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The Essential Guide to Customer Acquisition

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The Essential Guide to Customer Acquisition

Customers are the lifeblood of any business.

Without new customers, businesses cannot survive, let alone grow.

In this guide, you’ll learn how to acquire more new customers for your business.

Here’s what we’ll cover:

What is customer acquisition?

Customer acquisition is the process of gaining new customers for a business.

Customer acquisition is not a “one-step” process. Most prospects don’t turn into customers instantly. Instead, they follow a journey:

  • Awareness – The buyer realizes they have a problem. They want to understand more about it.
  • Consideration – The buyer is looking for and comparing potential solutions to their problem.
  • Decision – The buyer purchases a solution.
Infographic of 3 stages of buyer's journey: awareness, consideration, and decision

So, in order to acquire new customers, you need to align your marketing with these three stages.

  1. Awareness – You need to appear in the consciousness or awareness of your potential customers. You’ll also need to show them your product or service can help to solve their problem.
  2. Consideration – You need to convince these prospects that they should choose your product or service.
  3. Decision – You need to “tip” these prospects over the finishing line. Common tactics include discounts and free trials.

How to create a customer acquisition strategy

Customer acquisition isn’t about executing a variety of tactics and hoping one sticks. You need a strategy, i.e., your battle plan. This is how you’re going to attract new customers and choose the right acquisition tactics.

Infographic of strategy vs. tactic: On left, map showing route from starting point to final destination; on right, map shows same thing but with dotted points within the route

Here’s how to create a customer acquisition strategy.

1. Identify your customers and where they hang out

If you don’t know who your customers are, you can’t attract more of them to your business.

That’s why the first step of your customer acquisition strategy is to figure out who your ideal customers are.

If you’ve done your market research and created customer personas, then this should be easy. You’ll already know who you’re trying to reach.

For example, here’s a simplified version of our ideal customer at Ahrefs:

SEO professionals and website owners who want to drive more traffic to their websites.

If you’re still in the early stages and don’t have a customer statement like this yet, don’t worry. You can use this guide to create one for your business.

Knowing who your ideal customers are will also help you figure out which marketing channels you should use. For example, we know website owners who desire more traffic are often searching on Google and looking for helpful guides.

This is one of the main reasons why SEO-driven content marketing is our main marketing tactic.

Experienced SEOs tend to hang out a lot on Twitter too, and that’s why we have a heavy presence there.

2. Set your goals

For your strategy to work, you need to know your destination. That is your goal.

Ideally, you should have goals for each stage of the buyer’s journey. But in reality, most companies have limited manpower, time, budget, and resources. So attempting to achieve goals for each stage may prove to be difficult.

In that case, you’ll have to prioritize. I suggest focusing on the area where you’re lacking the most currently.

For example, perhaps you may have a lot of traffic coming to your website (awareness). Yet you aren’t seeing any substantial increase in your sales (purchase). As such, you may want to set a goal and tackle the “problem area.”

Once you’ve identified what you want to work on, you should set a SMART objective to make it clear what it is you want to achieve.

  • ​​Specific – It should clearly state the desired outcome.
  • Measurable – It should be something you can track the success of.
  • Achievable – It should be realistic.
  • Relevant – It should align with your overall business objectives.
  • Timely – It should have a time frame attached to it.

For example, this is a good objective aligned with the SMART criteria:

Increase the conversion rate of your free trial to a paid subscription from 1% to 3% in the next 12 months.

3. Choose your customer acquisition channels

Based on what you’ve designed so far in your strategy, you should have an idea of which channels may work best to acquire new customers.

Pick one to two of the most suitable ones and begin experimenting with them. (More about the different channels in the next section.)

Customer acquisition channels

Here are some of the most popular customer acquisition channels you can experiment with for your business.

1. Search engine optimization (SEO)

SEO is the practice of optimizing a website or webpage to increase the quantity and quality of its traffic from a search engine’s organic results.

