content, good product and good service. Customer acquisition isn’t about finding your customers, it’s about making sure your customers find you.