Customer acquisition refers to all of the strategies and techniques used to acquire new customers, which is vital to building a solid customer base. According to this Forbes survey, 1,000 small business owners and decision-makers said that customer acquisition is one of the biggest challenges small businesses face in the next year and their biggest marketing goal.
However, many SaaS businesses don’t have a defined customer acquisition strategy, and that’s a mistake. Defining a proper strategy and goals to acquire new users is essential for business growth.
Today, we’ll explain the best customer acquisition strategies for SaaS companies, including a rundown on:
- What is Customer Acquisition?
- Shifting the focus: Customer Acquisition vs. Customer Retention
- Customer Acquisition Strategies for SaaS
What is Customer Acquisition?
Customer acquisition = Obtaining new customers. As a strategy, this means the actions taken by a company in order to gain new customers, across multiple channels. For example, this can be in the form of a PPC lead generation campaign, or even attending a networking event. A successful plan can build a solid customer base, and improve business profitability.
Customer acquisition begins with defining your ICP (Ideal Customer Profile) and initiating contact with potential customers and ends with implementing strategies to support and retain them. Additionally, it covers all aspects of the customer journey from top to bottom of the funnel, including lead generation, activation, customer loyalty, and conversion rate optimization.
The main benefits of developing a proper customer acquisition strategy are:
- Obtaining more customers means more income, profit, and growth for your company
- It improves your company’s brand awareness
- A proper strategy attracts potential investors and partners to your company
- It increases retention and reduces customer churn
But do you know how to build a customer acquisition strategy? What are the steps to make it successful? Let’s take a look!
Customer Acquisition Strategies
We know developing a well-designed strategy can be challenging, so we have created a step-by-step guide for you to create a successful strategy.
1. Define your target customer/audience
First, to create an accurate and effective strategy, you need to define your target audience. The first step is to identify your potential customers, their characteristics and interests, their ages, the companies they follow, etc. To achieve this, you will need to conduct extensive market research. Start by asking yourself this question: Who’s a good fit for my SaaS?
2. Define your goals
Once you’ve defined your target audience, you can set up your business goals. Setting business goals will help you guide your entire acquisition strategy. Ensure that your customer acquisition strategy accounts for key metrics such as current customer churn, customer retention, and customer growth rates.
3. Choose the best acquisition channel
There are two ways to make customer acquisition; deep or broad. Going deep, you can make a lasting impact on a smaller number of people and become well-known on a specific channel. By going broad, you spread the word about your business across many different channels. When choosing the channel, you can also choose between offline and online.
If you’re a SaaS company that provides software services to help solve problems, your clients are more likely to be online.
Those are the most used acquisition channels for SaaS companies:
- Social Media
4. Engage your customers in communication
To develop an effective acquisition strategy, you should know the gaps in your business strategies, and the most accurate way to do so is by asking your customers. A variety of methods can be used to reach out to your customers, including customer surveys, email contact forms, customer interviews, social media posts, and blog posts. You can ask for feedback, be available to talk with them, and understand how they use your product and features. For example, use different customer support methods to connect with your users effectively and quickly to ultimately increase customer acquisition and retention.
5. Ensure that your strategy is working
The last step of creating an acquisition strategy should be making sure your measure its performance, and that your company is achieving its goals. This can be done by tracking and analyzing different metrics like:
- Customer lifetime value (CLV)
- Monthly recurring revenue (MRR)
- Customer acquisition costs (CAC)
- Churn rate
Shifting the focus: Customer Acquisition vs. Customer Retention
There’re always doubts when it comes to answering the following question: Should I focus more on customer acquisition or customer retention?
Efforts toward customer retention are often put on hold or even suspended. But it’s actually much more cost-effective and more efficient to retain customers for certain business models. According to Think Impact statistics, retaining existing customers has been shown to increase profitability by 25% to an astounding 95%.
When a company focuses its efforts on making its users happy, customer acquisition grows organically. For example, word-of-mouth marketing is one of the most effective forms of advertising. A Business2community study found that 92% of global consumers trust the referral of a friend, family member, or acquaintance over any form of advertising.
Focusing on giving the best product or service and making your customers happy is the ultimate form of customer satisfaction. And when that happens, they’re also more likely to refer your company to others. That’s when you can say hello to a load more customers.
Customer Acquisition Strategies for SaaS
Customer acquisition is the way to gain growth for your company. We’ve shown that your customer support team and customers are the keys to growth. Some of the best strategies to create a successful customer retention/acquisition experience are: Defining your target audience and goals, choosing the best acquisition and retention channel, engaging your customers in the communication, and ensuring by different metrics that your strategy is working. They are unlikely to churn and will recommend your company to others.
Customer acquisition, however, should be well planned and developed strategically, together with customer retention strategies. By doing so, your customer acquisition cost will be lower, and your customer lifetime value will increase. What are you waiting for?
If you’re looking for more information on customer acquisition, check our blog post on What is customer acquisition cost and why does it matter? or for some retention strategy ideas read ‘How to create in-app retargeting.‘