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Customer Acquisition: How to Calculate It and Create a Profitable Strategy For Your Business

Photographs of three consumers being drawn to brands based on their mobile, print and digital marketing

Whether you’re a new entrepreneur trying to win over your first 10 customers or a seasoned veteran acquiring your 10,000th, customer acquisition never stops being relevant.

But for many business owners, sales can be unpredictable, and gaining new customers can feel like a game of chance.

If you want to grow your business consistently and profitably, you need to think of customer acquisition not as an outcome but as a process—one that considers how you can systematically acquire new customers, the cost to get them through your door, and how much money each one will spend with your business.

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What is customer acquisition?

Customer acquisition is the process of finding and persuading prospective customers to buy from your business in a way that is both measurable and repeatable—not random. Whether you’re selling wholesale or direct to consumers, you need a customer acquisition strategy. 

Customer acquisition happens in stages, which are often visualized as a customer acquisition funnel:

customer acquisition funnel

The customer acquisition funnel visualizes the journey a potential customer takes. Marketers and entrepreneurs often discuss the funnel as having three main stages:

  • Top of the funnel (awareness). At this stage, your goal is to generate awareness and leads amongst your target audience. Typically, you’ll focus on a large, broad audience that may be interested in your company’s brand or products but who don’t have a definite intent to buy. A baby brand may use the hashtag #nurserydesign on Instagram to expose its posts and products to those looking to decorate their nursery. 
  • Middle of the funnel (consideration). Prospective customers that move from the top of the funnel to the middle have usually taken an action that shows they are considering a purchase, such as signing up for an email list or following your brand on social media. It is now up to you to convince them to become customers. 
  • Bottom of the funnel (purchase). This is the final stage a prospect goes through before they convert into a customer. Usually, they have taken some action that indicates a strong intent to buy, whether it’s adding a product to their cart or signing up for a free trial. Businesses will often send incentives, like a discount code, at this stage in order to convert prospects who are close to making the decision to buy.

There are many different ways a business can go about finding and converting these new customers, especially online. With digital marketing, it has become easier to track exactly how your business acquires new customers, discover and test new marketing tactics, and scale those that work.

Calculating customer acquisition cost (CAC) 

Almost every new customer comes with a cost that can be calculated based on the marketing effort put forth to acquire them.

In order to know whether your customer acquisition efforts are working, you will need to understand how to calculate your customer acquisition cost (CAC).

Your customer acquisition cost is the total cost of marketing divided by the number of new customers acquired.

For example, say your Instagram page brings in 50 customers a month and you spend $500 creating content. Your customer acquisition cost would be $10:

marketing spend ($500) / new customers ($50) = CAC ($10 per customer)

The reason businesses calculate their customer acquisition cost is to understand if their marketing approach is profitable. Using the above example, if each customer is spending $50 on average on their first purchase from your business and your gross margin on each order is 50%, your profit would be $15 on each order.

average order value ($50) x gross margin (50%) - customer acquisition cost ($10) = profit ($15)

For brands with a higher customer lifetime value (LTV), it may even make business sense for their customer acquisition cost to not be profitable on the first purchase. If your customer data tells you that the customers you acquire will likely continue buying from your brand after their initial purchase, you may be able to afford to spend more to acquire each new customer.

By using Google Analytics, Shopify Reports, and other tracking/reporting tools, it’s possible to know your customer acquisition cost for each marketing initiative. Experimenting with different customer acquisition strategies, and attributing the results, is the key to unlocking new ways to grow your business.

Average CAC by industry 

Now that you have a better understanding of how to calculate your CAC, let’s look at how much it costs to acquire a customer by industry. Our research shows that for ecommerce brands with less than four employees, the average CAC is: 

  • 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

CAC by industry

8 customer acquisition strategies to try

Pumping money into marketing campaigns doesn’t mean you’ll see a high return on your investment. To create a profitable marketing strategy, you want to use the right customer acquisition channels. 

Let’s explore some of the customer acquisition strategies you can use to grow your business and how to prioritize them. 

  1. Paid advertising
  2. Influencer sponsorships
  3. Email 
  4. Referral programs
  5. Traditional advertising 
  6. Search engine optimization
  7. Audience building
  8. Content marketing 

1. Paid advertising 

One of the most common ways to acquire new customers is through online advertising. The reason many ecommerce brands turn to Facebook, Google, and other platforms to run ads is that they provide extensive measurement tools that allow you to optimize your ads and get the most out of your budget.

