In an eCommerce business, there are two fundamental structures of revenue: top-line and bottom-line. The top-line refers to the amount of goods sold during a given period, or the total revenue. The bottom-line refers to the total profit generated by the top-line during a given period, or the net revenue.
In a perfect world, a company would have the same bottom-line values as the top-line values. However, this is often not the case, and it leads to lower profit margins and increased costs. This is where customer acquisition comes in.
It is defined as the process of attracting, converting, and retaining a given customer. In other words, it is getting someone to choose your brand over another.
Customer acquisition can include buying an existing customer or cold emailing an existing customer. These types of customers can be costly and not profitable for the business, but it is still critical to your growth strategy.
A good rule of thumb is that customer acquisition costs can be a multiple of the number of people you need. To keep this simple, this could be the number of active users, or the number of potential customers on your website. The company can decide what percentage of each person’s potential customer pool is active.
It all depends on how successful your company’s business is in its niche. This is why user acquisition is so important in the eCommerce industry.
The main difference in user acquisition between business models is the ability of a company to hire more people than they actually need. In a digital store, it is particularly important to recruit more, as the success of each individual sale may depend on how well the customer experience is.
It is also possible to get away with lower acquisition budgets for an eCommerce business if they are purchasing items from suppliers that don’t sell through a website. However, this isn’t the ideal situation and it certainly isn’t practical. It is very important to hire a large number of dedicated human resources in the form of marketing and sales staff.
The benefits of customer acquisition are enormous. In fact, the business with the highest ROI (return on investment) is not necessarily a business with the most revenue. Instead, it is the business with the best customer acquisition strategy.
Customer acquisition is beneficial to your business because it’s the fastest way to grow your business and reach your revenue goals. A good customer base sends the signal that your product is working, your product is meeting the needs of people, and they’re willing to pay you for it. Their pay not only keeps your doors open, but it opens up other opportunities for your business, like new or improved products, new services, partnerships, and the list goes on. Customers are the lifeline of your business, and without a strategy in place to acquire more, there’s no guarantee how long the business will last.
It all starts here. If you don’t know who your customers are, it will be hard to find them. No matter what strategies you have in place, if you don’t know who you’re looking for, it won’t work. For customer acquisition to be successful you have to know who your customers are, what problem they need you to solve for them, where to find them, and you need to know how to pitch your product to them so that they’ll know they need it. Everyone doesn’t need your product or service, but you need to know how to find those who do. Social media is a good place to start looking for your market.
This figure helps you to know the amount of revenue your business can expect to earn from a customer over the lifetime of the relationship. This can be used to measure how long it takes a business to recoup the investment required to acquire a new customer through sales and marketing and keep them. Knowing this will help a business know when they’re overspending on their customer acquisition strategies, so you won’t go in the red while you’re trying to build up your customer base.
Today, there are so many avenues to market your business. Regardless of the size of your business, there are one or more that make sense to use to help market your business to acquire customers. Some of them include:
Over 60% of people use search engines when they’re looking for a new service or product; over 40% use a search engine once they’re ready to buy. You can see the significance of being among the businesses that pop up during those searches. Search engine optimization (SEO) is the process of getting your website to rank high in search engines for certain keywords. When your site pops up consumers see you, and they know you have what they need or want, and this opens up the possibility of acquiring more customers.
As a business, you want to make sure you’re putting your information out there. When your business pops up, or the name is mentioned, you want people to know who you are. That can only happen due to content marketing. Content marketing is a way to consistently distribute valuable content to your customers and potential customers. You can get your information out through blogs, videos, infographics, ebooks, interviews, case studies, etc. Putting valuable content out there lets potential customers know you are an authority in that industry, they know you have what they need, and it builds trust in your brand. The key to content marketing is consistency. When you’re doing this consistently, consumers learn to know your brand and engage with you, and they become familiar with your product or service. Engagement is important even after the sale. That is someone you not only want to retain as a customer, but you want them to be a promoter of your product and share with other people.
It’s predicted that by the end of 2023 the number of email users worldwide will be over 4 billion. That dispels the myth that email is dead. Email is still a viable way of communicating, and businesses need to take advantage of this since so many people have active email addresses. Email is one of the most powerful ways to engage with possible consumers about your business. Email marketing uses email to develop relationships that can be profitable for your business. Just because a potential customer is receiving your emails doesn’t mean they want it.
They are always allowed the option to unsubscribe. Keep your content relevant and engaging enough that your readers will not want to opt out.
In 2019, nearly 4 billion people around the world were on social media, and Facebook is the platform of choice for most. Other platforms like Twitter, LinkedIn, Instagram, YouTube, Snapchat, and Pinterest are all in wide use as well and are good platforms to also look to when trying to acquire customers. It doesn’t matter which platform(s) you use. What does matter is that you know your market and the platform(s) they would most likely frequent. As long as you’re using it as a marketing tool, it doesn’t matter whether or not you’re using the others.
