Four creative ways to attract customers
By Pauline Muindi | September 15th 2021
The cost of acquiring customers can make or break a business. Yet many entrepreneurs fail to include customer acquisition as an important element in their business plans. While they might vaguely understand that they will have to advertise on online and offline channels, they don’t have details on the exact cost and value of each customer.
Customer acquisition is a key business metric that comprises the product cost and costs involved in marketing, research, and accessibility. It helps the company calculate the value of their customers, which is important in determining how much of the business resources you should spend on a customer so as to be profitable. It also helps calculate the resulting Return on Investment (ROI) of an acquisition.
It’s always in a company’s best interests to lower its costs of customer acquisition. In case the cost of acquiring a customer is high but their lifetime value is low, it is too costly for your business. By making efforts to reduce your business customer acquisition you can significantly increase its revenue.
Here are strategies to lower your customer acquisition costs while still making maximum profits:
Identify your target audience
To have highly effective marketing and advertising campaigns, you first have to define your target audience. Who is interested in buying your products or services? What are their pain points? What is the best way to reach them? What language do they speak?
Answering the questions above will help you develop strong marketing campaigns that speak directly to your target audience. Remember, today’s customers are looking for brands that they can connect with.
Conduct customer surveys to understand your customer needs and how you can meet them. According to a customer insight study by Accenture, 83 per cent of consumers are willing to share their data to enable a personalized experience.
Retarget online leads
Are you selling your products or services online? You know that while an advert can drive traffic to your site, it might not have immediate conversions. In fact, one study found that 97 per cent of people who visit your site for the first time leave without buying anything.
Some people might not be ready to make a purchase when they first find you. Others may get distracted before they complete a purchase. Unless you bring them back to your site, they’ll be lost forever.
This is where retargeting comes in. Retargeting is advertising strategy meant to remind your website visitors of your products and services when they leave without buying. Your website analytics can tell you which products and services each customer is interested in. That allows you to retarget them with relevant text and visual ads.
You can retarget customers using Google Ads, LinkedIn Ads, Facebook Ads and other online ad platforms. Retargeting not only reminds the customer of your products and services, it also builds brand awareness and loyalty, markets bestsellers in your inventory, and moves stagnant inventory. A retargeted lead is easier and cheaper to nudge down the sales funnel than marketing to a totally new one.
Improve your customer retention rates
Every savvy entrepreneur knows that loyal customers are the key to business success. Studies show that loyal customers spend 67 per cent more on products and services than new customers. Even though loyal customers might only make up 20 per cent of your audience, they provide up to 80 per cent of your business revenue.
Your existing customers won’t require you to constantly remarket your products to them. Experts estimate that new customers cost as much as five times more to convert than existing customers. Studies show that as little as a 5 percent increase in customer retention increases business revenue by 25 to 95 per cent.
Loyal customers will also happily become your unpaid ambassadors, recommending your brand to other people in their circles. The people they refer to your business are also more likely to become loyal customers themselves than those not referred This is because they already have a positive opinion of your brand. Studies show that the lifetime value of new referral customers is 16 percent higher than non-referral customers.
Some ways to improve your customer retention include creating a unique brand that connects with your target audience, providing high-quality products, invest in great customer service, and make it convenient to do business with you.
Optimise your sales funnel
How well do you manage the buying process for your customers? Do you understand why customers check out your products but don’t make a purchase? This is where optimising your sales funnel comes in.
A sales funnel is the journey that potential customers go through before they eventually make a purchase. The journey usually starts with awareness of a need and discovery of your products or services. It then progresses to evaluation, intent, purchase and finally, loyalty.
Having a well-managed sales funnel will give you information that provides insight into the thoughts of potential customers. You will be able to pinpoint any underperforming stages of the sales funnel.
For instance, you might realise that while customers put your products into their carts while shopping from your online shop, they don’t end up purchasing. This might indicate problems with the checkout process or tell you that customers find the shipping costs too high. This will give you a great starting point towards fixing your customers’ pain points and ultimately reducing your customer acquisition costs.
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