When it comes to online advertising, Facebook ads and Google Ads are among the biggest providers for paid traffic. But almost every other social platform, marketplace, or search engine you can think of offers the option to buy ads, so deciding which one to use is a matter of understanding who your customer is and where they spend their time online.

glossier facebook ad
Makeup brand Glossier uses social media ads to find customers online.

 

Although each paid advertising platform has its particularities, they mainly all charge for user impressions (how many times your ad is seen), using a metric called CPMs (cost per one thousand impressions).

They also usually allow advertisers to choose who they want to target, based on demographics, interests, and other traits. By using these targeting parameters provided by an online advertising platform, you can narrow in on prospective customers and acquire them through paid ads. 

Advantages

  • Fast growth. If you’re looking to rapidly scale your business, some would argue the quickest way to do it is by paying for traffic. Your business is guaranteed to get exposure, and with the right strategy and optimization techniques, businesses have been able to quickly increase their budget to acquire customers rapidly. 
  • Targeting abilities. One of the great advantages of paid ads is the ability to choose exactly who your ads are shown to. With Facebook Ads, for example, you can use Interest and Behavior targeting to reach practically any unique niche based on user behavior on the platform. 

Potential pitfalls

  • Expensive. There is an ongoing discussion about rising CPM costs year-over-year on popular online ad platforms like Facebook, due to algorithm changes and competition. While it’s still possible to acquire customers profitably, brands may need to work on improving their website conversion rate, customer retention, and average order value to offset the rising costs of advertising.
  • Learning curve. Running paid ads isn’t rocket science, but the intricacies of the platform might be enough to intimidate those without experience. Luckily, we have free video courses that cover both the basics of ad platforms like Facebook and Google, as well as blog posts that get into the details of optimizing and scaling your campaigns

Good for

  • Businesses with a budget. Most advertising platforms don’t require upfront payments or minimum spends to access their audiences, but that doesn’t mean they’re cheap. Being successful at paid ads requires testing different creative variations, audiences, and overall strategy in order to be profitable, so those who have some money to invest in marketing will benefit long term. 
  • Businesses with creative assets. One of the key factors to success with paid ads is having the right creative that can attract new customers to your business. If your brand has an archive of photos, videos, and copy that can successfully introduce new people to your product and convert them into paying customers, you might want to consider putting some money behind them. 

2. Influencer sponsorships 

If you have a marketing budget, one of the quickest ways to get your product or brand in front of a relevant audience is by paying someone with an online following to promote it for you. Influencer marketing (through Instagrammers, YouTubers, bloggers, etc.) has become a popular form of online advertising, even rivaling referrals from real-life friends.

The success of influencer marketing involves finding the right influencers to promote your product. The challenge is identifying those who have an active, engaged following that would be interested in your product, as well as the creative ability to produce content that reflects well on your brand.

influencer example

Advantages 

  • Brand awareness. With hundreds of thousands or even millions of followers, working with large influencers can bring people into your customer acquisition funnel through brand awareness. With influencer marketing, you are not only paying to acquire new customers but also to have your product exposed to a wider audience so that when they are in the market for your particular product, it’s top of mind. 
  • Niche targeting. A micro-influencer, typically someone with a smaller, more dedicated following, can give businesses with niche products immediate access to a relevant online audience. These micro-influencers typically cost less to work with and have better engagement metrics, which means your sponsored content is more likely to get noticed by their followers and lead to a higher conversion rate of customers. 

Potential pitfalls 

  • Tracking ROI. One of the shortcomings of using influencers as a paid marketing channel is the lack of extensive tracking that most social platforms have for sponsorships. While paid advertising platforms can track those who view or click on your ads, most influencer posts need to be tracked through UTM links, discount codes, and other creative mechanisms. Without intentionally tracking them, you run the risk of not knowing whether a sponsorship produced sales or not.
  • Upfront payments. There are various platforms and experts that can connect your brand or business with influencers who will promote your product. Most of the time, a creator will ask for an upfront payment in the form of money or a product donation. This protects influencers against potential scammers but can be risky for businesses since there is no guarantee the influencer will help you acquire customers. Creating a commission-based payment structure, solidifying your agreement with a contract, or using an escrow service can help mitigate this risk.

