What is Customer Acquisition? Importance and optimal strategy
Customer Acquisition is a process to bring about marketing campaigns that help businesses attract and urge customers to buy the company's products or services. Customer Acquisition also brings many benefits to businesses from sales to market share. Let's learn about this topic with 1C Vietnam through this article!
1. What is Customer Acquisition?
Customer Acquisition is the process of attracting and calling on customers to buy a company's products/services through marketing campaigns. The main goal of customer acquisition is to increase sales, revenue and expand the market share of the business.
Customer Acquisition Cost (CAC) is the cost a business must pay to attract a new customer. This is considered an important index to help businesses measure the effectiveness of investment marketing campaigns and channels.
2. Distinguish between Customer Acquisition Cost and Cost per Acquisition
Customer Acquisition Cost (CAC) and Cost per Acquisition (CPA) are two different but important metrics in measuring marketing effectiveness. The following is a table comparing two types of costs with the corresponding criteria:
Criteria | Customer Acquisition Cost | Cost per Acquisition |
Customer oriented | Customers from a registration list or from people who have purchased products/services from the business | Potential customers, people who are interested in the product/service even though they have no experience using it or have not paid a fee to experience it |
Target | Measure the cost a business needs to pay to attract and convert a new customer into the system | Measure the cost of customer acquisition and conversion, including actions like registration forms, ebook downloads,... |
Calculation formula | Total marketing costs / number of new customers attracted in a certain period of time | Total marketing costs / number of conversion actions (number of ebook downloads, form registrations,... |
For example | Expenses incurred for advertising campaigns, events,... | Production costs, employee salaries, software costs for Marketing,... |
3. The importance of Customer Acquisition
Customer Acquisition brings many necessary benefits to businesses, attracting customers helps evaluate the effectiveness of marketing activities and other benefits. Specifically:
3.1. Evaluate the effectiveness of marketing activities
By calculating Customer Acquisition Cost and comparing it with the ROI index, businesses can evaluate the effectiveness of marketing campaigns and adjust strategies accordingly.
3.2. Plan a more effective marketing strategy
Based on Customer Acquisition Cost data, managers can make more rigorous decisions about continuing or stopping marketing campaigns, thereby optimizing costs and bringing in more customer data at a lower cost. short.
3.3. Boost sales and expand market share
Optimizing control of marketing strategy is an important factor in enhancing customer attraction strategies. Attracting more customers will increase sales and help businesses expand market share. This increase also proves the position of businesses in the economy.
3.4. Increase brand recognition
To ensure sustainable growth, businesses need to focus on retaining current customers and continuously finding new customers, especially through the Customer Acquisition strategy. By entering new market segments, managers have the opportunity to create new touchpoints and increase brand recognition in the market.
3.5. Optimize Customer Acquisition Cost
In marketing strategy management, tracking and evaluating Customer Acquisition Cost (CAC) is very important. If CAC costs are high, managers need to consider making timely adjustments to limit resource waste. Conversely, if CAC costs are low, it could be a sign that the campaign is working effectively, generating high returns with low investment.
3.6. Optimize ROI (Return on Investment)
While the initial cost of attracting and retaining new customers is what matters to a business, with an effective marketing strategy, ROI can still be optimized. In some ways, administrators will see the relationship between Customer acquisition and ROI.
Therefore, businesses need to continuously evaluate the performance of marketing campaigns to determine which channels deliver the highest ROI and make resource adjustments to achieve the best results.
4. Effective customer search channels, cost optimization
Customers are at the heart of all business activities, representing the group of people to whom a business's products and services are directed. To find target market segments, the following channels will help businesses reach customers effectively:
4.1. Content marketing and communication channels
Content marketing and owning a private blog to communicate for your business is an effective way to create and share valuable content with customers. Writing blog posts not only helps attract the attention of new customers, but also provides useful information and answers customer questions, thereby building trust and increasing conversion opportunities.
4.2. Video Marketing/ Short videos
Video Marketing, especially short videos, is becoming an important communication channel in businesses' marketing strategies. Creating quality, attractive videos helps businesses connect better with customers, increasing interaction with target audiences.
Although it requires an investment of time and resources, the effectiveness of video marketing can significantly change the development of a business in a short time.
4.3. Social Media Marketing
Social Media Marketing is an important part of the marketing strategy, allowing businesses to reach and interact with customers effectively through social networking platforms. By sharing interesting content as well as actively interacting with customers, businesses can build better relationships, increase accessibility and create virality for their brand.
4.4. Email Marketing
Email Marketing is a different form of outreach but no less important than other channels because of its effectiveness in marketing products/services to customers. Sending promotional emails can help businesses reach a large number of target customers effectively and cost-effectively. However, to be successful in Email Marketing, businesses need to take care of this customer group regularly, provide valuable content and ensure email interactivity.
5. Customer Acquisition optimization strategy
Searching across channels helps attract new customers and expand your customer network. However, to achieve this goal, applying a Customer Acquisition optimization strategy is indispensable. These campaigns help businesses attract and retain customers and bring high operational performance. Let's explore three Customer Acquisition optimization strategies in more detail below.
5.1. Identify target audience and market segments
First, identifying target customers and market segments is a necessary step in establishing an effective marketing strategy, helping businesses clearly identify the customers they want to target. From there, businesses can easily focus resources on attracting and retaining customers with the highest paying ability. Therefore, businesses will better understand customers' needs and desires, helping to optimize product/service marketing costs.
5.2. Increase customer lifetime value (CLV)
Customer lifetime value (CLV) is an important indicator that helps businesses evaluate what a customer brings during their lifetime. Increasing CLV value helps businesses optimize profits from each customer, thereby minimizing customer ownership costs and increasing profitability.
This can be achieved through providing quality service, creating a positive experience for customers, regularly interacting and creating long-term relationships with them.
5.3. Reduce dependence on advertising
Developing Inbound Marketing and optimizing email marketing are effective ways to reduce dependence on advertising and reduce customer ownership costs. Instead of spending big on online advertising campaigns, businesses can use email marketing to reach and interact with target customers more effectively. This strategy helps optimize costs and increase the opportunity to create value from each customer.
Above is useful information about Customer Acquisition with details such as definition, importance, customer search channels and strategies to optimize Customer Acquisition that 1C Vietnam has presented. Please contact 1C Vietnam for more information and answers to your questions