Pros

  • Passive, organic (almost free) traffic
  • Evergreen and compounding effects; article written a few years ago can still generate traffic if it ranks high on the search engines
  • Potential customers are automatically qualified by their search intents, e.g., someone searching “ahrefs vs moz” is closer to buying than someone searching “how to increase website traffic”
  • SEO content can influence entire marketing funnel

Cons

  • Ranking high on search engines takes time
  • Popular terms can get competitive (i.e., lots of time and resources required)
  • Return on investment (ROI) can be difficult to measure
  • Slower effects for newcomers; website with smaller number of high-quality backlinks and low topical authority may find it tougher to rank higher in the beginning stages

2. Content marketing

Content marketing is the process of creating and distributing content to attract and retain customers.

Pros

  • Educates potential customers
  • Builds loyalty and retention
  • Can go viral in the short term and create a lot of attention and awareness at once
  • Builds credibility
  • Can be the basis of other marketing channels (e.g., digital advertising)

Cons

  • ROI can be difficult to measure
  • Requires time to work
  • Content needs to be promoted and distributed; otherwise, attention may be scarce
  • Content must be high quality; otherwise, it can’t stand out from the tons of other published content

3. Digital advertising

Digital advertising is the process of paying a website or platform to reach its audience via ad space.

Pros

  • Fast way to get traffic; just set up an ad and get it running in a matter of minutes
  • Highly specific targeting (geography, age, gender, interests, etc)
  • Easy to measure and scale

Cons

  • Can be expensive (especially when scaling up)
  • Learning curve exists; costs time and money to figure out what works for your exact business
  • Suffers from symptoms like ad fatigue and banner blindness
  • Increasing use of ad blockers and third-party cookies blocking by web browsers may affect measurement and effectiveness

4. Influencer marketing

Influencer marketing is the practice of working with influencers—people who have an active, sizable audience—to promote your brand’s message, products, or services.

Pros

  • Good way to improve brand awareness
  • Popular influencers can “bestow” a halo effect on your brand
  • Can generate direct sales, e.g., via influencer-specific discount codes

Cons

  • ROI can be difficult to measure
  • No guaranteed returns when working with influencers
  • Risk of unwanted brand associations if you work with the wrong person
  • Limited control over creative or messaging

5. Email marketing

Email marketing lets you reach your prospects’ mailboxes with messages that either prompt direct action or aim to encourage prospects to create a long-term relationship with the brand.

Pros

  • Easily reach your prospects or customers directly (and at any time)
  • Emails sent can be highly personalized and segmented
  • Easy to measure

Cons

  • Takes time to organically build a quality email list
  • Overdoing it can cause you to break email marketing legislation (GDPR, CAN-SPAM, etc)
  • Can be competitive (people’s inboxes are flooded with emails!)

6. Video marketing

Video marketing is the process of creating and distributing video content to attract and retain customers.

Pros

  • Great for demonstrating how a product works
  • Can be later repurposed into other content formats (e.g., your script can be turned into a blog post; main video can be turned into multiple, bite-sized versions)
  • Engaging videos can capture and retain attention much more effectively than other formats

Cons

  • Very resource-intensive to produce one high-quality video, let alone many

7. Social media

Social media drives traffic to your webpages and creates engagement with your brand by means of social media platforms.

Pros

  • Organic, almost free traffic
  • Massive audiences can be found on different social media platforms
  • Can interact directly with your audience

Cons

  • Not easy to build a following on social media
  • Social media platforms may decrease your organic reach (to get more people to pay for ads)
  • May be at “mercy” of these platforms; you can get banned or removed anytime, which means losing all your following
  • May experience many negative comments and trolls

8. Referral programs

A referral program incentivizes existing customers to promote your brand to their family and friends.

Pros

  • Can be a low-cost way to acquire new customers
  • Builds customer loyalty

Cons

  • No guarantees that a referral program will work
  • Can’t “force” your customers to refer their friends

Customer acquisition examples

Here are some examples of how different businesses have acquired their customers.

1. Ahrefs – Content marketing

Ahrefs is an all-in-one SEO toolset that allows you to do keyword research, competitor analysis, website audits, content research, rank tracking, and more.