Good for 

  • Products that require demonstration. Say you have a new, innovative product that the average consumer isn’t familiar with. A simple photo advertisement might not be enough to drum up prospective customers. By working with an influencer, you can have them test out, demo, or provide validation for your product that can be shared online to help convince prospective customers. 
  • Trendy brands or products. Oftentimes influencers are looked up to for their ability to discover new products or trends, whether it be in fashion, food, or technology. If your business or brand has that “cool” factor, approaching an influencer with the opportunity to advertise your product might be more appealing, as it helps them keep their audience engaged, making it a worthwhile partnership on both sides. 

3. Email

Lead generation is often the first step to customer acquisition. Generating leads involves collecting information from potential customers in order to nurture them or retarget them with ads to eventually convert them into a customer. Most first-time visitors to your site probably won’t buy on the spot, after all.

Collecting email addresses is seen as one of the best lead generation investments for customer acquisition because of the revenue that email marketing produces for businesses. According to Campaign Monitor, 59% of marketers surveyed see the most ROI from email.

There are plenty of ways to build an email list, from driving paid traffic to a page with an email capture form to offering a welcome discount on your website for new subscribers. Once your email list is built, you can run email campaigns and set up automated emails to send targeted messages to your list through email marketing services like Omnisend or Klaviyo. These emails can be personalized and triggered based on behavioral data to help you turn leads into customers.

harry's email customer acquisition
A landing page created by Harry’s to collect emails from prospective customers before launching its business.

Advantages 

  • Recurring revenue. One of the biggest benefits to building an email list is that it gives you the ability to market to customers over a long period of time, extending the lifetime value of each customer acquired. Once the email is collected, you can set up email automation to continue engaging the customer and recommending new products. 
  • Customer data. Aside from nurturing prospective customers, an email list can also help you find new prospects using “lookalike audiences.” Lookalike audiences are a tool provided by advertising platforms like Facebook and Google, where an advertiser can upload a CSV of emails they collected to find users who “look like” the business’ existing leads.

Potential pitfalls 

  • Delivery rates. As spam filters become more sophisticated, getting your emails delivered to someone’s inbox has become increasingly difficult for brands, with an estimated 50% or more of emails considered spam. Personalizing your email communications and following best practices when it comes to email design can help improve the deliverability of your campaigns.
  • Low-quality emails. Although a large email list sounds great, quality always overrides quantity. Although some email acquisition tactics may be working, it is important to analyze the conversion rate from each email source to make sure you are acquiring quality leads. One way to decrease your email marketing costs is by regularly cleaning your list of those who haven’t opened an email from you in a long time, otherwise known as your “unengaged list.”

Good for

  • Businesses with multiple/consumable products. If your product is consumable, and therefore needs to be replenished (like coffee), or if you have a line of complementary products (like clothing), email can become your biggest source of recurring revenue. If your business has a full collection of products that you can continue to introduce to customers, you can maximize your return on investment by keeping in touch with them via email and creating strong repeat purchase habits.
  • New product launches. If you’re still in the product development stage of creating your business, collecting emails can help you prepare for a successful launch. One famous example of building a pre-launch email list is the story of Harry’s, a men’s grooming brand that collected close to 100,000 emails

4. Referral programs 

A personal recommendation from someone you know goes a long way. Research from Nielson has shown that word-of-mouth referrals are one of the most influential forms of marketing. People trust those they know, so when a friend tells them to check out a new product or brand, they listen.

In order to use referrals as a new customer acquisition strategy, it is up to the business owner to make it easier for those loyal customers to recruit their friends.

This can be achieved by setting up a referral program in which your existing customers are rewarded each time they get someone new to purchase from your business. Apps like ReferralCandy, LoyaltyLion, and Smile.io all offer ways to encourage customers to refer friends through marketing emails, discounts, and incentives for both the customer and their new recruit.

referral program example
Vanity Planet’s referral program encourages customers to refer friends to receive points.

The best customer acquisition tool is to create referral programs and make use of the brand loyalty you’ve already built with your existing customer base. People tend to trust the opinions and endorsements of their friends and family over a company’s broader marketing voice.

