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Branding Marketing

6 Ways to Reduce The Cost of Customer Acquisition

By: Robert Wallace

Have you checked the ROI of your customer acquisition efforts recently? Cash-strapped startups (ahem, most of them) need to be especially vigilant about customer acquisition costs. Many don’t have dedicated marketing and advertising budgets or a stable of sales reps to help find new customers. But consider yourself lucky; even just a few years ago, new companies didn’t have access to the budget-friendly customer acquisition tactics described below. These are tactics that work with all companies, regardless of size, maturity or product or service.

1. Incentivize customers to share

Word-of-mouth marketing is huge. Ninety-two percent of people say they trust “earned media,” such as word-of-mouth or recommendations from friends and family, above all other forms of advertising (source: Nielsen). The point is, don’t tell them you’re great, motivate others to do that for you. Find an effective way to leverage word-of-mouth marketing with your current (satisfied) customers and reap the benefits (see case studies on Uber, JackThreads and Coin).

2. Offer a free trial

If you’ve ever received a drink or dessert on the house at a restaurant, you know how quickly and powerfully goodwill can be engendered. Confident that your product or service will sell itself once someone has used it? Offer a free-trial, even just a small taste, and measure how it affects your conversion rates. (A word of caution…”freemium” can be very effective, but make sure you’ve contemplated how you’re going to convert the free trial to a paying customer before you start giving things away.)

3. Engage influencers and tastemakers

It doesn’t have to be as dramatic as being on Oprah’s celebrated favorite things holiday list but the strategy is to attract the attention of influencers who will then help create buzz and credibility. Consider that building credibility with your target customer doesn’t happen overnight; it takes an investment in time and usually a healthy marketing budget. There are many way that you can begin building credibility — from a cohesive content strategy to events and tradeshows. We know these tactics, if done correctly, result in increased conversion rates. However, we’ve found, as has Eloqua, that a much faster and less costly route to customer acquisition are “influencer” endorsements which can boost traffic six-fold and double conversions.

4. Automate your follow-up

On average, it takes seven interactions with a brand before a prospect will convert into a customer. It still amazes me how many marketing dollars direct marketers spend to acquire the attention of prospects and how few put the correct follow-up tools and software into action. Some of my favorite tools that don’t require a lot of time are action-based email marketing (take a look at ExactTarget, InfusionSoft and Marketo, all excellent options depending on what stage your company is in) and Retargeting (I like AdRoll). These are just a few ideas; startups have countless choices to maintain regular contact with prospects and customers.

5. Hyper-target your audience

Get directly in front of the right audience and make sure your marketing message speaks directly to their pain point. With consumers giving away more personal information than ever, tools like LinkedIn Ads, Facebook Ads and Twitter Ads there for the taking to get in front of the right segment at the right time and spend relatively few ad dollars doing so.

6. Test, test and test again

The name of the game here is optimization. When looking at different channels of customer acquisition, and your target demographics, you have to test everything and measure the results. From tone to headline copy to font to colors to accompanying images to calls to action to page layout, every detail makes a difference.

Written by Robert Wallace

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