Is a large portion of your marketing focused on your digital presence? With most businesses, the answer is a resounding yes! Since online businesses are always striving to grow their presence, wouldn't it make sense to develop a digital strategy that fuels sales by converting visitors into loyal customers?

To help you understand and improve your digital presence, there are four points you need to consider: Digital Marketing Strategy, SMART Growth Goals, Customer Acquisition, Master Strategy Model. We covered the first two last time so we’ll go over Customer Acquisition and Master Strategy Model today.

Customer Acquisition

New customers are one of the driving forces of any business. New customers keep a business growing and thriving. The tricky part is understanding and targeting your marketing effectively in each step of the buyer process and then creating a sustainable customer acquisition strategy that is flexible enough to evolve with the times.

Buyer's Journey

To understand the customer journey, it's necessary to identify the stages of a customer's buying process. Customers follow a four-step process, and acquiring customers within the buyer's journey requires specific strategies for each of the four steps;

1. Awareness. In this stage, the customer is made aware of your product or service.
2. Interest. In the second step, potential customers may be spending more time on your website, and they may have downloaded a free product or two.  
3. Decision. At this step, the customer has decided to buy your product.
4. Action. In the final step, the customer takes action and buys your product or service.

There are multiple methods of acquiring new customers, including targeted content marketing, SEO, blogging, videos, free content offers such as eBooks, whitepapers, reports, social media, and email marketing. Choosing the best channels to acquire new customers depends on many factors, including your audience, resources, and game plan. Whichever channel you choose, for it to be effective, it must be relevant to your audience and include a call-to-action.

During the process, your sales team will identify whether the prospect falls into either the marketing qualified lead (MQL) or the sales qualified lead (SQL). Typically, MQL's have a good chance of turning into paying customers; however, they need more nurturing to move them up the next step in the buying process, whereas SQL's are considered ready to buy and need a final push to move into action.

A first-time visitor who downloaded one form is an MQL. A visitor who has frequented your site numerous times and downloaded a few pieces of content may be an SQL. A visitor who has requested a phone call or meeting is an SQL.

Customer Acquisition Cost (CAC)

As you well know, there's a cost to acquiring new customers. Expenses or costs of marketing can include many expenses such as money spent for advertising, employee salaries, content creation, the technology used by your marketing and sales teams, production costs for creating physical products such as a camera for videos, and maintaining inventory such as software updates.

There is a neat little formula for calculating the customer acquisition cost called CAC (the acronym). The lower the CAC, the higher the profit, the higher the CAC, the lower the profit. To calculate your CAC, choose the month, quarter, or year, add your total marketing and sales expenses and divide the total sum by the number of new customer acquisitions during that time frame. That number is your cost of acquiring a new customer. Determining the CAC reveals marketing, campaign, and sales insights.

CAC = (cost of sales + cost of marketing)

New Customers Acquired

For example, if your customer service team has managed to keep your customers happy, and they spread the word through reviews and testimonials and referring family and friends, the CAC is low, and your profits are high because your loyal customers are bringing in new customers free of charge to you.

If your social media ads are costing you huge dollars but only bring in a trickle of leads, your CAC is high and the profit low. In this case, you will need to reassess to lower its CAC or eliminate it from your marketing strategy.

Customer Lifetime Value (CLV) [sometimes called Lifetime Customer Value]

Another valuable metric to factor into customer acquisition is a customer lifetime value or CLV. CLV predicts the revenue a customer will produce over the lifetime of their relationship with your business. There are four components of CLV; each has a formula, which includes:

• average purchase value; total revenue/# of purchases (within the same time period)
• average purchase frequency; # of purchases/# of customers (within the same time period)
• customer value; average purchase value x average purchase frequency
• average customer lifespan; average # of years customer buys from your business
• CLV; customer value x average customer lifespan = amount average customer generates during the course of their relationship with your business

CAC to CLV Ratio

Now that you have your CLV and CAC, it's time to calculate the ratio to reveal customer worth compared to your expenses in acquiring customers CAC:CLV. It would help if you were aiming for a customer value ratio three times higher than your cost of acquiring them or 3:1. Of course, the higher the item, the longer it will take and the higher the CAC cost. A customer buying a $1,000,000 crane will take considerably more time and effort to acquire than a customer buying cosmetic brushes for $60.

Master Strategy Model

Strategies to improve customer acquisition

To bring your CAC:CLV ratio down, and increase your profits, here are a few effective strategies.

• Conversion rate optimization (CRO). Automated submissions and shopping accessible 24/7
• Targeted value. Give customers content, products, services that are valuable to them
• Customer referral program. Free customers – through automated referral systems
• Automated tools/processes to streamline your sales process
• Add more value for your existing customers, and provide appreciation gifts
• Break your business growth into six areas of growth and score each of them from 1 (lowest) to 5 (highest) Acquisition

1. Awareness
2. Acquisition
3. Active Sales
4. Revenue
5. Retention
6. Referrals

• Review the six areas of growth quarterly so that you and your team can identify what or who is performing and what isn't, from there; you can adjust to achieve your goals
• Prioritize three areas at a time focusing on the right activities that move you to the next level of growth
• Set quarterly goals
• Track your metrics

Putting it all together

I've covered a lot of information here, so I'd like to provide a quick summary.

• Before implementing your digital marketing strategy, set short, medium, and long-term goals
• Create a marketing strategy by following four steps; develop customer persona, set timelines, assess strategies, set a budget
• Customer acquisition involves an understanding of the customer buying process and formulas to calculate the CAC, CLV, and CAC:CLV ratio
• Identify the six areas of growth, score them, and review quarterly until goals are achieved

As you can see, setting up a digital marketing strategy is an involved and complex process that requires a solid understanding of your customers, their behaviour, their needs, your sales process, and finally creating mapping a marketing plan template to identify goals and stay on track. A digital marketing strategy is also a crucial component of your business growth.

I have developed a system to help make running your business simple - BRENT: Business Relationship system for your ENTerprise

BRENT's system involves a master strategy model template that provides an efficient format to map your digital marketing strategy. BRENT's template takes you through your marketing strategy, budget, channels, and metrics step by step. BRENT's automated system supports acquiring the right customers and lets them know you value and appreciate them once they've bought your product/service. Utilizing BRENT's powerful marketing tools aligns you with the most current digital initiatives that optimize and automate your processes to drive long-term success.

If you would like to talk about implementing BRENT in your business, click below.