CUSTOMER ACQUISITION: Meaning, Costs, Formula & Calculation

Customer Acquisition
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Customer acquisition is undoubtedly one of the most crucial projects for any business because it revolves around bringing in as many high-value, in-market consumers as possible. Building a customer base, enabling customer loyalty programs, and reducing costs to increase return on investment are all made possible by it for brands (ROI). It might also be among the hardest initiatives. Brands must invest resources in understanding the prospect and offering a tailored and pertinent experience if they want to succeed. Here’s the deal: the value of your products or services is irrelevant unless there are customers who are willing to pay for them. Therefore, every business must intensify its customer acquisition strategies through advertising and marketing, paid and unpaid means. Although it definitely incurs costs, every business must build its customer acquisition process. It’s a good return on investment (ROI).

Customer Acquisition

Every business has one thing in common, and that is increasing revenue. Increasing revenue is possible and much easier when the business strategically pays attention to getting leads. Getting new clients is a process called customer acquisition. That sounds easy and simple, right? Unfortunately, it’s not as simple as it sounds. Generally, customer acquisition is a process that involve marketing strategies, a lot of expertise and a team of professionals.

Acquiring new clients or customers is a critical undertaking, and this is because there’s no business without customers. By quantifying the amount of money a business spends to acquire a new customer, brands may utilize customer acquisition to evaluate the worth of each paying customer. The profit is bigger, and the cost of acquiring a new customer is cheaper. Businesses use this measure to guide their marketing initiatives and increase profitability. In order to obtain new consumers, brands use customer acquisition marketing, which might involve developing plans and tracking results in order to grow their clientele while cutting costs. 

What Is Customer Acquisition?

The process of convincing prospective customers to purchase your goods or services. It actually begins with acquiring leads, nurturing the leads, and turning them into customers.

Despite the fact that every business is free to create its own customer acquisition strategies, the best place to begin is by thinking about the three stages of the customer journey where customer acquisition takes place.

Customer Acquisition Stages

There are three stages of acquiring new customers, they are as follows: discovery, consideration, and conversion.

#1. Discover 

Customers consider many possibilities to meet their needs when they are looking for solutions. This may be one of the first times someone has visited your website, frequently with the intention of reading material and getting to know more about your goods or services.

#2. Consideration

A customer’s actions, such as research, browsing, or signing up for notifications and specials, show interest. In comparison to other brands, they are determining whether or not your good or service can satisfy their needs.

#3. Conversion 

The act of making a purchase and so converting someone into a client. A sales funnel or sales acquisition process are other names for this three-stage procedure. It’s critical to comprehend how your clients go via this funnel so that you can adjust your customer acquisition approach to fit each stage. Please keep this in mind as we go on.

Advantages of Acquiring New Clients

All businesses are built on the acquisition of new customers. One of the most advantageous aspects of new customer acquisition is the fact that customers are extremely engaged when they are new to a brand, in addition to supporting a robust pipeline of new customers to counteract natural attrition.

Customer Acquisition Costs

The costs of customer acquisition ( CAC), are the expenses you’ll incur in the process of acquiring leads, nurturing the leads, and turning them into customers. How do you calculate customer acquisition costs? Every business can calculate its customer acquisition costs by multiplying the amount spent on acquiring customers by the number of customers attained. The costs of customer acquisition (CAC) would be $10 if a social media campaign cost $1,000 and resulted in 100 conversions.

There are no specific customer acquisition costs (CAC) that all firms agree are ideal. However, a suitable baseline statistic may be obtained by comparing the CAC to the client lifetime value (LTV). In general, the LTV to CAC ratio should be 3:1. If a customer has a $ 30-lifetime value, for example, a good CAC would be $10. The smaller the CAC, the better the profit margins.

Customer Acquisition Formula

You can use the following formula to determine customer acquisition cost: Customer Acquisition Cost is calculated by dividing the cost of sales and marketing by the number of new customers attracted.

Strategies for Customer Acquisition

When it comes to new customer acquisition efforts, there is a lot to study and test in order to identify the most successful tactics for a brand’s target market. A lot of self-evaluations for brands must be completed before they reach this stage. This entails identifying the channels that will work best for the brand and the customer, as well as their particular acquisition challenges.

