Marketing Strategy
Customer Acquisition Strategies
Written by James Garvin for Gaebler Ventures
It used to be that you set up a website and could get millions of hits to your site. Those days are long gone with the flood of millions of websites, however online businesses continue to thrive, but the strategies and costs for acquiring customers has changed drastically.
It has been reported that Amazon used to spend nearly $75 to acquire a single customer.
When you are backed with millions in venture capital, you may be able to afford the high costs of acquiring customers for a short period of time, but for non VC-backed firms, spending that much cash to acquire customers usually is not feasible.
If you are a consumer facing internet business, you have the challenge of not being able to directly call a consumer to sell them a product, as you do when you are selling to businesses. Consumer customer acquisition is the most expensive due to the inability to directly speak with them as well as the number of marketing messages that consumers are inundated with daily. The trick is, how do you get noticed and how do you target the right customer segment so that you achieve a positive ROI on your customer acquisition strategies?
Google Adwords can get you started, but with cost per clicks of $0.50 to $4, you need to ensure that you have a high "click to customer" conversion ratio. This usually can only be achieved when you have done extensive testing and experimentation and have a website that solicits customer purchases when they are on the site. While Adwords can and should be a part of your campaign, don't expect floods of consumers coming to your site with this strategy alone.
A creative direct marketing campaign can be a great way to build some buzz around your company. Online discount ski ticket provider Liftopia ran a huge Super Bowl promotion offering avid skiers huge discounts on one of the quietist days for ski resorts. Ski resorts were happy to partner with Liftopia to offer heavily discounted tickets on that day to increase their revenue on what would otherwise be an unprofitable day for the resort.
As a result, Liftopia was able to generate significant buzz about their Super Bowl promotions for skiing. The reason this works, is because we don't usually think Super Bowl and skiing and its uniqueness attracted media outlets covering the promotion. The marketing promotion also most likely attracted serious skiers, a customer segment that is most likely to be repeat customers of Liftopia.
This is just one example of numerous types of promotions that can be done at very little cost, but attract good media attention for your company. Sometimes it takes something special and out of the ordinary to garner the attention of the right customer segment, but being able to find that right customer segment with the right marketing message and promotion is what ultimately brings early adopters to your business and likewise helps build word of mouth marketing.
Either way you slice the pie, there are numerous affordable ways of attracting consumers to your online website. However, once you get them there, be certain that your website and value proposition are worth their time because you may never get them back.
James Garvin began his education studying biotechnology. In recent years he has turned his interest in technology to helping two internet startup companies. The first business was an online personal financial network and the second was an e-marketing platform created to help entrepreneurs demo their web sites. Currently a student at University of California Davis, James is spending his summer incubating two new online businesses and writing about his entrepreneur experiences.
Share this article
Additional Resources for Entrepreneurs
Conversation Board
We greatly appreciate any advice you can provide on this topic. Please contribute your insights on this topic so others can benefit.