Customer acquisition is the holy grail of digital marketing. It’s also not cheap, which is why it’s crucial that you understand who your actual customers are before you spend a dime trying to get more. Luckily for you, there is data that you can collect and use to tell you who your customers really are and how much they will spend.
Get to know your current customers
The top data points that brands need to know about their customers are: age, gender, household income, location, and marital status. Why? Because Sarah, the single 24-year-old is going to have very different interests and buying patterns than Mary, the locked down 36-year-old with a little one on the way.
Getting to know who your most loyal customers are, and segmenting your customers into groups based on interests and needs, will allow you to come up with more personalized offers and increase the retention of the customers you are paying to acquire.
The Cost of Acquiring a Customer
Every brand will have a unique CAC (cost of acquiring a new customer). In order to find yours you should be looking at your organic data to establish benchmarks and work backwards from there, starting with your base CPL (cost per lead). How many organic newsletter signups or app installs are you getting? How many of those subscribers actually click on your offers? How many of those turn into paying customers? What is the average order value?
If you have a 10% conversion rate of organic newsletter subscribers to paying customers, and the average purchase price is $50, in theory you could be paying $5 to acquire a new lead. But, you should take into consideration that if your organic traffic is seeing a 10% conversion rate, that rate is going to drop down to 3-4% when you are paying for people to land on your page. So that mean you only want to be spending $1.5- $2 per lead and monitoring it closely.
Your CPL will never be consistent across all of your channels, or by customer segment. Which loops back to the importance of using data to understand who your customers are, how they are finding you, and what is resonating with them.
Different Data Points
At the end of the day, everyone wants to make a sale. Yet the truth is, there are multiple customer touch points that are valuable to your brand. Which is why you should be measuring customer engagement rates along with purchase rates… broken out by specific buyer segments of course.
How many times do your customers segments come back and reengage? Are they opening your emails? Clicking on your offers? Are they making a second purchase, or a third? What channels are driving them to your site?
The cost of retaining a customer is much lower than the cost of acquiring a new customer. Which means you need to have a complete understanding of how your customer segments are engaging most with your brand, so you know where to focus your energy and what to drop, in order to create an effective retention strategy.
Instagram might be the best way to connect with your Sarah’s, while exclusive email deals will get your Mary’s back in the door. It’s your job to create those personalized interactions and make an emotional connection in order to promote brand loyalty.
The idea of using mobile as a channel to acquire customers might seem intimidating at first, but the truth is there is so much data you can get through a mobile campaign that can give you the insights you need to understand who your actual buyers are.