Never underestimate the power of the tongue. Word of mouth is a great marketing tool. 83% of Americans are more likely to purchase a product or service recommended by someone they know and trust. That can only happen when current customers are pleased with your product and are impressed with the overall service of your company. To ensure that customers are sharing your brand, have current customers leave reviews on your products, or have customer reviews on your site. This is sure to help you acquire more customers.
Your customers are already talking and saying good things about your business. Imagine how much more vocal they’ll be if they had an incentive. Offer rewards or referral fees to customers who refer paying customers to your business. Or offer rewards or discounts to new customers to encourage them to try your products. Referral programs do work and can even help to retain customers.
Influencer marketing is another way for those familiar with your products or services to get the word out but at a higher level. Influencers have large followings, and when they endorse your product, they’re not just sharing it with family and friends — they’re sharing it with thousands of people, at once.
Not everyone uses the internet. A small percentage of people rely on other means for learning the latest about new products and services. Some popular offline advertising methods are:
Automation is the key to being able to immediately interact with potential customers. Once you get their attention, you have to be able to reel them in. You can do this with follow-up emails. What if you’re on vacation, but a potential customer needs a response from you today. Automation is a good tool to have when potential customers need follow-up, and you don’t want to leave them hanging. By the time you return, they may have turned to the competitor. With customer acquisition, take your automation one step further. When your automated workflows are well-thought-out with targeted content, it’s even better.
Customer acquisition allows you to analyze and improve your business, and more importantly, allow you to uncover your customer base. There are many features in an eCommerce platform that allow you to determine who your customers are.
A customer acquisition strategy (CAS) is essentially a way to keep a customer happy long enough to either switch to your product or become a repeat customer.
For Your Product and Service, You Will Probably Want To Keep the Following in Mind When You Are Creating Your Customer Acquisition Strategy:
When Creating a Customer Acquisition Strategy, You Will Want To Consider Some Questions:
Your target customer is the person who benefits the most from your product or service. Usually, your target customer is the person who uses your product or service the most frequently.
Your target customer is also the person who is most likely to refer your product or service to others. As a company, it’s important to understand who your target customer is.
This is because knowing your target customer helps you better understand your customers and develop products and services to better meet their needs.
The first step in figuring out who your target customer is is to identify your target audience—the group of people that are most likely to use your product or service.
You might have the most compelling and unique product in the world, but if you don’t have the right audience to offer it to, you’re going to have a hard time getting the business success you want.
This is why many small businesses make the mistake of focusing solely on their products and services, while neglecting the customer acquisition aspect of marketing.
Customer acquisition has become increasingly important for eCommerce businesses. Depending on how many customers you plan to acquire, customer acquisition can cost anything between hundreds of thousands of dollars and billions.
If you are a brand owner, you have to make sure your products and services are compelling enough to draw people in. To achieve this, you need to make sure you have an emotional connection with your customers.
Put yourself in your audience’s shoes before you can expect to win customers over, you need to put yourself in their shoes. Study your customers’ preferences and the reasons behind them.
Do not be afraid to experiment and try something new to see how well it works. You may be surprised at the success of something new that you thought would never work. It is important to be realistic with your conversion goals and keep track of the results.
You can’t have visibility if nobody sees it. If your site isn’t getting visits, you need to figure out how to make it get more traffic. If you are an online entrepreneur, you’ll want to attract as many eyeballs as possible to your website. But how can you do that?
The obvious answer is to offer a compelling product (product quality, pricing, and proof) and a great customer experience. But, in order to be successful, you need to pull out all the stops to get customers to your online store.
The Internet has made information cheaper and easier to distribute than ever before. Yet, most businesses still struggle to attract new customers and get them to buy.
That’s because they don’t know how to use the Internet to market their business. There are many proven online marketing methods that businesses can use to get more eyeballs on their site and thus, more sales.
You can’t have visibility if nobody sees it. If your site isn’t getting visits, you need to figure out how to make it get more traffic.
Email marketing is still one of the most cost-effective ways of growing your brand. As long as you use it correctly, you can save a ton of money and get a ton of free marketing just for signing up for an email list.
Many people use email to test interest before they commit to a full website, and if they see that there is demand, they’ll proceed with a site. Once you’ve completed the process to create an email list, create automated emails using different formats such as opt-in forms. Learn more about how to automate your email marketing.
They’re great for keeping your customers in the loop, but make sure you don’t use a lot of words like “No” or “Whoa!” because people don’t tend to respond well to that kind of stuff. Always check your subject lines to ensure they’re engaging and relevant.
If you’re like most eCommerce merchants, your prices are too low and you’re priced out of the competition. You need to take action and raise your prices.
If your product descriptions aren’t engaging your customers, you’re wasting their time and making them mad.
According to a recent eMarketer report, “80 percent of online shoppers will leave a website if it doesn’t have adequate support, an issue the average e-commerce site doesn’t have.” If you’re not providing adequate customer support, you’re hurting your conversion rates.
If you want to grow your business, you have to give customers what they want. To increase customer acquisition and retention, you need a customer service team that can help solve customer issues quickly.
You have to invest in your customer support team, and you need to be available for customer questions 24/7.
We live in the digital age, and we expect everything to be accessible instantly. Some people say that even the phone is passé.
