5 Pointers For Your Customer Acquisition Plan
The process of customer acquisition for startups is far from being smooth and foreseeable. Multiple variables can affect your customer acquisition strategy, and you may have to wait long before you recover your costs. This mandates greater focus on the development of a strategy that can help you maximise customer acquisition while minimising unwanted expenses.
Regardless of the size of your startup, there are multiple aspects to consider while developing your customer acquisition strategy. If you have a look at the customer acquisition funnel, you will realise that very few prospective customers will end up buying your product. Considering the time, energy and cost involved in carrying out this process, startups cannot afford to have an ineffective consumer acquisition strategy in place. Here are a few aspects to consider while building your plan:
Correctly Identify Your Target Market
The first area of focus must be the correct identification of your target market. When you develop a product or service, there is usually a particular segment or population demographic that you are aiming to onboard. As an entrepreneur, you must be confident that you are investing your efforts in acquiring the right customers, failing which you are essentially taking a shot in the dark.
The second part of this exercise is to ensure that a majority of the consumers you are targeting will pay for your product and will not be free riders. Since most startups look to generate maximum revenue, it is necessary to convert a larger proportion of your potential customers into ones who pay.
Cost-Benefit Analysis
Most startups do not have significant spending capacities and need to manage their expenses efficiently. Customer acquisition cost (CAC) is the money that is spent on onboarding a new client and lifetime value (LTV) is the contribution that a consumer makes to your revenue over a period of time.
These two can be used in conjunction to help you analyse the costs and benefits of your customer acquisition plan. For any business to sustain itself in the long run, the lifetime value of a customer must exceed the cost of his acquisition. You should aim for a situation where the customer’s LTV is least twice the CAC.
Short-run Versus Long-run Plans
There are some hacks that startups can use to acquire its first few customers, such as scheduling meetings with them, handling their queries and personally following up. However, as you grow, you will realise that those strategies cannot be carried forward. There is a stark contrast in the way you approach your initial customers versus your subsequent ones.
Your long-run strategy will include automated replies, chatbots and leveraging SEOs. Thus, as you scale up, your tactics will have to evolve simultaneously. As a startup, you should pay attention to developing both strategies on time.
Narrow Down on Your Marketing Channels
Depending on your business, there will be numerous channels that you can leverage to sell your product. As a startup, you must consider all possible streams and understand the time and investment required to set them up. Once you have all the information, you should look to focus on 2 or 3 channels that will be efficient and effective.
Such a focussed approach will not only be useful in reaching out to your target audience but will also save you from unnecessary expenditure. You can distribute maximum funds in your best-fit channel and lesser in the remaining ones.
Create Your Space in the Market
One of the biggest challenges that a startup can face is creating a space for itself among the competition. Whether you are marketing online or offline, your customer should immediately understand what your product or service is all about. You can also choose to incorporate creative elements such as exciting landing pages or use of videos and graphics.
You can also present your customers with deals they cannot refuse. Discounts or free shipping offers can appeal to customers and they may try your product over a competitor’s. You can look to use such tactics to capture the market initially.
Bottomline
As a startup, your initial success is dependent on your rate of customer acquisition. If you can build your client base in your early days and instil confidence in them regarding your services, you will be able to retain them for the future as well. This will undoubtedly put you on the accelerated path to success.
