How to get ahead when customer acquisition costs just keep climbing
First, let’s get the bad news out of the way: The cost of acquiring a new customer has gone up by 50% in the last five years.
Yep. You read that right. If customer acquisition cost you $20 per lead in 2014, it probably costs you $30 today. If you were paying $100 per lead, you’re likely up to $150.
Attention spans have dropped. Customer trust in businesses is still speeding downhill. And the top acquisition channels of days gone by are changing their business models in ways that force marketers to spend more and rethink their strategies.
In fact, these days, only 10% (or less) of your Facebook followers see your page’s posts organically. (If you want to reach more, you’ll have to pay to play.) Featured snippets on Google mean less click-throughs to your site. And that’s not even factoring in the cost of platforms like Facebook straight-up lying to advertisers.
If you’re like us, even reading about that shit makes you feel bone-deep tired.
So, what’s a marketer to do? Customer acquisition goals aren’t going away. The old platforms aren’t going to rewind the clock for us. And blind customer trust in business is a thing of the past.
Well, here’s the good news: acquisition costs may be up, but so is US consumer spending.
And then we can’t trust Facebook (really, who among us thought we could?). Now we have to rethink how we use our old channels. That’s the world that digital innovation gave us—a world that keeps on changing.
But I think we’re up for it.
Part of the answer is putting less damn pressure on acquisition and embracing the flywheel approach to marketing—where cross-sell, upsell, customer satisfaction, and customer retention get just as much attention as acquisition.
And the other part of the answer? It’s about embracing new ways of attracting, intriguing, and moving new customers toward the sale. New (and up-and-coming) ways, like…
The dreaded influencer
If there’s one truth universally acknowledged on the internet, it’s this: we like making fun of influencers.
But here’s another truth: we also buy what they’re selling.
As Venture Beat aptly put it, influencer marketing is “word-of-mouth recommendations on the world stage.” In fact, one study found that marketers make an average of $6.50 for every $1 spent on influencers. Top-performing influencer marketing campaigns generate $19 for every $1 spent. And influencer marketing is one of the most cost-effective ways to attract new customers online (tied for the #1 spot with email marketing).
Now, this doesn’t mean you can just throw some money at influencers and watch the sales flow in. There are people who buy followers and game the system. Not every influencer is a good fit for every brand. And some platforms perform better than others (the study above found that bloggers had much better ROI than Instagram). But if you’re strategic about finding the right influencers and running the right campaigns in the right places, influencer marketing can be a big win for your acquisition goals.
Speaking of trust, user-generated videos (made by and featuring your customers) get 10 times more views on YouTube than content created directly by brands. Even more compelling, a 2017 study found that user-generated content influences the decisions of a whopping 90% of shoppers.
Speaking of tactics with compelling ROI…84% of consumers are more likely to stick with brands that run good loyalty programs.
You might think loyalty programs fall squarely into the category of customer retention, but the truth is that they help on the acquisition front too, especially with customers who care about long-term value and are looking for a brand they can have a long-term relationship with (arguably, the best type of customer).
People trust reviews 12 times more than they trust marketing content. Which means that if you aren’t already paying attention to your reviews, you should be.
Digital ads that don’t suck
Okay, so digital ads have been around for awhile. But here’s the recent twist: customer data, data science, AI, and machine learning have now made it possible to personalize them.
You can target customers who love shoes for shoe campaigns. You can suppress ads to customers who already bought the thing you’re advertising. You can let customers tell you, please oh please, stop advertising horror movies to me and show me more romance! (Or vice versa.)
90% of companies working on creating personalized experiences for their users say they saw a measurable lift in ROI. And while there are challenges to using customer data (including regulations and ethical best practices), it’s also an opportunity to better serve customers—both new and existing.
If you need help navigating these new opportunities, we’d love to chat. Reach out to our team anytime.