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.
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.
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;
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.
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.
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.
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:
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.
Strategies to improve customer acquisition
To bring your CAC:CLV ratio down, and increase your profits, here are a few effective strategies.
I've covered a lot of information here, so I'd like to provide a quick summary.
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.