You've poured your heart and soul into building an exceptional product. Now, where do you find your target customers? Not only do you have to find an acquisition that attracts potential buyers, but it also has to be sustainable.
Competition has increased, customers have become more picky, and the importance of a seamless customer experience has increased tremendously. As per Brian Halligan, co-founder and CEO of Hubspot, "the fundamental way that people shop, learn, and buy has changed radically in the last few years…".
In this blog, we will dive deep into 5 examples of customer acquisition tactics that have stood the test of time and have been effective no matter which stage your ecommerce business is in.
Customer Acquisition vs. Customer Retention
Before we step into the best ways to acquire customers, let's talk about the different roles that customer acquisition and customer retention play.
Acquiring a new customer is more expensive than retaining one, especially if your brand uses different channels to target new customers.
Here is a picture of the customer acquisition funnel:
Your customer acquisition efforts will go towards all the different phases of the marketing funnel. That is how you build consumer trust.
Customer retention, on the other hand, focuses on driving repeat purchases after you acquire a customer. It’s generally cheaper since you can use methods like email marketing to entice customer to repurchase. You could also use higher-cost methods like display ads.
Think of it this way: the purpose of customer acquisition is to gather the data of your new customers to use later. The purpose of customer retention is to increase customer lifetime value (CLTV).
💡Tip: Your marketing strategy may go to waste without proper customer service, no matter how many email campaigns your brand sends out. Customer satisfaction should always be a priority for ecommerce brands looking to grow.
How To Acquire Customers: 5 Strategies for Ecommerce Stores
While there are numerous strategies that you can use, the key to reducing your customer acquisition cost without hurting your acquisition is to find the right mix that aligns with your brand's goals and target audience. Keep reading as we explore the ones that can help your ecommerce business thrive.
Acquisition Strategy #1: Referral Marketing
According to a Nielsen survey, 84% of respondents believe word-of-mouth referrals are the most trustworthy recommendation.
This clearly shows how focusing on your current customers' positive experiences can transform them into your strongest acquisition channel. However, to fully take advantage of this potential, you need to make the recommendation process as simple as possible. So, how do you achieve this? You need to create a user-friendly referral program that encourages your current customers to share their positive experiences with friends and family.
Here's an example how: HexClad launched a Referral Program where the concept was to reward loyal customers with free gifts for referring friends to HexClad, with the value of the gifts increasing with the number of successful referrals. This partnership with Rivo resulted in generating over $450K in revenue within the first 90 days of launching the program.
The drawbacks:
What can possibly be the drawbacks of word-of-mouth marketing? Nothing, if you do things right. A lot of things, if you choose to launch a complicated referral program campaign.
By streamlining your word of mouth process and offering enticing rewards through Rivo’s referral program, you can effectively grow your customer base and boost your brand's credibility through trusted personal recommendations.
With Rivo you can:
- Set up tier-based offers for your customers
- Track your sales and gather first-party data
- Completely customize your website and designs as per your brand
- Strategically remind your customers about the wonderful rewards they'd get if they referred you to their friends
Best practices for launching a referral program
- Have an easy, frictionless sign-up form on your website.
- Remind your customers to share their referral links.
- Share success stories of past affiliates in your email marketing.
Acquisition Strategy #2: Organic Social
Promotions can create more buzz and excitement around your brand, especially when shared on social media. Therefore, building a strong presence on any of the social platforms is extremely necessary. It'll help you get more visibility, and build a community of people who'll support your business even beyond the initial transaction.
But how do you keep those social media interactions fun and entertaining? Here's are some fun things you can try:
- Run interactive polls on social media.
- Host lighthearted contests with fun prizes.
- Actively engage with comments to create a community on the platform.
Here’s an example from Glossier, the beauty and makeup ecommerce store: They feature user-generated content on Instagram to promote their lip balm which generated 42k+ likes. All because this post resonated with their target audience. And although we don’t know exactly how much money they made off of this one post, we can safely assume it led to a lot of sales.
The drawbacks:
While it is very rewarding, organic social and content marketing takes time to show significant results and requires a lot of patience. And although social media marketing is a great customer acquisition channel, it also helps with customer retention.
💡Tip: If you're just starting on organic social, focus on one social media channel. Your focus should be on producing quality content, not trying to be present on all social platforms.
Acquisition Strategy #3: Paid Social
Digital marketing is one of the more popular ways brands acquire customers. Paid social can help you acquire more customers by targeting specific demographics and interests. Plus, you’re running your ads where your customers likely are, like Instagram, Facebook, and TikTok.
The drawbacks:
With the rising costs of customer acquisition on Paid Social platforms, it’s probably not the most efficient place to put your money if you have a smaller budget. Not only do you have to think about in-platform costs, but developing creatives, running creative tests, and testing landing pages all require a significant amount of ad spend to keep running.
