Customer acquisition is the lifeblood of any new startup or small business, and it also represents one of the biggest challenges an entrepreneur is likely to face on the road to profitability.
Customer acquisition is the lifeblood of any new startup or small business, and it also represents one of the biggest challenges an entrepreneur is likely to face on the road to profitability. An effective, multi-pronged customer acquisition strategy allows a startup to quickly and efficiently find their audience, market to them, and encourage them to generate even more sales by providing customer value and a quality product. Let’s look at how you can lay the foundations for a successful approach:
No matter how innovative your product or service is, it’s unlikely that it will have universal appeal, which means the first step in any customer acquisition strategy worth its salt is to identify your target audience and determine where they spend their time. Every social media platform has its own unique demographics, and because smaller startups can’t afford to allocate the time, effort, and resources involved in maintaining an active presence on every platform, it’s crucial to find out how you can get the most bang for your buck and cut customer acquisition costs by focusing efforts on advertising that your potential customers are likely to engage with.
There are a number of effective lean marketing strategies for pinning down your target audience, ranging from A/B tests and smoke testing to simply analyzing the competition to see how they prioritize their resources. Once you’ve figured out who your customers are and where they can be found, leading them through the sales funnel becomes a much simpler and less costly process.
One of the most effective ways to draw new customers is to establish your business as an expert or authority within its niche, but that’s much easier said than done for a fledgling startup without a strong reputation to lean on. That’s why it is absolutely crucial to produce targeted, high-quality content that can be released on a consistent schedule. Content that creates customer value—whether it’s informative, entertaining, or both—is a great way to build a reputation as a trustworthy and authoritative voice in your chosen field, and that perception makes it much more likely that potential customers will come to you for both information and to purchase products or services.
There are a number of ways to make your content more visible, ranging from social media platforms and blogs to video tutorials or even e-mail newsletters, and it’s generally a good idea to post content across multiple platforms for maximum exposure. It’s also important to keep basic SEO strategies in mind when designing content—new startups that put in the effort to target local keywords, develop strong long-tail keywords, and establish a broad web of backlinks can give themselves an edge in customer acquisition and interaction.
Guest posting is an excellent way to help your startup stand out from the crowd while simultaneously boosting SEO rankings, improving brand reputation, and increasing exposure of your product or service to a new audience of potential customers who are more likely to be interested in what you have to offer. Once you’ve got a functional site and enough content to hold a visitor’s interest, consider reaching out to other blogs or even podcasts to pitch a guest article or interview. Depending on your product, you may even be able to contact other industry experts to propose a collaborative webinar or video course. And while it involves much more work, it’s also worth noting that you can approach guest posting from the opposite angle as well—creating your own blog or podcast and inviting others to contribute can also serve as an enormously effective customer acquisition tool.
For a great example of how this can be leveraged, let’s look at the route that the social media scheduling app Buffer took. The company’s founders initially made pitches to major tech blogs and magazines, but no one seemed interested in writing about their app. When smaller publications rejected their offer as well, they decided to create their own blog, and committed themselves to producing high-quality content published on a regular schedule.
After building up an audience on their own blog, Buffer’s founders reached out to other blogs again, and quickly started establishing relationships through guest posts. Word of mouth quickly spread about their innovative product, and within 10 months, they found themselves with over 100,000 new users. Not every attempt at guest posting will result in this kind of success, but it illustrates just how valuable a network of mutually beneficial relationships can be when it comes to building an audience and enticing new customers.
Word-of-mouth advertising is arguably the most important and effective form of marketing for smaller startups and independent businesses, and designing a referral program that gives customers an incentive to spread the word is often the key to supercharging a traditional customer acquisition strategy. According to data compiled by the e-commerce consulting firm Invesp, 82% of small businesses generate the majority of new customer leads through referrals, and those new customers have a 37% higher retention rate and a three-times-higher conversion rate than new customers brought in through other marketing channels. The good news is that when it comes to implementing a referral strategy, simple is best.
To see this in action, look no further than Rothy’s, a shoe company that offers products made from washable, recycled plastics. When a customer buys a pair of shoes, Rothy’s sends them a unique one-time link that gives them $20 off of their next pair of shoes while also allowing them to give one friend a $20 coupon as well. With one simple discount, the company is able to encourage word-of-mouth advertising and directly incentivize two new purchases.
Having a referral strategy in place before your product launches is a great way to channel early momentum into more sales and bigger buzz, and because the entire process can be largely automated, it provides a more hands-off and less resource-intensive option for startups that don’t have the money or manpower to spare on other marketing methods.
Customer acquisition is one of the biggest hurdles a young startup will face since very few people will be aware of your product or brand and you won’t have an established reputation to easily gain consumer trust. But by applying the guidelines above, it is possible to quickly, efficiently, and inexpensively build customer goodwill and establish your company as an authoritative and informative voice, allowing you to stretch your marketing budget further and reach the largest audience possible.
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Nectar is part branding powerhouse, part consultancy, and part digital marketing agency based in Manhattan.