Developing a customer acquisition strategy

Having a customer acquisition strategy is one of the most important parts of your overall business strategy.

After all, it doesn’t matter how great your product is if no one knows it exists. Product market fit is only the first step.

In this article, you’ll learn the key elements of acquisition strategy, the most common growth engines, and how to choose the right approach. Hopefully, this’ll help you avoid the pain of launching a great product that just cannot seem to reach its target audience.

What is a customer acquisition strategy?

In simple terms, a customer acquisition strategy is a set of processes and tactics that aim to bring traffic to your product.

These can range from dumping millions of dollars into TV campaigns to building a viral word of mouth.

Key elements of customer acquisition strategy

For product companies, a customer acquisition strategy usually consists of four main elements: Growth engine, fuel, lubricants, and temporary boosts.

Growth engine

Growth engines, sometimes called growth loops, are at the heart of your customer acquisition strategy. There are four primary growth engines:

• Virality
• SEO
• Performance marketing
• Sales

A growth engine answers the question of how your product can sustainably attract new users and how those new users can lead to more new users over time.

The truth is that 80 percent of your customer acquisition strategy success depends on choosing the right engine of growth for your product.

Fuel

Fuel is what makes your growth engine work. The more fuel you have, the more new customers you can acquire.

For example, if you’re betting your acquisition strategy on company-generated blog content, the fuel is the pieces of content. The more content you publish, the more fuel your SEO engine has.

Lubricants

Lubricants are what makes your growth engine efficient.

Back to the SEO engine example, although pieces of content are your engine’s fuel, if they’re low quality, target irrelevant keywords, and don’t have any backlinks, they won’t take you far.

On the other hand, growth lubricants aim to maximize ROI for a unit of fuel you put through your growth engine.

Temporary boosts

Although a healthy, well-oiled growth engine with abundant fuel is all you need for a sustainable customer acquisition strategy, you can also experiment with more ad-hoc initiatives.

Temporary boosts are one-time activities that can help you gain traction in customer acquisition.

Say you’re a software house that relies mostly on performance marketing to gain customers. Although this is your primary source of customers, you can also speak at technology-related conferences to demonstrate your expertise and gain new prospects.

Although speaking at conferences isn’t a sustainable long-term acquisition strategy, it can give you a temporary boost when needed.

Figuring out your potential temporary boots upfront will help you react faster in situations when you need to boost acquisition fast.

4 primary custom acquisition strategies and how to measure their success

There are four main growth engines that you can utilize for your customer acquisition strategy: SEO, virality, performance marketing, and sales.

SEO

Search Engine Optimization (SEO), sometimes referred to as “organic acquisition,” is one of the most common acquisition models out there.

SEO engines can be split into two categories:

• Company-generated content — Where the company generates the content that is then indexed by search engine
• User-generated content — Where users generate the content

For user-generated content, this engine works in the following way:

1. User/customer generates the content
2. Google indexes this content
3. Other people find this content via the search engine
4. Visitors turn into new customers

On the other hand, SEO engines based on company-generated concepts work similarly to performance marketing:

1. Employees generate the content
2. Google indexes this content
3. Other people find this content via the search engine
4. Visitors turn into paying customers
5. Revenue from customers can be reinvested into more content-focused employees

Fuel

For an SEO engine, the main source of growth is the pieces of content produced. The more content there is, the higher the chance that new visitors will find it on the search engine.

Lubricants

To maximize the ROI out of the content you produce, you should optimize for:

1. Quality — High-quality content has a higher chance of converting visitors into customers.
2. Relevance — The better keywords you target, the higher the chance that a relevant audience will find your content
3. Backlinking — The more other websites link to your content, the better it will rank on search engines

Measure of success

New customers per piece of content.

Virality

A virality-focused customer acquisition strategy is all about either word of mouth or intentional invitations. In this model, most of your growth comes from your current users inviting new users:

The engine is built on three main steps:

1. Current customers invite their friends
2. These friends accept the invite and become new customers
3. New customers are incentivized to invite their friends

Customer acquisition strategies of almost all social platforms, such as LinkedIn or Facebook, are built on viral growth engines.

Fuel

The virality model is all about the scale. You can’t build a viral product if you only have one customer.

The more people on your product, the healthier your virality engine.