Businesses can utilize a variety of ongoing customer acquisition strategies to improve clients’ acquisition after performing this self-evaluation:

  • Boosting engagement with video content.
  • Give stuff free to increase awareness of organic products.
  • Increase SEO and maintain client attention by using content marketing.
  • To generate authority and develop trust, employ consistent branding and clear communication.
  • Organize referral programs.
  • Create a rewards program to increase customer loyalty.
  • Make an affiliates-only program available.
  • Form partnerships and capitalize on their contacts to promote your products or services.
  • Use landing pages to promote new products and let customers concentrate on the innovative services your company is providing.
  • To save marketing costs, use newsletters to collect leads and subscribers.
  • publish stuff on external websites.
  • Make use of influencers who relate to your target audience and embody the spirit of your business.
  • Make sure that your paid search campaigns are tailored to your target market, geography, and product.

Customer Acquisition Examples

Let’s now travel through examples of customer acquisition from renowned software and retail firms. Use these tested customer acquisition strategies to engage customers, persuade new clients, and increase sales.

#1. Advocacy Lists

By encouraging customers to post actual images of themselves wearing their clothing on Instagram, Lululemon successfully uses the platform. The reason this campaign is successful is that it is based on the active brand lifestyle and demonstrates to viewers that the sportswear line is excellent for both casual wear and workout. An excellent method to involve customers, strengthen brand loyalty, and promote the company to social media users is to leverage brand advocates and user-generated content.

#2. PPC Advertising

Eloqua is very aware of who they are trying to reach. B2B readers like you and me drool when we see “Best Practices & Case Studies.” I suppose we’re at the top of the funnel. The appropriate word to start with is “find,” as that is what we are doing while searching on Google. A hyperlinked bulleted list of advantages is presented, together with supplementary values in grey, to assist in raising viewer knowledge and consideration of the software brand.

#3. Twitter Advertising

Hubspot approaches marketers like us with a message about their new Hubspot Academy. It’s shrewd because we are aware that customer “love” is what propels revenue, generates conversions, fosters engagement, and ensures retention.

#4. Referral Marketing

In order to encourage sharing, Tile does a terrific job of providing a straightforward points system for users and clearly displaying how many points we must accumulate before receiving a reward. Utilizing current consumers as brand advocates makes attracting new clients much simpler. We can all have our cake and eat it too in this fashion.

#5. Content Upgrade 

What reader who found value wouldn’t want to trade an email for ten nurturing suggestions and the entire guide? The motivational image makes use of plants arranged in ascending order to represent growth, the steadfast blue of the business, and an exhilarating orange to signify a “free” e-book. Overall, a really engaging and eye-catching content improvement that will definitely fill the funnel.

Customer Acquisition Process

The act of getting new clients is what the customer acquisition process is all about. Your brand should outline and create each stage of the process in advance. By doing this, you may create a road map that will make the process simpler. A company can always keep an eye on key parts of the road plan, identify any gaps, and make improvements.

Step 1: Determine the target market in step one.

You must first decide who your target market is. If you’re trying to reach more than one target group, it might be a good idea to have a different sales acquisition strategy for each of them.

The most effective customer acquisition methods also incorporate individualized elements that are catered to the specific person’s demands, interests, or behaviors. In order to identify and understand your audience, your brand might employ a variety of techniques, such as the ones listed below:

  • Creating a target prospect profile, also known as a client persona
  • Using online resources and focus groups to do market research
  • Reviewing brand-new client profiles.
  • Leveraging third-party competitor data
  • Identifying social and search trends and customer desires through online dialogues

Step 2: Develop a plan and outline your approach.

Utilizing data findings and industry best practices, you must develop a plan for the program’s launch and communication once you have identified and understood your intended audience. Don’t forget to consider where your audience might be in the customer journey. Your communications approach should be different from that used in the contemplation stage during the discovery stage.

To maximize acquiring new clients, your plan should combine the following elements:

  • a cross-channel activation plan that integrates direct mail, email, display, search, social media, and mobile.
  • A communications framework that considers digital voice and satisfies the needs and attitudes of your potential customers
  • a testing and evaluation technique that identifies key performance indicators (KPIs) for click-through rate, cost per acquisition (CPA), return on investment (ROI), and return on ad expenditure (ROAS)

Step 3: Start 

Once you’ve identified your target market, chosen your distribution channels, and established your KPIs, it’s time to launch your campaigns. During this stage of the process, your company needs to monitor all previously set KPIs and start gathering data.

Step 4: measurement and optimization.

