Tag: Customer Retention

How to Gain New Customers and Reduce the Cost of Acquisition

We all hope that we can get new customers on the fly with as little spend as possible. Unfortunately, such optimism is rarely rewarded.

Customer Acquisition Cost (CAC) has been (rightly) called the startup killer. New entrepreneurs often have an unfounded optimism in whatever they’re offering. In doing so, they end up greatly underestimating how expensive getting a customer can be. 

Those that have been in business know that acquiring a new customer can cost seven times more than selling to an existing one. And, depending on the industry, it can cost you between $7 to $395 to get a new client. 

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Sounds discouraging, right? 

Indeed, customer acquisition is hard. But, the real devil’s in the details here. Much of what we know here comes from statistics that average out much of the results. 

In other words, there are plenty of companies that are just doing customer acquisition wrong. So, here are a few ways you can decrease your CAC while increasing client satisfaction.

Follow a Customer Onboarding Process

Your sales and marketing might be misaligned. Your customer success team might end up dumping all the info on them at once. Or, you may not have a repeatable process in the first place. 

There’s just too much that can go wrong with client onboarding which can drive up your acquisition cost.

Building a better customer onboarding workflow will help you reduce customer acquisition costs and increase retention. Think of how you can help your customers get the best out of your product. 

A good onboarding process should include —

 

  • An easy account registration process.
  • A succinct, but well written welcome message.
  • Reminders for clients who haven’t logged in a while.
  • A step-by-step guide to product setup.
  • Educational material to help clients leverage your product as effectively as possible.
  • Milestones for each task completed by the client in the onboarding process.
  • Robust after-sales support.

 

You can even consider creating customized solutions for clients if need be. Your onboarding workflow should make sure your client never has to sit and wonder what to do next. 

Don’t Forget Email

In their quest to become social media stars, many brands end up ignoring email to no end. Big mistake. Unlike the clunky clutter of a social media feed, the inbox is deeply personal.

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Says Brian Greenberg, CEO of True Blue Life Insurance, “The power of email is that it goes directly into a consumer’s inbox. Then it stays there. Most people don’t delete things out of their inbox, so if they need to pull up a thread you’ve had together or want to find your latest offer, all they have to do is search their inbox real quick. I’ve had people contact me at True Blue Life Insurance using a seven-month-old email.”

Some ways you can use email for customer acquisition — 

 

  • Use the reciprocity principle. Offer your prospects something free in return for their email.
  • Try cold emailing. A good cold email is a personal message and solves a problem.
  • Send follow-up messages after your first ones. 
  • Don’t spam, though. Really, don’t.

 

The popularity of email continues to grow, so, consider adding them to your marketing arsenal. If you’re strapped for time, then you can use a service like Designmodo that offers tested, high converting email templates.

Send gifts

Gifts have an advantage over other promotional methods — they forge a deeper emotional connection. And customers with such a connection with a brand have a 306% higher LTV than those that don’t. 

Most marketers today stick to electronic gift items. Redeemable coupons, gift cards, feature upgrades, etc are all popular giftable items. 

For example, GetEarlyBird.io, a new Fintech service for helping parents invest in their children’s future adds $15 to every new account opened. This is a great strategy for new SaaS companies. 

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That said, don’t write-off the humble old direct mail gifts just yet. Nothing can quite beat a direct mail gift item. They’re memorable and are more visible than their digital peers. 

Use Chatbots

No one page on your website can answer all of your prospect’s questions. And, most of them don’t have the time to find what they are looking for anyway. 

This is where Chatbots can really come in handy. Now, they can’t replace a human and have had us lol with their answers at times. But, chatbots have come a long way today. 

They can answer most general questions and can even direct users to desired resources. They also don’t take breaks and are present 24/7. 

Their acceptance rate is also climbing. For example, twice as many consumers were willing to engage with a chatbot in 2019 than in 2018. Likewise, 74% of users actually prefer to use chatbots to find answers to simple questions.

They have also been used very successfully. JoyOrganics uses a highly customized chatbot that not only offers chat but has links to FAQs right in the chatbox itself. 

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Go local

Unfortunately, many companies mistakenly think customer acquisition through the internet is all about going big. The world’s their oyster, after all. 

But, don’t forget about your local market space either. The people in your immediate vicinity can relate to your product better than those living half a world away. 

Besides, local SEO is better suited to small businesses such as restaurants, dry cleaners, home repair, etc. 

Local SEO helps slash your customer acquisition costs in a few ways. Firstly, having an office in a city helps your clients see your presence upfront. Secondly, you can forge better relationships with people you actually meet. Your local following can also help you build a better brand (think KFC). 

Customer acquisition gets hard and expensive when you’re more concerned with the sale than with helping customers. All the methods described above work best when used to forward as much benefit as possible. 

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The post How to Gain New Customers and Reduce the Cost of Acquisition appeared first on Social Media Week.

http://socialmediaweek.org/blog/2021/02/how-to-gain-new-customers-and-reduce-the-cost-of-acquisition/

Recent post on the Online Marketing Hub – The Only 3 Business Goals You Ever Need

New post on Online Marketing Hub

The Only 3 Business Goals You Ever Need
by christopherjanb

Are You Focused On The Wrong Objectives?