Lubricants

There are two main things to optimize for in viral growth models:

1. An incentive to invite — People must have a reason to invite their friends. It can be either an explicit one (e.g., coupon code or cash bonus) or an implicit one (e.g., more friends to talk to on a social platform)
2. An incentive to accept — The same applies to the invitees. You need a strong incentive and a robust value proposition for invitees to join your product

Measure of success

Virality coefficient (How many new customers a single customer brings?).

Performance marketing

Performance marketing is all about putting money into paid growth channels, especially advertising.

This is a pretty straightforward engine:

1. You put money into ads
2. Ads bring new traffic
3. Part of this traffic becomes customers
4. Customers generate revenue, which you can reinvest into ads

The best part of performance marketing is the fact that it can start work well from day one, while SEO and virality require time to pick up.

Fuel

Capital is the primary constraint of performance marketing. The more money you can put into your marketing budget, the more new customers you can get.

Lubricants

Since money is the main fuel of this engine, you need to optimize for two main metrics.

1. Customer acquisition cost — How much money do you need to spend on ads to get one new customer?
2. Payback period — After investing $1 in an ad, how much time do you need to wait to get this $1 back?

Measure of success

Customers per $1 spent.

Sales

Let’s not forget about the good old sales.

The sales engine goes something like this:

1. First, your salespeople close deals and bring in new customers
2. These customers then generate revenue
3. You can use this revenue to hire more salespeople

This model works especially well if you are targeting a few but high-value customers or if your product is complex to explain and requires human explanation to understand fully.

Fuel

The sales acquisition model is all about the size of your sales team. The more salespeople you can get on board, the more customers you’ll close.

Lubricants

The primary metrics to optimize for are:

1. Average sales per person — The more new customers a salesperson can close, the better
2. Average revenue per customer — The bigger deals you can close, the better

Measure of success

ROI per salesperson.

Choosing the best acquisition strategy

Now that you have a sense of the four most common approaches to a customer acquisition, you might be asking yourself how you can choose the right one.

Although the exact answer depends on a variety of factors, the following provides a general framework:

Choose performance marketing if:

• You generate revenue directly from new users (e.g., new users purchase a product/subscribe to a service).
• Your target customers won’t be looking for the product organically (they won’t search for it on Google, etc.)
• Your solution provides quick time-to-value (thus reducing the friction of paying for it)

Choose SEO if:

• Your target users will organically search for things related to your product
• Your product has the potential to generate a large number of pages (auto-generated content/user-generated content)
• You can create your own content at a scale

Choose virality if:

• Your target segment is broad and inclined to self-reference (e.g., teenagers talking about new apps in school)
• Your product is better when used with friends or colleagues
• The network effect is the key to solving customer pain points

Choose sales if:

• Your target customers require high-touch service
• You can generate high revenue per user, yet the target market is limited
• The solution to the problem is somewhat complex and might be hard to describe without a pitch

How to boost customer acquisition efforts

Although usually unsustainable, boosts are essential to your customer acquisition strategy for a few reasons. Boosts can:

1. Help kickstart your growth — For example, it’s impossible to get virality going if you don’t have anyone on the product yet
2. Can provide compelling ROI — If you time them right, you might get a decent return on a dollar
3. Simply speed things up

Here’s a list of potential boosts you might want to try out:

1. Get PR presence
2. Create viral content
3. Host events and conferences
4. Speak at conferences
5. Run a dedicated marketing campaign
6. Engage with influencers to promote your product
7. Partner with other products to cross-promote
8. Run special promotions

The list above is just a starting point. Anything that can give you a spike in acquisition in a short time is a worthy acquisition boost.

Key takeaways

Building a great product is just the first step. You also need to let people know it exists. This is why it’s imperative to think about a solid customer acquisition strategy from day one.

There are many ways to describe customer acquisition strategy, but I find the car analogy the easiest. There are basically four main components:

• Growth engine is your primary mechanic for sustainable, scalable, long-term growth
• Fuel is what you must put into the growth engine to produce results
• Lubricants help you make your engine more efficient
• Temporary boosts help you kickstart the engine and gain some extra performance — just like nitro in sports cars

Choose the engine that best fits your product, make it efficient by optimizing relevant sub-metrics, and put as much fuel through it as you can. Don’t forget to treat yourself to an occasional boost every now and then too!

Featured image source: IconScout