Customer Acquisition for Start-Ups

Customer Acquisition for Startups

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.

growth processImage source: http://ryangum.com/customer-acquisition-plan/

 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.

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Persuasion and the Path to Purchase

Path to Purchase Good2

As the e-commerce landscape is becoming increasingly saturated with more and more options for online shoppers, you may wonder what you can do to stay ahead of the competition. A few months ago, we had a few suggestions on how to stand out in a crowded market and how to prevent customer churn. Today, we’re offering some additional tips on how you can use centuries-old wisdom to attract and keep more customers on the path to purchase.

Aristotle for Today’s E-Commerce Business

Back in the 4th century, Aristotle wrote The Art of Rhetoric and explained the three modes of persuasion necessary for developing engaging, effective and persuasive speech. While Aristotle’s target audience were the wannabe-persuaders and philosophers of Ancient Greece, his insight is very relevant to modern day e-commerce marketing, operations and customer retention. Understanding each of these “modes of persuasion” will help you connect with your customers in a credible, emotional and logical way, and will help increase your sales.

Credibility (“ethos”)

Aristotle’s first mode of persuasion, ethos, is the credibility of your business, both the message and the management. In Aristotle’s time, if an audience were suspicious of your claims and motivation, they would not likely “buy in” to what you were saying. Similarly, if your customers are not convinced that your business is trustworthy, your website secure and your marketing message factual, then they’re not likely to purchase from you. Give your customers a reason to believe in you. If your customers believe you can deliver on your promises, then they’ll more likely purchase from you.

Ethos for your e-commerce

Tell customers who you are

While an ‘About Us’ section is important, you shouldn’t stop there. Reach out to customers in a personalised manner through social media, targeted emails and customer loyalty campaigns. Spending a little more time engaging customers one-on-one really pays off: online retailer Indochino saw a 540% jump in revenue after they started engaging with their customers with targeted personalised emails.

Explain why you’re the best

There are over 110,000 live e-commerce websites on the internet right now. With all of this choice, you need to make it clear why customers should choose you over your competition. Do you offer incredibly fast or low-cost shipping? Do you have a returns policy that beats the rest? Do you have the very best deals around? Rave about why you’re awesome and customers will take notice.

Include customer reviews

71% of customers will read a product review before buying it and 63% are more likely to buy a product if it is reviewed and rated. There’s no doubt that positive customer reviews can impact your sales, so make it easy for customers to write a review and even easier for potential buyers to read them.

Emotion (“pathos”)

The second mode, pathos, is the emotional connection you make with your customers. If you’re not aware of how buying from you makes your customers feel, then you’re not likely to have many customers at all.

Pathos for your e-commerce

Up the ‘happy’ factor

Customers need to know how your products or services will make them happier, smarter, more successful or less stressed. Don’t assume that your customers will make this connection on their own and in 15 seconds or less, the average time a buyer stays on a website. Captivate your audience as soon as they land on your homepage with clear, compelling and motivating content and branding.

Provide human customer support

Up to 60% of customers will pay more if they know they’re going to get great service. On the other hand, 89% of customers who’ve had a poor online shopping experience will never revisit that e-commerce website (and will tell all their friends about it!). Make sure your customer support team is helpful, thoughtful, empathetic and human. Love your customers and they’ll love you back.

Logic (“logos”)

The third mode, logos, is the logic behind your business. Once your customers believe that your business is trustworthy and that what (and how) you’re selling will impact their lives, making the purchase will be their next logical step. Just remember to make that path to purchase a logical and intuitive one.

When it comes to your e-commerce website, every step along the way from the landing page to the checkout page is your customer’s path to purchase. How well designed and easy to navigate your website is directly reflect how much effort, time and consideration you’ve devoted to your business and to your customers. Think about your customer’s journey so that they don’t have to think twice about buying from you.

Logos for your e-commerce

Hire a UX Developer

The raison d’être of a UX developer is to keep the customer’s experience in mind. A great looking website with great code isn’t enough – being aware of how your customers will respond to your website and how your website will lead your customers to complete the path to purchase need to be incorporate into the initial design plan, not glued on at the end.

Provide an easy-to-use payment provider and shopping cart

With as many as 74% of shopping carts being abandoned by online shoppers, it’s of the utmost importance that both your payment methods and shopping cart complement your website. Providing several payment options to customers can be advantageous but may also result in some confusion (and an increased chance of abandonment). Research both what’s available to your business and what’s preferred by your targeted audience.

Go mobile (now!)

85% of all online customers will also be mobile customers by next year and 65% of mobile shoppers prefer mobile sites to apps. While many website builders, like WordPress and Wix, incorporate responsive design into their templates, if you’re building your website from scratch, make sure that a mobile version is available. If this isn’t enough reason to go mobile, Google recently announced that it will rank mobile-friendly websites higher for searches initiated on a mobile device.

The three elements Aristotle revealed that would persuade an audience centuries ago are very much applicable today: ethos, pathos and logos. Persuade your customers to complete their purchase from you by making that path to purchase credible, emotional and logical. Oh, and mobile!

For additional conventional and unconventional articles on how to incorporate your customer’s experience at every stage of your e-commerce business, visit the DalPay Blog and follow us on Facebook and Twitter.

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