Customer acquisition is the process of bringing new clients or customers to your business. It encompasses the entire buyer’s journey, from the time they become a lead until they become a paying customer. So, depending on your product or service, the acquisition process may take a long or short period of time from beginning to end. Regardless of length, the steps of attracting, converting, closing and retaining customers should all be covered by your strategy.
How to measure customer acquisition
It’s important to measure and track your customer acquisition efforts to determine effectiveness as well as costs. The best metrics to use to assess how to improve your customer acquisition efforts will vary by industry. However, there are a few that are commonly used by businesses to help adjust strategies to increase results. These are a great starting point:
- Conversation Rate : is a common growth metric. It measures the percentage of people who completed a process after starting it. To leverage this measurement, be sure to clearly define what you consider the “start” and “completion” of a given process. For example, when measuring the conversion rate for e-newsletter registration, what two events will be your “start” and “completion”? Are you quantifying the percent of website visitors who completed a registration form or the portion of those who arrived at the registration page who completed it? Obviously, these would yield two different rates.
- Customer Acquisition cost ( CAC) : is a very common metric used to assess the effectiveness of your customer acquisition efforts. It can be used to calculate the marketing cost per customer acquired for a period of time as well as for a specific marketing method being used. This can be used to determine the success of your overall acquisition efforts. Plus it can help determine which strategies are producing the best results. A common method to calculate customer acquisition cost involves dividing marketing costs by number of customers acquired.
- Rate of new customer Acquisition : allows you to compare customer acquisition rates for various timeframes so you can determine if your results are improving over previous periods. It is calculated by dividing number of customers acquired over a period of time by the length of the same period.
- Rate of visit to specific product pages : is a way to measure interactions with prospective customers early in the purchase process. It allows you to determine the effectiveness of these product or landing pages and identify potential areas for improvement.