How to turn up the heat on your customer acquisition strategy
For subscription eCommerce entrepreneurs, perfecting a winning customer acquisition strategy is an ongoing challenge. Competition is not only abundant, it is fierce. While leveraging automatic recurring billing is a powerful business strategy, business owners are constantly looking for ways to stand out in the virtual crowd.
These days, targeted digital marketing is on steroids, and analytics dashboards have become so complex that you can basically read your customers’ minds. While these methods are effective (and necessary) for online businesses today, your competition is also tuned into them. That’s why you must think outside the box to win the customer acquisition war.
The cost of gaining new customers
As the old adage goes, “You have to spend money to make money.” A price tag can be assigned to every customer gained, and a successful customer acquisition strategy will bring that number down. A business’ customer acquisition cost (CAC) is calculated by dividing total marketing costs by the number of customers acquired during the same period.
Profitwell reports that CAC for B2C and B2B companies has increased by nearly 50% during the past five years. Fortunately, there are many available tools that can help with getting customers to convert, especially for businesses that use the Magento eCommerce platform.
If you want to strive for a lower CAC, you may need to tweak your customer acquisition strategy. Here are four techniques (and the Magento tools you can use to implement them). If you are not currently running your business on Magento but would like to explore the benefits of using the platform, feel free to schedule time on our calendar for a brief complimentary call with one of our eCommerce experts.
1. Launch an affiliate program that allows people who already believe in your brand to market your products for you
Research by HubSpot shows that consumer trust is declining, and 81% of online shoppers trust the advice of family and friends over what companies tell them. While companies continue to invest in advertisements, 65% of customers do not trust them. A higher number (71%) are distrustful of social media ads specifically.
More than ever, spenders rely on customer reviews to make purchasing decisions. Even then, we know that there are ways for companies to thwart them. Some resort to adding fake positive reviews about their products and services. Others spend big dollars on online reputation management solutions that push negative reviews off of Google’s front page while bringing positive ones to the top.
All of the above reasons shed light on how launching an affiliate marketing program for your business can be an effective customer acquisition strategy.
You may be wondering, “What is an affiliate marketing program?” Basically, it allows people to share a personalized link with their followers where they can purchase your proucts. When someone purchases a product via the affiliate’s link, the person gets a cut of the sale.
There are three big reasons why affiliate marketing has so much potential as a customer acquisition strategy.
- As stated previously, people are more prone to buy something that someone they trust will vouch for. This is known as social proof. Most people will not put their name on something they have not tried themselves or do not believe in, so affiliates who market a product come across as believable.
- In the age of Instagram and YouTube influencers, gaining just one successful affiliate marketer could make a significant impact on your eCommerce subscription business. The larger the following that person has, the more you will be able to profit when affiliate links leading to your products are shared.
- It costs you nothing until a sale is made. At that point, you give the affiliate marketer their share and take the rest. This beats spending money on Facebook ads that are less likely to lead to a sale.
If you are unsure about how to launch an affiliate marketing program, the Magento Marketplace is a great place to start. There are many extensions that enable businesses to launch and manage affiliate programs from the Magento admin panel. Here is a roundup of 10 Magento affiliate program extensions that are available today.
2. Start a blog and post quality content your readers will actually find useful
The rise in business content marketing initiatives is part of the reason CAC has grown. According to Profitwell’s data, companies are pushing out more than 300% more in-depth blog posts per month. With supply and demand in full effect, content marketers are charging at least 25% more for quality, meaningful pieces. But the cost is increasing for a reason -- because it works!
The research also shows that 47% of buyers view three to five articles before speaking with a sales representative. Furthermore, companies with blogs get 67% more leads.
If you are convinced that posting quality content should be part of your your customer acquisition strategy, there are many Magento blog extensions you can incorporate into your eCommerce site. The cost ranges from free to hundreds of dollars. The Aheadworks Blog extension, for example, is on the higher end of the spectrum. It costs $349 and comes equipped with a broad range of features.
While it may be worth investing in a full-time content marketer to join your team, there are many talented freelancers who can help you achieve your content marketing goals. Here are five places you can find them.
3. Create a fun and engaging contest
We all know people love freebies. Doing a giveaway of one of your products or services is a great way to generate a buzz around your brand. If this sounds like a good fit for your customer acquisition strategy, getting the word out is key (or your efforts will be a flop). This may be a situation where paid social media ads are worth the investment.
When launching a contest, don’t lose sight of the fact that some people sign up for online freebies all the time. You want to attract people who are likely to become recurring customers, and the best way to do that is by ensuring the people who enter the contest have some skin in the game.
For example, if you offer a subscription box filled with pet products for dogs, you may encourage people to enter the contest by posting a photo of their dog on Instagram. In the contest rules, instruct them to tag your page in the photo and to use a specific hashtag in the description. Have them write 3-4 sentences on why their pet deserves the freebie. You may also ask them to tag three of their friends to help spread the word.
Do you see how this method is more strategic than simply allowing onlookers to enter your contest by clicking a button? A customer acquisition strategy like this helps weed out people who are not willing to craft a post that draws attention to your brand.
The Magento Marketplace features extensions that help merchants launch and manage contests. Search for the Competition Creator extension by Wyomind. You may also consider gamifying promotions. Knowband just released a “spin and win” Magento 2 extension that allows merchants to display a gamified subscription popup. With one virtual spin, visitors can score half off of their first order (or any other discount you want to offer).
4. Offer flexibility and a simple checkout process through membership management tools
When it comes to subscriptions, Magento merchants need a subscription management system that can handle the full spectrum of scenarios.
If you sell skincare products, for example, you may have a customer who wants their favorite face wash delivered once a month, anti-aging moisturizer that arrives every six weeks and an exfoliating sugar scrub that is delivered every-other-month. They also expect the convenience of adding and deleting products at any time.
PowerSync’s solution, mPower for Magento subscription management, is designed to handle the most complex membership management scenarios. It is configured to serve both customers and merchants by seamlessly automating processes (such as payments and automatic recurring billing cycles).
The checkout process is also key for getting customers to follow through with transactions. As we highlighted in our last blog about achieving Magento mobile success, time-consuming checkout processes create a bottleneck for buyers. mPower saves the latest payment and shipping information in a person’s profile so the checkout process is quick and easy.
A positive customer experience is still the best customer acquisition strategy
While the above four strategies are worth pursuing for your subscription eCommerce business, providing a good customer experience overshadows them all.
HubSpot’s findings show that 82% of 1,000 survey respondents said an immediate response is “important” or “very important” when they inquire about a product. That number jumps to 90% when looking for customer support specifically. Additionally, 80% said they would be quick to stop doing business with a company after having a poor customer experience.
The bottom line in today’s marketplace is that customers must always come first. They have more options than ever, and they will switch in a heartbeat. There is a good chance the strategies in this post will win people over and help boost your business’ profitability. That’s because through them, the customer gains something, too.
If you would like to learn more about how mPower can help with subscription eCommerce, membership management and automatic recurring billing, fill out the form below to schedule a free consultation.
Do you need expert guidance?
Our eCommerce experts are passionate about sharing strategies to help make businesses successful. We understand that there are many facets to consider when it comes to online selling success, and a winning customer acquisition strategy is only one piece of a much larger puzzle.
If you would like to learn more about the benefits of using the Magento platform and other eCommerce strategies, we invite you to schedule time on our calendar for a brief, risk-free, complimentary evaluation. We look forward to hearing your story and sharing some insights about how you can elevate your business to the next level.