Advantages

  • Low cost. Since personal referrals are so effective, using a referral program is usually seen as a low-cost form of new customer acquisition. The fees associated with setting up a program include a subscription to a referral program app and the discounts given to the new customers who are recruited. 
  • Repeat purchases. Often when a customer refers a friend, they are rewarded with a small perk, like a discount code off their next purchase. This creates the added benefit of encouraging repeat purchases from existing customers—an extra boost in revenue that can help make your referral program even more profitable. 
  • Customer loyalty. According to a study published by several prominent business school professors, referred customers are 18% less likely to churn than non-referred customers and 25% more likely to spend more over their lifetime with your brand. These numbers show that referral programs bring in customers that are more loyal and profitable for your business. 

Potential pitfalls 

  • Low engagement. While you might be excited to launch your referral program, there is no guarantee your customers will share that same enthusiasm and want to participate. If your customers haven’t received good service from your business or aren’t in love with your products enough to recommend them, a referral program might not be the right customer acquisition channel for you.
  • Organization and tracking. Since referral programs can involve creating customer rewards, tracking who has referred customers, and even loyalty points for each customer, staying organized is an essential part of making the program run smoothly. This is why many businesses use an app to organize their entire referral program. If you’re thinking of keeping track of referrals manually, you may run into issues that could frustrate customers. 

Good for 

  • Businesses with existing customers. It goes without saying that to run a successful referral program, a business needs to have an existing customer base to work with. If you have a low number of existing customers, their referrals may not even cover the cost of setting up a referral program.
  • Businesses with loyal customers. While every business wants to have loyal, engaged customers who would love to share your products with their friends, not all are strategically designed to do this. Having good customer service, quick delivery, and easy returns all help create more loyal customers who are willing to refer their friends. 

5. Traditional advertising 

It turns out that digital marketing hasn’t completely killed old-school advertising, like print media and direct mail, to acquire new customers. Research published by MarketingSherpa shows consumer trust in traditional media trumps most digital channels.

marketingsherpa study

With the ubiquity of display ads, digital marketing efforts have become easier for consumers to ignore or opt out of through ad blockers. Traditional media, from small scale efforts like printed flyers to billboards and even TV ads, can be a good way to diversify your customer acquisition channels to reach a new, targeted audience.

At the same time, technology has made significant improvements to both the costs and accessibility of traditional advertising methods for small businesses. There are now apps like Touchcard that can connect to your online store and use customer data to send out physical postcards to your leads or customers.

traditional ad by Thinx
Subway ad designed for Icon by Thinx with an online discount code as the call to action to track sales from this campaign.

Advantages 

  • Decreasing costs. According to AdAge, the cost to advertise on the biggest TV shows is decreasing. While the prices for a commercial on the top 10 programs are far outside the budget of most businesses, some research suggests TV advertising CPMs are as low as $2.26. If your goal is to reach as many people as possible for the lowest cost, the broad and massive reach of TV ads might make economic sense for your brand.
  • Consumer trust. The trust that consumers have in digital ads has increased over time, especially as more well-known brands begin running online campaigns. However, print and TV ads still top the charts when it comes to advertising channels that consumers trust most, according to a study published by MarketingSherpa

Potential pitfalls 

  • Tracking. The flipside of having such a broad reach with traditional advertising is the lack of precision tracking that exists with digital channels. When running a print or TV campaign, it is likely not possible to always know the precise ROI from a campaign, since those who view or take action after seeing your ads aren’t “cookied” like they are when they visit your website directly. However, some digital-first brands like Icon, above, have demonstrated how integrating a first-purchase discount code into their subway ads can help track customer acquisition from these campaigns. 
  • Upfront investment. The budget commitment and lack of flexibility inherent to traditional advertising are often seen as risky. Digital programmatic advertising allows businesses to pivot and reinvest based on real-time results from their campaigns and learn what works on a smaller scale budget. If you haven’t tested your marketing message in a more flexible environment first, the upfront investment of traditional media could leave you with disappointing results.