💡Tip: If you have a smaller budget, start by running your most popular organic social posts as ads.
Acquisition Strategy #4: Search Engine Optimization
A cheaper alternative to paid advertising is search engine optimization. Although you'll likely only see results in the long term, it's a great way for brands with lower budgets to rank higher in Google's search results, without having to spend thousands of dollars.
Here's what you need to do:
- Conduct keyword research. What are your brands likely to search?
- Have a content strategy. Write regular blog posts that are keyword-rich
💡Tip: This is a great way for smaller, local businesses to gain traffic.
Acquisition Strategy #5: Paid Search
Paid search is a popular customer acquisition method. Google ads can be very effective and can be more powerful (and make more sense) than paid social. This is because in paid search you are aiming to attract prospective customers who are actively looking for a product, unlike paid social where it's all based on what a customer may be interested in.
For instance, if someone searches for a copper water bottle on Google, there is a high chance that the person is actually looking to buy one. As long as you stay competitive compared to the other shopping and search ads that pop up, you'll benefit from search ads.
The drawbacks:
Because you’re running ads to higher-intent customers, paid search advertising can be more expensive. It’s a great platform for capturing demand, but not that great for demand generation.
💡Tip: With any ads, your landing page and website should be conversion rate optimized!
Acquisition Strategy #6: Influencer Marketing
People trust other people. And they especially trust the influencers they look up to.
Influencer marketing has always been a popular form of advertising. Should we remind you of the "Got Milk" advertisements?
And it's only growing. Brands have long been collaborating with well-known content creators or industry leaders to promote their products and gain more visibility. It's a great alternative to traditional advertising.
As a rule of thumb, always hire influencers whose audience base is exactly the people whom you want to reach. For example - if you have a fashion & apparel business, connect with fashion influencers with an audience base in your targeted demographic. If you have a furniture business, connect with home art & decor influencers.
This will give your brand access to a big audience of people with similar interests. And when the influencer promotes a product, their followers will be more likely to trust their recommendations and buy. This can be a powerful channel for acquisition with social proof from the influencer.
But do not get stuck on the follower count. Instead, focus on more important metrics such as the engagement rate. If someone with thousands of followers has a low engagement rate, that means their content doesn't resonate with their audience. So collaborating with them might not get you much sales.
To make things more interesting, you can launch a strong referral program with Rivo for your influencers and give them incentives to actively promote your products.
Here's how you can do that:
- Pay them per post, and give them a commission for each sale they generate.
- Offer tier-based rewards which will encourage them to promote your products consistently.
- Easily track the sales generated by each influencer without breaking your head trying to decode complicated analytics.
The drawbacks:
The trick here is to make sure that you choose the right person to partner with. As the industry is growing, the number of influencers is also skyrocketing pretty fast. And if you don't have much experience with it, it can burn your budget without leading to good results.
Bonus Tip 1: Collect Zero Party Customer Data
"Know your customers first, create your strategy later."
Ask the right questions, conduct quick post-purchase surveys, use ad attribution software, and collect data. Try to understand not just who buys from you, but also why they buy. Then you can tailor your marketing efforts to better meet potential new customers.
Here are some softwares you can use for your ecommerce store:
- KnoCommerce for post-purchase surveys: Send out a quick survey to every buyer to find out how they found you, why they chose to buy from you, and whether they're happy with their purchase or not.
- Triple Whale for Ad Attribution: Whenever a customer buys a product through an ad, you will have more insight into which ad specifically resonated with them and which didn't perform well.
Bonus Tip 2: Deep Discounts and Offers
There’s no denying the fact that we all love discounts, and so do your customers. Special offers and promotions such as Buy One Get One Free (BOGO), can draw in a huge pool of consumers who would not have otherwise explored your brand. This will significantly increase your brand awareness and sales.
But always running a sale could hurt your brand and reduce your profit margin drastically. So it's best to keep them as a welcome offer, or a seasonal offer.
Also, to balance your profitability, launch a strong referral program and capitalize the new pool of customers. They are more likely to refer you to their friends and family, driving additional organic growth.
Ready to optimize your customer acquisition strategy?
The customer acquisition process is lengthy, expensive, and there's no one-size-fits-all strategy. A successful customer acquisition strategy is an ongoing process that involves careful strategy, execution, and optimization. By applying the tactics suggested in this blog and remaining focused on the demands of your target audience, you can effectively attract new consumers, resulting in long-term growth for your brand.
However, with acquisition becoming more expensive, you must have a strong referral program in place to get the maximum out of every dollar you've spent to get that customer in the first place.
And, if you're looking to lower the customer acquisition costs associated with digital marketing, check out Rivo's referral program.