The main customer acquisition strategy we use at Ahrefs is SEO-driven content marketing. Here’s how we do it:

First, we find topics that our target customers are searching for on Google.

As mentioned earlier, our customers are often searching on Google for solutions to their problems. This makes SEO an ideal acquisition channel. Ranking high on Google also ensures that we get passive, organic traffic, as long as our content stays on top.

Line chart showing spike in traffic followed by passive search traffic

How do we find these topics?

  1. Go to Ahrefs’ Keywords Explorer
  2. Enter one or a few relevant keywords
  3. Go to the Matching terms report
  4. Switch to Questions
List of keywords with corresponding data such as KD, Volume, etc

As you can see, there are over 180,000 topics to choose from. We’ll eyeball the list and note down those that are relevant to our customers.

Once we have a list of topics, we decide which topics to target first using business potential.

Business potential: Table with scores 3 to 0. And explanation of criteria to meet each score.

We start with topics that have a score of “3,” then “2,” and so on.

With a list of topics to work on, we create content based on this framework:

2. Circles.Life – Referral program

Circles.Life is a digital telco based in Singapore. Despite entrenched competition from the three existing major telcos in Singapore, Circles.Life has managed to succeed. (I, too, am one of its customers.)

One of the main ways it acquired its customers (at least in the early days) was via its referral program. In fact, according to HireDigital, over 40% of Circles.Life transactions come from referrals.

Excerpt of referral page: top of page shows referral code, middle shows no. of friends referred; bottom is write-up of how referral program works

The success of a referral program depends on a few factors, but the main one is the incentive. An attractive incentive motivates customers to share; a bad one drives no action.

In this case, Circles.Life’s referral program succeeded because the prize was exactly what telco customers wanted: more data for low prices.

This is reminiscent of Dropbox’s referral program, which was also one of the main ways the cloud storage company acquired its first customers.

Recommended reading: How to Choose the Right Referral Incentives for Your Referral Program (With 20+ Examples!) 

3. Luxy Hair – Video marketing

Luxy Hair is an online store that sells hair extensions and hair-related accessories. With over 3 million subscribers on YouTube, it’s killing it.

Luxy Hair's logo; below it is no. of subscribers

Luxy Hair makes videos that get thousands, if not millions, of views.

Grid format of Luxy Hair's videos on YouTube

Each video features different ways of styling hair, taking care of it, and more. And each video—ding ding ding, you guessed it—features Luxy Hair’s own products.

The company then makes it easy for any viewer or subscriber to buy by including the relevant links in the video description.

Video description box showing relevant links to Luxy Hair products, influencer featured in the video, etc

Recommended reading: The Four-Part Formula That Got Luxy Hair 2.8 Million Subscribers on YouTube

Here are some frequently asked questions related to customer acquisition.

How do you calculate customer acquisition cost?

Customer acquisition cost (CAC) is the average amount of money you spend to acquire a single customer.

This is calculated by dividing your customer acquisition expenses by the number of acquired customers.

CAC = Total amount spent on marketing/Number of new customers acquired

For example, if you acquired 10 new customers after spending $1,000 on your marketing, your CAC would be $1000/10 = $100.

What is the average customer acquisition cost?

According to Shopify’s research, here are the average CACs by industry:

  • Arts and entertainment: $21
  • Business and industrial: $533
  • Clothing, shoes, and/or accessories: $129
  • Electronics and/or electronics accessories: $377
  • Food, beverages, and tobacco products: $462
  • Health and beauty: $127
  • Home and garden: $129

Don’t take these benchmarks as gospel. These numbers are averages and can differ depending on your brand, exact market, average order value, and more. You should always relate your CAC to your own business.

Why is customer acquisition cost important?

Many businesses calculate the CAC because they want to lower it.

However, trying to reduce your CAC in isolation is not a good idea. Most of the time, reducing your CAC and being more effective in marketing don’t necessarily go hand in hand.

If your CAC is too low, you may actually be limiting your exposure and under-spending on your marketing activities. Your balance sheet may look good in the short term, but you may be missing out on substantial growth opportunities in the long term.