Investing in your pricing can provide much better results for your company. It means not only are you now willing to do a few things to get more customers to buy, but you’re willing to do them for more than just a quick buck. You’re now willing to invest more in your customer acquisition than your profits.
If you’ve done all the right things to build a great customer acquisition strategy, then there’s something that’s still missing from your efforts: your branding. You need to spend some time making your website, and your overall brand, attractive to your target audience.
Make sure you highlight the value of your products. Write testimonials, and use images, video, and quotes that are appealing to your target audience. If your website looks bad, it’s unlikely that your customers will give it a chance.
And if your website looks great but your branding is terrible, then your customers are going to leave you without even giving you a chance. When it comes to customer acquisition, you need to work on the outside first.
Partnerships are a great way to grow your sales, increase traffic, and increase conversions. They are also a great way to turn one-time buyers into loyal customers, because they can develop strong relationships with the people they work with.
Relationships can be very valuable to a business, whether you’re selling a product or a service. You want to make sure that you’re always working with people that you enjoy being around, because you have a lot more to gain from a good relationship than you do from a bad one.
You’ve done all the right things: you’ve built a site, you’ve invested in SEO, and you’ve been working on your branding and advertising. You’ve been doing everything you can to attract more customers, but acquisition still isn’t growing like you thought it would, and you’re wondering what you’re doing wrong.
If you’re looking for customer acquisition, you need to know what you’re doing. You need to know how to get customers to buy from you, and you need to know how to keep them coming back.
Everyone is obsessed with social media, and it’s no wonder. Social media is the most powerful customer acquisition platform you’ll find, and it’s much easier to build a following on a social media site than it is on a website.
For starters, social media followers are more loyal and will be more likely to shop from you and recommend your store to their friends. If you have the right platforms in place, you can collect customer data and learn which social channels best convert potential customers.
For example, if you’re selling fashion apparel, Instagram is a great platform to reach a younger demographic. Social media sites such as Pinterest or YouTube are great for selling arts and crafts.
Influencers can help you get more customers than you thought possible. They’ll give reviews, look at your product page and give you feedback.
When a buyer comes across an influencer they trust, they’ll likely purchase. When you buy from an influencer, you’re basically buying a review. They will write a review about your product and, more likely than not, they’re going to be positive about it.
They’ll also mention you and the brand to their followers. Want an example? Look at Alex Benjamin from Cake the Cat and his blog. A lot of his posts are about the product.
It’s also up to 100% ad free, which shows his love for you and your brand. You really need to stay on top of your social media accounts for customer acquisition.
The question you need to ask is: what is the value proposition? This is the first big strategic choice you need to make. It’s not going to make your money or your search engine rankings.
It’s something that you want to have all of your customers believing, so that they keep coming back. How do you want to build brand loyalty and sales for you? The value proposition has three parts: the product, the price, and the service.
You should have an understandable, logical explanation of your product, and an effective value proposition is an integral part of it. A value proposition is not a sales pitch. It’s an explanation of why your product is worth paying for.
It’s explaining why you offer the service you do, and it’s explaining why the price you offer is worth paying. It’s one of the best strategies for customer retention as well.
Your site is your first sales funnel. If you spend money on your website, it will be your most effective marketing channel. As with any other type of marketing, your website needs to have great content and create a great user experience.
You can choose any of these eCommerce platforms – Magento, Shopify, BigCommerce, WooCommerce, or others to create exceptional shopping experience that drives sales and delivers real business results. These platforms will help build an eCommerce business optimized for conversions with omnichannel solutions, website integrations, custom extensions, and more.
There’s no way to guarantee someone that they will convert or do business with you without a guarantee. By putting something up on your website, you’re ensuring that customers will come back to you over and over again.
While you may have competition, if you guarantee something, you have the power to bring them back.
There are several ways to have the consumer experience a particular product and when it will be delivered. The biggest reason most eCommerce websites use customer acquisition is the price point and services offered.
The best companies focus on getting high-value customers while minimizing costs for them and a substantial margin for the company. This allows the company to make the business profitable.
This also allows them to make strategic investment decisions without worrying about losing money.
We hope you’ve enjoyed this article about why customer acquisition is significant for eCommerce. The goal of customer acquisition should be to drive the best sales revenue possible and increase the profitability of your business.
In addition, it is very important to be realistic about what you can accomplish, and not expect to acquire a ton of customers right away. Good luck and go get those customers.
Mike Patel is the Founder and CEO of ioVista, a leading digital commerce agency specializing in eCommerce solutions. With a strong background in business and technology, Mike Patel has been at the forefront of driving digital transformations for businesses. He has successfully navigated the ever-changing landscape of eCommerce, helping companies leverage the power of online platforms to grow their brand, increase revenues, and optimize their digital presence. Under his leadership, ioVista has become a trusted partner with major technology companies: Adobe/Magento, Google, BigCommerce, Shopify, and Yahoo. He is dedicated to staying ahead of industry trends, adopting cutting-edge technologies, and continuously improving strategies to provide clients with a competitive edge. Mike’s commitment to excellence and client satisfaction is evident in every project ioVista undertakes.
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