Good for

  • Local businesses. With traditional advertising bearing a heavy upfront fee, efficiencies in these channels might be found with local print, TV, and radio ads. If your business can only ship to a specific state or is designed for a local audience, like celebrating a city’s sports team, advertising in local media can reward you with low-cost reach while still being highly targeted. 
  • Businesses with high-priced products. Average order value plays a significant role when it comes to high-priced media. Companies like Endy and Casper are known for investing in out-of-home advertising on public transportation to sell their mattresses, which often cost over $1,000. If your order value is high and your profit margins strong, the risk of spending on big-budget traditional ads can be offset by the need for fewer purchases to be profitable. 

6. Search engine optimization 

When looking for a product or service, many consumers begin their search with Google. Creating website content that helps your brand show up in Google search results for relevant queries is known as SEO, or search engine optimization.

Doing keyword research and implementing your findings into a content strategy for your website pages and blog can help you climb Google’s rankings, bringing search traffic filled with potential customers to your website.

By focusing on your SEO, you’ll be able to improve the ranking of your product or service on search engines, which will make you more visible to your prospective and existing customer base. Use industry-related keywords as well as back links from reputable websites to increase your brand awareness.

Melanie Bedwell, ecommerce manager for OLIPOP
temporary tattoos

Inkbox ranks first for “temporary tattoos,” a term that has over 30,000 monthly searches. You can imagine the passive, intentional traffic this generates for its website every day.

Advantages 

  • Passive, organic traffic. Every second, over 40,000 queries are entered into Google’s search engine, making it the most visited site on the web. If you can optimize your website and content toward this goal, you can capture a small percentage of those searching for products in your niche and successfully acquire them as customers. 
  • Evergreen. SEO is often referred to as a source of “evergreen” traffic, since content created and posted months or even years ago can continue to rank on the first page of Google and drive traffic to your site. A good piece of evergreen content can bring your website new traffic without the need to continuously pay for every new visitor. 

    Potential pitfalls 

    • Slow growth. If you want to show up first on Google’s search results, you can pay with Google Ads to be the first sponsored link visitors see. However, if you are aiming to show up organically on the first page, it can often take time and patience for Google to recognize your website as an authoritative source.
    • Competition. Even though the term “temporary tattoos” has over 30,000 monthly searches, Google displays over 237 million results for it. Certain niches are highly competitive when it comes to search rankings, which can make ranking on the first page more difficult. Tools like Ubersuggest and Ahrefs can help you understand the level of competition for different search queries and keywords and provide ideas for less competitive alternatives. 

    Good for

    • Those willing to play the long game. SEO done right is a measurable and reliable source of organic traffic, but being successful requires a consistent effort and constant learning. The Google algorithm is prone to change, and staying on top of the latest strategies on both the technical and creative side of SEO is essential to making this channel work.
    • Content creators. While SEO may seem quite technical, it is widely known that the quality of a website’s content to satisfy searchers plays a critical role in its ability to rank in Google search results. The ability to write well and come up with creative content ideas that align with your keyword research can help rank your content above the competition.

    7. Audience building

    With social media and its many platforms like Facebook, Instagram, YouTube, and Twitch, individuals have been able to attract huge online followings of potential customers. Companies like Sand Cloud and Gymshark have cultivated Instagram followings in the hundreds of thousands and even millions, becoming influencers themselves.

    gymshark example
    Gymshark has over three million followers on Instagram and built a community of brand ambassadors who promote it on the platform.

    There are several ways to build an online audience on social media. Almost all of them require time, consistency, and content to attract new followers and keep them engaged. Your online following not only lends your brand authority, it also creates an audience of customers you can reach whenever you want to promote a new product or increase sales. 

    Advantages 

    • Organic traffic. Although there might be costs associated with creating an engaging social media account, it is often seen as a source of organic traffic since it can help share your content for free. Viral videos can show up on the highly trafficked trending or discover page of different platforms, and your followers can share your content or tag your brand, bringing you more organic followers and potential customers.
    • Social proof. Social media has no shortage of visible numbers. Whether it’s the number of likes or comments a photo gets or your total subscribers, all of these metrics lend authority to your brand in the form of social proof. When potential customers decide to check your brand out online (which they often do), the size of your online audience and its engagement adds to its legitimacy.