So, rather than strive to pay as little as possible, aim for marketing effectiveness.

To do this, you should use CAC in relation to your customer lifetime value (CLV). This is a metric that estimates how much money an individual customer will spend on your products or services.

Here’s how CLV is calculated:

Avg. order value x Avg. annual purchase frequency x Avg. customer lifespan

Take this into account, alongside your customer base growth and overall marketing effectiveness, when deciding if you should adjust your CAC.

Recommended reading: How to Use & Reduce Customer Acquisition Cost (CAC)

What is customer retention?

Customer retention happens after a customer is acquired. The goal of customer retention is to keep your customers with your brand for a long time.

This is because a loyal customer is more valuable to a business. Not only will they buy more (and buy more frequently), but new customers are also often more expensive to acquire.

Customer acquisition and customer retention are not mutually exclusive. Both are important to a business’s growth and survival and should exist at the same time.

Some marketers even argue that customer retention should actually take precedence over customer acquisition—after all, there’s no point filling a leaky bucket.

Recommended reading: What Is Customer Retention? 11 Examples and Strategies to Retain Customers

How do you measure customer acquisition?

Besides CAC and CLV, which metrics should you measure?

This depends on the exact tactic you’re using. I recommend reading the guide below for a sample of the most important customer acquisition metrics you should be tracking.

Recommended reading: 25 Marketing Metrics You Should Consider Tracking

Final thoughts

If you want to acquire new customers on a consistent basis, you need a strategy. Create one and then execute only the tactics that move your business ahead.

Did I miss out on anything important about customer acquisition? Let me know on Twitter.




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State Of Marketing Data Standards In The AI Era [Webinar]

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State Of Marketing Data Standards In The AI Era [Webinar]

Claravine and Advertiser Perceptions surveyed 140 marketers and agencies to better understand the impact of data standards on marketing data, and they’re ready to present their findings.

Want to learn how you can mitigate privacy risks and boost ROI through data standards?

Watch this on-demand webinar and learn how companies are addressing new privacy laws, taking advantage of AI, and organizing their data to better capture the campaign data they need, as well as how you can implement these findings in your campaigns.

In this webinar, you will:

  • Gain a better understanding of how your marketing data management compares to enterprise advertisers.
  • Get an overview of the current state of data standards and analytics, and how marketers are managing risk while improving the ROI of their programs.
  • Walk away with tactics and best practices that you can use to improve your marketing data now.

Chris Comstock, Chief Growth Officer at Claravine, will show you the marketing data trends of top advertisers and the potential pitfalls that come with poor data standards.

Learn the key ways to level up your data strategy to pinpoint campaign success.

View the slides below or check out the full webinar for all the details.

Join Us For Our Next Webinar!

SaaS Marketing: Expert Paid Media Tips Backed By $150M In Ad Spend

Join us and learn a unique methodology for growth that has driven massive revenue at a lower cost for hundreds of SaaS brands. We’ll dive into case studies backed by real data from over $150 million in SaaS ad spend per year.

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GPT Store Set To Launch In 2024 After ‘Unexpected’ Delays

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GPT Store Set To Launch In 2024 After 'Unexpected' Delays

OpenAI shares its plans for the GPT Store, enhancements to GPT Builder tools, privacy improvements, and updates coming to ChatGPT.

  • OpenAI has scheduled the launch of the GPT Store for early next year, aligning with its ongoing commitment to developing advanced AI technologies.
  • The GPT Builder tools have received substantial updates, including a more intuitive configuration interface and improved file handling capabilities.
  • Anticipation builds for upcoming updates to ChatGPT, highlighting OpenAI’s responsiveness to community feedback and dedication to AI innovation.

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96.55% of Content Gets No Traffic From Google. Here’s How to Be in the Other 3.45% [New Research for 2023]

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96.55% of Content Gets No Traffic From Google. Here's How to Be in the Other 3.45% [New Research for 2023]

It’s no secret that the web is growing by millions, if not billions of pages per day.

Our Content Explorer tool discovers 10 million new pages every 24 hours while being very picky about the pages that qualify for inclusion. The “main” Ahrefs web crawler crawls that number of pages every two minutes. 