The purpose of putting KPIs in place is to clearly identify what is working and what is not. The optimization process should never stop. The final goal is to halt efforts that aren’t yielding the greatest results, boost the efficacy of those that are, and halt any issues that were found during the monitoring process.

Customer Acquisition Marketing

Customer acquisition marketing is strategies that businesses adopt in converting clients and bringing in new, trustworthy revenue. Having a sound process in place will ensure that your customers move through your company and develop into reliable sources of income. By capturing your audience’s attention and maximizing your conversion strategies, you can enhance engagement and encourage customers to continue with your process through customer acquisition. Consequently, you can grow without spending all of your marketing money on paying for additional customers.

Customer Acquisition Marketing Techniques

Experts use various techniques to acquire leads. The best medium for your business will depend on your target market, your available resources, and the goods you sell. However, these are the ones that marketers pick to use most frequently:

#1. Producing Content: Blogging and Vlogging

Content is a necessary component of every marketing plan, but it has the most impact on prospects at the consideration stage of the customer acquisition funnel. Through high-quality content, prospects learn more about your company or products, moving them past the awareness stage. If you want customers to buy with confidence, you must first earn their trust.

#2. SEO

To get the most out of your material, optimize it for search engines like Google, YouTube, and Bing. This suggests that your content has a greater chance of ranking first and attracting more hits. This increases exposure among potential customers who are already familiar with your brand, both new and old. To help readers with their research, be sure to optimize your blog posts, e-books, case studies, and white papers. When possible, make use of alt text, internal links, subheadings, and keywords. Think about including scripts with your video content.

#3. Email

Email is a cost-effective and effective tool for acquisition marketing. Naturally, employing this channel will only allow subscribers to view your content. However, research claims that it engages users 40 times more than websites like Twitter or Facebook. Depending on what you want and how your prospects react, email can be customized, modified, and altered. If you commit enough money to this channel, your customer acquisition strategy will be a success.

#4. Online Network

The typical person spends 145 minutes each day scrolling through social media. As a result, this is a great chance to introduce them to your brand. And many marketers currently engage in this.

Without a doubt, social media is quite effective at increasing brand recognition. However, if you’ve made a connection with them, you may provide them with content that whets their appetite for your products. To achieve this, share the blog entries, images, and videos from your website. You can also create native content for any platform.

What Are the Types of Customer Acquisition?

There are several ways of acquiring leads who will, over time, become customers. The following are the various ways of acquiring customers.

  • Telemarketing, or telesales.
  • Paid advertising
  • Mailing by email, bulk mail, or post
  • Social media
  • Online advertising, Google Adwords.
  • Search engine optimization (SEO)
  • Obtaining clients through partners
  • Marketing through referrals and suggestions
  • Content marketing
  • Mobile marketing.
  • Referral program

What is a Customer Acquisition Strategy?

A customer acquisition strategy identifies the optimal combination of media and engagement tools (such as lead generation and product offers) to attract new clients by identifying them and reaching out to them online and offline.

Why Customer Acquisition is Important?

In order to establish a company and have a footing in the market, customer acquisition is essential for both bringing in new clients and growing income. It assists your business in gaining new customers.

What are the Main Sources of Customer Acquisition?

There are three stages to customer acquisition management activities:

  • Awareness.
  • Consideration.
  • Conversion.

What are the Three Parts of Customer Acquisition?

Getting potential clients to purchase your items is a process known as customer acquisition. A successful customer acquisition strategy: 1) draws in leads; 2) develops those leads until they are ready for sales, and 3) turns those leads into customers.

What is Acquisition CRM?

Customer relationship management (CRM) software makes it simpler to acquire customers over time. All corporate divisions must have access to the contact data and consumer information that the program collects and enhances.


Companies will go bankrupt if there’s no constant inflow of revenue. On the other hand, there will be no revenue if there are no buyers. So businesses look for ways to get customers, retain them and then, offer to get more customers. That’s basically what acquiring customers is all about and it’s an integral part of every organization.

Customer Acquisition FAQs

How do I measure customer acquisition?

Measuring the degree of your customer is simple. Simply divide the financial costs of acquiring customers (which are the cost of advertising and marketing) by the total number of customers acquired over a certain period.

What is the significance of client acquisition?

More customers is equivalent to more revenue. Customer acquisition is crucial for starting a business and establishing a market presence, from bringing in new clients to generating income. It aids in the acquisition of new customers for your business.

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