    Potential pitfalls 

    • Slow growth. If creating an online audience was easy, everyone would be an influencer. Building an organic following and turning it into a customer acquisition channel takes time, especially in contrast to paid advertising. 
    • Algorithm changes. One of the biggest threats to content creators on any platform is a sudden change in the algorithm that once helped them gain traction. In 2016, some of YouTube’s biggest channels claimed that their views dropped as much as 30% due to suspected algorithm changes. If you decide to build an online audience, your ability to reach that audience and convert them into customers will always be controlled in some part by the platform itself.

    Good for

    • Content creators. If you’re the creative type who is skilled in the area of writing, photography, video, or just generally entertaining people online, building an online audience as a form of customer acquisition might be a good use of your skills. 
    • Businesses on a budget. If you’re strapped for cash, creating an online audience organically can be a cost-effective way to attract new customers. Unlike paid ads, there isn’t a fixed cost associated with exposing your brand to new people. Rather than dollars alone, online audiences can be built on your own creativity. 

    8. Content marketing 

    A thoughtful and interesting blogging strategy can build trust with potential customers, nurture customer relationships, and promote your products and services. Brands like Press, which sells plant-based goods like juice cleanses and kombucha, shares tips for healthy living and educational content through its blog, The Squeeze

    Squeeze

    The blog has a simple, yet eye-catching design, with hero images that reflect its products. Posts are full of useful, well-researched information and expert interviews that help readers make healthier life choices. Squeeze also offers resources like a direct line to its in-house nutritionist at the bottom of articles. 

    Advantages

    • Builds trust with customers. Sharing reputable and useful information helps readers solve their problems. This builds trust between them and your business. If someone trusts you, they are more likely to accept your recommendations. 
    • Generates leads. Traffic aside, content marketing helps generate leads for your business. When someone visits a page from your social media account or Google and likes your content, they may click on your call to action and convert. Many ecommerce platforms make it easy to create a blog for your online store.

    Potential pitfalls

    • It takes upfront investment. Running a blog is not cheap. You need a team of strategists, writers, editors, and project managers to make it happen. It may also take time for your content to show up in search results. Regardless, you can always share it on social media for free. 
    • It needs to be done right. Adding a blog is a good investment if you publish high-quality material. Poorly formatted, researched, and written content can deter visitors from your website. 

        Good for

        • Those willing to invest in quality content. Blogs can provide many benefits for your business, but only if it’s done with care and effort. Simply publishing a few posts each month won’t get the traffic or conversions you hope for. 

          Customer acquisition examples

          Spongellé 

          Spongellé is a Los Angeles–based company that sells personal care products. The brand is known for its high-quality botanicals, sea minerals, and antioxidant ingredients, as well as four-in-one sponges that wash, exfoliate, massage, and moisturize your skin. 

          Spongellé was looking for new ways to connect with potential customers. It sent regular emails but wanted to explore new tools to engage customers both online and in-store, plus learn more about who its customers were. 

          The retailer implemented a Shop Quiz by Octane AI to learn more about its customers. The quiz, which lived in the brand’s top navigation menu, started by asking customers whether they were returning or new. New customers would be prompted to take a quiz about the kinds of sounds and smells they like, as well as other relevant questions. 

          shop quiz example

          Once a potential customer completed the quiz, they were offered a 15% discount and a product recommendation based on their answers. 

          A product quiz can have a 20%+ purchase conversion rate—much higher than the typical 2% ecommerce store conversion rate—making a quiz an ideal landing page for your paid traffic. Plus, you will collect more email opt-ins and zero-party data with a quiz, which can lead to 30%+ revenue increases from your email channel.

          Ben Parr, co-founder of Octane AI

          Spongellé then built Facebook Messenger and SMS flows to have one-to-one conversations with every person. The campaign proved to be successful, resulting in:

          • $250,000 in additional revenue generated in 30 days
          • A 58% Shop Quiz completion rate
          • 120,000 responses collected in the first six months

          Check out the full story by reading How Spongellé Drove $250,000 in 30 Days With A Shop Quiz, Messenger & SMS.

          Wood Wood Toys

          wood wood toys

          Wood Wood Toys is a Canadian-based toy store that sells handpicked Montessori-inspired toys. Customers from around the world buy the wooden toys from the brand founded by a mom and a dad, Melody and Rennie Wood, who were looking for toys for their own child. The business operates online only, which is challenging because some customers want to view the toys in real life. 