But how much of this content gets organic traffic from Google?

To find out, we took the entire database from our Content Explorer tool (around 14 billion pages) and studied how many pages get traffic from organic search and why.

How many web pages get organic search traffic?

96.55% of all pages in our index get zero traffic from Google, and 1.94% get between one and ten monthly visits.

Distribution of pages by traffic from Content Explorer

Before we move on to discussing why the vast majority of pages never get any search traffic from Google (and how to avoid being one of them), it’s important to address two discrepancies with the studied data:

  1. ~14 billion pages may seem like a huge number, but it’s not the most accurate representation of the entire web. Even compared to the size of Site Explorer’s index of 340.8 billion pages, our sample size for this study is quite small and somewhat biased towards the “quality side of the web.”
  2. Our search traffic numbers are estimates. Even though our database of ~651 million keywords in Site Explorer (where our estimates come from) is arguably the largest database of its kind, it doesn’t contain every possible thing people search for in Google. There’s a chance that some of these pages get search traffic from super long-tail keywords that are not popular enough to make it into our database.

That said, these two “inaccuracies” don’t change much in the grand scheme of things: the vast majority of published pages never rank in Google and never get any search traffic. 

But why is this, and how can you be a part of the minority that gets organic search traffic from Google?

Well, there are hundreds of SEO issues that may prevent your pages from ranking well in Google. But if we focus only on the most common scenarios, assuming the page is indexed, there are only three of them.

Reason 1: The topic has no search demand

If nobody is searching for your topic, you won’t get any search traffic—even if you rank #1.

For example, I recently Googled “pull sitemap into google sheets” and clicked the top-ranking page (which solved my problem in seconds, by the way). But if you plug that URL into Ahrefs’ Site Explorer, you’ll see that it gets zero estimated organic search traffic:

The top-ranking page for this topic gets no traffic because there's no search demandThe top-ranking page for this topic gets no traffic because there's no search demand

This is because hardly anyone else is searching for this, as data from Keywords Explorer confirms:

Keyword data from Ahrefs' Keywords Explorer confirms that this topic has no search demandKeyword data from Ahrefs' Keywords Explorer confirms that this topic has no search demand

This is why it’s so important to do keyword research. You can’t just assume that people are searching for whatever you want to talk about. You need to check the data.

Our Traffic Potential (TP) metric in Keywords Explorer can help with this. It estimates how much organic search traffic the current top-ranking page for a keyword gets from all the queries it ranks for. This is a good indicator of the total search demand for a topic.

You’ll see this metric for every keyword in Keywords Explorer, and you can even filter for keywords that meet your minimum criteria (e.g., 500+ monthly traffic potential): 

Filtering for keywords with Traffic Potential (TP) in Ahrefs' Keywords ExplorerFiltering for keywords with Traffic Potential (TP) in Ahrefs' Keywords Explorer

Reason 2: The page has no backlinks

Backlinks are one of Google’s top three ranking factors, so it probably comes as no surprise that there’s a clear correlation between the number of websites linking to a page and its traffic.

Pages with more referring domains get more trafficPages with more referring domains get more traffic
Pages with more referring domains get more traffic

Same goes for the correlation between a page’s traffic and keyword rankings:

Pages with more referring domains rank for more keywordsPages with more referring domains rank for more keywords
Pages with more referring domains rank for more keywords

Does any of this data prove that backlinks help you rank higher in Google?

No, because correlation does not imply causation. However, most SEO professionals will tell you that it’s almost impossible to rank on the first page for competitive keywords without backlinks—an observation that aligns with the data above.

The key word there is “competitive.” Plenty of pages get organic traffic while having no backlinks…

Pages with more referring domains get more trafficPages with more referring domains get more traffic
How much traffic pages with no backlinks get

… but from what I can tell, almost all of them are about low-competition topics.