Before you say, sales, sales, sales, understand that every company is in business to create sales that yield profits.

To this end, you need to focus on the right business goals.

Sales by themselves aren’t enough to generate profits. Your top line can keep increasing but if your costs are so high that you loose money with every sale, you’ll eventually go out of business.

Back in its early days in the mid to late 1990s, Amazon sold books at 50% off their cover price.

At the time, book margins were 45-50%; this was the amount that book retailers paid to purchase the books. I know this because at the time I competed with Amazon. I ran 6 book clubs for the US division of Bertelsmann, known as Bookspan.

Once you add the cost of marketing, shipping and operations to the cost of the books Amazon sold, the firm had little or no money left to cover other costs, let alone contribute to profits.

Why did Amazon do this? Because Jeff Bezos had a long-term vision for Amazon focused on customers. Specifically,

Amazon built its housefile of customers to grow their business. In the process, it collected a lot of information about them and their purchase behavior.

Amazon developed customer loyalty that’s become the core of their business. They’re the only ecommerce site that still requires customers to sign in before purchasing. As a result, Amazon can send prospects appropriate messaging if they leave products in their shopping basket.

While you probably can’t shake Amazon from their dominant online commerce position, you can learn how to improve your business.

The ONLY 3 business goals you ever need
Like Amazon, your firm must focus on 3 key business goals to build your base of profitable customers.

1. Acquire new customers.

These are members of your target market who have never purchased from your company before.

Understand that if you only focus on acquiring new customers, you’ll have a very high churn rate, the number of customers who leave as a percentage of your total customer base.

Also, you won’t have the opportunity to recoup the money you invested in acquiring the buyer in the first place.

Actionable Marketing Tips:

Develop your marketing persona to better understand your target market since they’re similar to your existing customers. Based on recent Content Marketing Institute and MarketingProfs 2015 B2B Content Marketing Budgets, Benchmarks and Trends for North America research, companies create an average of 4 personae. (Here’s the full analysis of the research.)
Examine who is purchasing from your competitors and near substitutes. Take your blinders off and consider both direct competitors and broader based competitors. One of the biggest mistakes I find marketers make is thinking very specifically when they assess competitors.

2. Retain existing customers.

Many marketers are on a hamster wheel; they continue to attract and convert new customers without trying to mine their current buyers for additional sales.

Yet retention sales are more profitable since you don’t need to pay for media and advertising to promote them, that’s a sunk cost that you’ve already absorbed.

On-going promotion in the form of content marketing and social media enables your firm to generate more profitable sales since you know your audience and have a way to connect with them without finding them again on third party media. (Here are 3 types of post-purchase content.)

Actionable Marketing Tips:

Encourage additional purchasing with the first sale. When customers checkout, offer them related or additional products. This is easiest to do when you’ve got a coordinated product database. If you don’t have a database, just offer customers your most popular product – not your most expensive one!!!
Provide a good customer experience. Roughly 20% of customers leave and NEVER return due to a poor customer interaction.
Include another offer with the purchase receipt. Customers are most excited about your company when they first purchase. Take advantage of this. Provide relevant information to improve purchase use and make them a related offer. Ask for reviews and social shares.
Create a series of relevant, non-promotional information. 64% of customers want to be contacted via email or text. Based on purchases and marketing personae, offer regular targeted content. Use email with links to your products.
Send regular content. Don’t be a nag. Send on-going promotions on a schedule that correlates with your editorial and promotional calendars. Be careful not to over mail your customers and prospects.
Skip the overt promotion. Remember that today’s savvy customer doesn’t want to be sold.

3. Reacquire former customers.

Get customers who have stopped buying from you to purchase from your firm again. Go for the ones that were profitable. They’re less expensive to acquire since you already have their contact information and don’t need third party media or advertising. (If they’ve unsubscribed from an email list, then you can’t contact them again!!!)

Getting a former customer to buy from your company again creates a second lifetime value. Therefore you can make them an offer to purchase again.

Actionable Marketing Tips:

Find out why customers stop buying from you. Where possible get additional feedback as to the specific reason an existing customer is leaving. While they may not be forth coming about the reason, try to incorporate this question into your customer service and sales processes.
Assess your customer file on a regular basis to determine when customers have stopped purchasing from your company. Don’t just arbitrarily decide. Instead re-market them after they haven’t purchased in a specific timeframe that’s related to your product usage cycle.
Send past customers a special offer to start purchasing from your firm again. It’s a good idea to make a few regular promotions before you try a winback offer.

The bottom line is that customers are your firm’s lifeblood. You need people to keep purchasing from your organization or you’ll go out of business.

Therefore, the ONLY 3 business goals your company ever needs focus on your customer base. You need to acquire new customers, get your current customers to buy more or related products, and reacquire former customers.

What do you do to keep your customers purchasing from your firm?

Happy Marketing,
Heidi Cohen

Heidi Cohen is the President of Riverside Marketing Strategies.
You can find Heidi on Google+, Facebook and Twitter.

For more about This Article or Content Marketing see:
http://omhub.wordpress.com/2014/10/08/the-only-3-business-goals-you-ever-need/

Recent post on the Online Marketing Hub – The Only 3 Business Goals You Ever Need page posted “By Mike Armstrong”