          Once the pandemic hit, Wood Wood Toys took off. The brand received more traffic than ever before, and sales rocketed. Rennie and Melody still had full-time jobs on top of managing their online business. At the same time, their customer base began to dwindle as those customers’ children began to age out of the brand’s products. That’s when Wood Wood had to focus on customer acquisition once again. 

          Rennie knew that customer experience was one area Wood Wood Toys could excel in over competitors like Amazon resellers. The brand implemented Shopify Inbox to manage customer conversations, which helped it:

          • Win a sale eight out of 10 times when it had the opportunity to chat with a shopper
          • Provide fast, personal customer experience
          • Acquire new customers as existing customers aged out

          Shopify Inbox is a powerful tool. … It helps me rescue sales after spending time, money, and energy getting a customer to that point. It pays huge dividends.

          Rennie Wood, Co-Founder of Wood Wood Toys

          Two-way conversations are key to improving customer acquisition in the store. It helps mimic in-store experiences and can save sales by answering questions customers have at checkout. Wood Wood Toys continues to use Shopify Inbox to grow its business and improve customer acquisition in a sustainable way. 

          Read the full story:How Wood Wood Toys Uses Shopify Inbox to Differentiate and Win Sales

          BOOM! by Cindy Joseph

          BOOM! by Cindy Joseph is a leading pro-age organic skin care and cosmetics brand. A family-owned and -operated business, BOOM! by Cindy Joseph teamed up with Ezra Firestone to drive ecommerce growth and acquire new customers, turning it into a multimillion-dollar brand since its founding in 2010.

          Boom! Customer Acquisition example

          In a Shopify Masters episode, Ezra discusses his direct-response sales funnel for BOOM! that got people in the door and encouraged them to buy. His favorite strategy, known as the “pre-sell engagement article,” is a piece of content that brings up a common experience the audience is having. It’s an interesting and compelling piece that transitions into a pitch for BOOM! products. 

          Ezra mentions one article, “Five makeup tips for women over 50,” that he spent $20 million advertising. The article provides tips for creating a fun and exciting makeup routine for those over 50. After someone views the article, they can go straight to the BOOM! site to buy. If they don’t purchase, Ezra retargets them with a testimonial sales video that sends them to a specific product page

          Learn more about Ezra’s customer acquisition strategy by reading The Power of Content: How 1 Article Generated $22 Million in Sales

          Hiya Health

          Hiya Health is a children’s health company that sells vitamins without sugar, additives, or other gummy junk. Partnered with pediatricians, scientists, and nutrition experts, Hiya delivers a nutrient-dense chewable that tastes good and includes all essential vitamins and minerals a kid needs. As you may guess, parents want proof that these are legit vitamins to give their children—especially when buying them online. 

          Darren Litt, co-founder of Hiya Health, found that one of the best ways to overcome this is by using social proof. “One of our best testimonials comes from Kelly LeVeque, a nutrition expert, influencer, and mom,” Darren says. They work with Kelly to endorse the product, showing potential buyers that a certified nutritionist and mother would give these vitamins to her own children. “We believe that social proof and testimonials have helped sales at the medium and bottom funnel stages of our customer journey.” 

          Hiya also focuses on Instagram as its main acquisition channel. “The visually driven content works perfectly for influencer marketing, which is a core component of our social media marketing. We play up the features of our product design by posting flattering pictures on Instagram and encouraging our customers to post their own pictures too,” Darren says. 

          The brand posts a variety of engaging content, from kids posing with Hiya products to tips for a healthy lifestyle, educational content, and photos of food that inspire healthy eating. 

          Free Reading List: Conversion Optimization for Beginners

          Turn more website visitors into customers by getting a crash course in conversion optimization. Access our free, curated list of high-impact articles below.

          Customer acquisition tools

          Referral Candy 

          referral candy

          Referral Candy is a tool for building referral programs for your store. Over 3,000 Shopify merchants use it to reach new customers, grow their brand through word of mouth, and create fun and engaging customer loyalty programs. It works across any industry: fashion, athleisure, nutrition, electronics, and more. 

          Referral Candy offers tools to automate your referral programs and acquire new customers, like post-purchase pop-ups and VIP rewards. It also connects with your favorite marketing tools like Klaviyo, Facebook, Google Ads, and more. Start with a 30-day free trial, then pay only $49 per month for the service. 