For example, this lyrics page for a Neil Young song gets an estimated 162 monthly visits with no backlinks: 

Example of a page with traffic but no backlinks, via Ahrefs' Content ExplorerExample of a page with traffic but no backlinks, via Ahrefs' Content Explorer

But if we check the keywords it ranks for, they almost all have Keyword Difficulty (KD) scores in the single figures:

Some of the low-difficulty keywords a page without traffic ranks forSome of the low-difficulty keywords a page without traffic ranks for

It’s the same story for this page selling upholstered headboards:

Some of the low-difficulty keywords a page without traffic ranks forSome of the low-difficulty keywords a page without traffic ranks for

You might have noticed two other things about these pages:

  • Neither of them get that much traffic. This is pretty typical. Our index contains ~20 million pages with no referring domains, yet only 2,997 of them get more than 1K search visits per month. That’s roughly 1 in every 6,671 pages with no backlinks.
  • Both of the sites they’re on have high Domain Rating (DR) scores. This metric shows the relative strength of a website’s backlink profile. Stronger sites like these have more PageRank that they can pass to pages with internal links to help them rank. 

Bottom line? If you want your pages to get search traffic, you really only have two options:

  1. Target uncompetitive topics that you can rank for with few or no backlinks.
  2. Target competitive topics and build backlinks to rank.

If you want to find uncompetitive topics, try this:

  1. Enter a topic into Keywords Explorer
  2. Go to the Matching terms report
  3. Set the Keyword Difficulty (KD) filter to max. 20
  4. Set the Lowest DR filter to your site’s DR (this will show you keywords with at least one of the same or lower DR ranking in the top 5)
Filtering for low-competition keywords in Ahrefs' Keywords ExplorerFiltering for low-competition keywords in Ahrefs' Keywords Explorer

(Remember to keep an eye on the TP column to make sure they have traffic potential.)

To rank for more competitive topics, you’ll need to earn or build high-quality backlinks to your page. If you’re not sure how to do that, start with the guides below. Keep in mind that it’ll be practically impossible to get links unless your content adds something to the conversation. 

Reason 3. The page doesn’t match search intent

Google wants to give users the most relevant results for a query. That’s why the top organic results for “best yoga mat” are blog posts with recommendations, not product pages. 

It's obviously what searchers want when they search for "best yoga mats"It's obviously what searchers want when they search for "best yoga mats"

Basically, Google knows that searchers are in research mode, not buying mode.

It’s also why this page selling yoga mats doesn’t show up, despite it having backlinks from more than six times more websites than any of the top-ranking pages:

Page selling yoga mats that has lots of backlinksPage selling yoga mats that has lots of backlinks
Number of linking websites to the top-ranking pages for "best yoga mats"Number of linking websites to the top-ranking pages for "best yoga mats"

Luckily, the page ranks for thousands of other more relevant keywords and gets tens of thousands of monthly organic visits. So it’s not such a big deal that it doesn’t rank for “best yoga mats.”

Number of keyword rankings for the page selling yoga matsNumber of keyword rankings for the page selling yoga mats

However, if you have pages with lots of backlinks but no organic traffic—and they already target a keyword with traffic potential—another quick SEO win is to re-optimize them for search intent.

We did this in 2018 with our free backlink checker.

It was originally nothing but a boring landing page explaining the benefits of our product and offering a 7-day trial: 

Original landing page for our free backlink checkerOriginal landing page for our free backlink checker

After analyzing search intent, we soon realized the issue:

People weren’t looking for a landing page, but rather a free tool they could use right away. 

So, in September 2018, we created a free tool and published it under the same URL. It ranked #1 pretty much overnight, and has remained there ever since. 

Our rankings over time for the keyword "backlink checker." You can see when we changed the pageOur rankings over time for the keyword "backlink checker." You can see when we changed the page

Organic traffic went through the roof, too. From ~14K monthly organic visits pre-optimization to almost ~200K today. 

Estimated search traffic over time to our free backlink checkerEstimated search traffic over time to our free backlink checker

TLDR

96.55% of pages get no organic traffic. 

Keep your pages in the other 3.45% by building backlinks, choosing topics with organic traffic potential, and matching search intent.

Ping me on Twitter if you have any questions. 🙂



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