          Shopify Inbox

          shopify inbox

          Shopify Inbox is a free Shopify app that helps you turn browsers into buyers through the power of chat. Right from your Shopify admin you can customize your online store chat, create automated messages, and get insights to understand how your chat is performing. 

          inbox results

          Consumers are gravitating toward making online purchases. Since the pandemic began, 34% of consumers say they complete more transactions online than ever before. The same study showed that 68% of respondents are more likely to buy from a business that offers convenient communications, like chat. That’s where Shopify Inbox comes into play. 

          With Shopify Inbox, you can:

          • Save time managing customer conversations from online store chat and social media, all within one app
          • Send products and discounts from your Shopify store directly inside chats with just a few taps, turning conversations into checkouts
          • Know when customers add or remove items from their shopping cart
          • Assign chats to your staff and team to scale customer conversations

          It also connects with popular messaging platforms like Messenger and Apple Business Chat, so you can help more people, in less time, on their preferred channel. 

          Shopify Email

          shopify email

          Shopify Email is the email marketing app made for ecommerce stores. You can easily design emails in minutes with a drag-and-drop editor, creating beautiful, branded emails you can send to your list. No coding experience required. 

          The best part? You can manage all campaigns in your Shopify admin. Shopify email also lets you:

          • Choose from a growing collection of templates like product collections, sales, restock, newsletters, holidays, events, and more 
          • Personalize your content with customers’ information for a more engaging experience
          • Schedule emails to send at a specific time
          • Segment emails to send the right message to the right person
          • Track metrics such as open and click-through rates, products added to carts, and purchases

          You also get 2,500 emails for free each month, then pay $1 for every 1,000 emails you send after that. 

          Privy

          privy

          Privy is a popular Shopify app, with over 24,500 reviews. This plug-in is trusted by businesses large and small to improve conversions, grow subscriber lists, and make more sales. Privy offers tools for conversion, email marketing, and website widgets like:

          • Pop-ups
          • Spin-to-win wheels
          • Cart savers
          • Free shipping and sign-up bars
          • Banners
          • Flyouts
          • Embedded forms

          Privy offers a free 15-day trial. Paid plans start at $29/month.

          BOOSTER SEO & IMAGE OPTIMIZER

          booster seo app

          SEO isn’t easy to manage for many small businesses. Fortunately, BOOSTER SEO & IMAGE OPTIMIZER is here to make it easier. The only SEO app built exclusively for Shopify stores, this app ensures your store is optimized for search engines 24/7. Use it to optimize image alt tags, create effective meta tags, create enriched listings, and fix SEO issues on autopilot. 

          BOOSTER SEO & IMAGE OPTIMIZER is free. Paid plans start at $34/month. 

          How will you grow?

          While customer loyalty and repeat purchases are an important element to the overall health of your business, attracting new customers through customer acquisition can help you grow beyond your current base.

          Customer acquisition is about demystifying how customers discover your brand and why they buy from you, so you can optimize and scale that process. This will allow you to spend your marketing dollars more strategically and grow your business steadily over time.

          Knowing which channels will work as a customer acquisition tool for your business involves continuously testing new channels and approaches, letting you find out what works best for your unique business and preventing you from being too reliant on a single source.

          Photo illustration by Gabrielle Merite 


          Customer acquisition FAQ

          What is a customer acquisition strategy?

          A customer acquisition strategy is the plan to find, attract, engage, and convert prospects. Consumers use a variety of channels every day, so your customer acquisition process will involve different channels to engage them.

          What is the purpose of customer acquisition?

          Every business needs a customer acquisition process. The goal is to create a systematic way to acquire your ideal customers and adapt to changes and consumer trends. It also shows you how much it costs to get new customers and how to look for opportunities to maximize your marketing budget. 

          How does customer acquisition different from customer retention? 

          Customer acquisition is the process of finding and converting new customers. Customer retention is what happens after you acquire a customer. A high retention rate means customers stay around for a long period of time and continually buy from you.

          What are the customer acquisition tools?

            • Referral Candy
            • Shopify Inbox
            • Shopify Email
            • Privy
            • BOOSTER SEO & IMAGE OPTIMIZER
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