Management guru Peter Drucker once proclaimed, "The purpose of business is to create and keep a customer." If so, it follows that business owners are well-advised to identify the most important customer acquisition channels, and use them effectively.
"Selecting the right acquisition channels is important because of resource limitations—both time and money," says Michelle Pujadas, founder and co-CEO of Devon, Pennsylvania, marketing agency Zer0 to 5ive. "The key is to understand how, where and why your buyers buy, and fully leverage the channels that optimize your exposure and engagement."
That can be challenging. There are a couple of dozen or more discrete customer acquisition channels, from email and paid search to viral marketing and trade shows. Few companies can afford the time and money to seriously use more than a handful—Pujadas says her typical client employs four—but even so it is often tricky to figure out which ones are actually delivering customers.
Understanding Customer Acquisition Channels
The last channel a customer used before making a purchase may not be the most important one. Customer acquisition can be a process that involves many steps and several channels.
"The reality is that for most businesses, you're going to touch somebody 25 to 30 times with something where they see your message before they reach out to you," says Thomas Haire, co-founder of the Direct Response Marketing Alliance, an Irvine, California-based educational and networking group.
Ben Hordell, founding partner of Edgewater, New Jersey, marketing firm DXagency, calls this the problem of "last-click attribution." If a customer clicks a display ad just before making a buy, a business owner may be tempted to spend more on display ads. But the customer may have been originally recruited via an email campaign, then visited the company website and also followed your business on social media.
"That last click might be what got them to the point of purchase and you think that's where all the action is, but it's not,"Hordell warns.
[pullquote showtweet="false" username="Michelle Pujadas" alignment="center"]It's important to measure the ROI of your expenditure in each channel so that you can continue to refine and optimize your spend.
— Michelle Pujadas, founder, Zer0 to 5ive[/pullquote]
As well as studying the ways customers reach you, consider taking a look at the customer acquisition channels that deliver them to competitors. Pujadas says businesses can usually spot the major channels used by others in their industry.
"Then we try to find channels or activities that are a little bit different that can help our clients break through the clutter," she says.
Your firm's age, products and particular needs can also figure into selecting the customer acquisition channels that work for you. Pujadas suggests that startups and companies with new products start with public relations as one of their customer acquisition channels. Business-to-business companies may find email campaigns to be the most effective. Some channels are better at building credibility, others at spreading brand awareness to large audiences.
Selecting Your Best Customer Acquisition Channels
Most businesses will start with digital customer acquisition channels, Haire says. The availability of data that lets businesses target and measure impact of email, banner ads, search engines, mobile marketing and social media campaigns often makes digital the first choice when trying different acquisition channels.
To narrow it down further, businesses might first consider ensuring websites are well-designed to effectively acquire customers. After that, "social, email [and] paid [online advertising] is a good place to start," Hordell says.
But don't forget offline. As online customer acquisition channels become increasingly cluttered and audiences use technology such as ad blocking software to screen marketing messages, offline channels such as radio, television, public relations and trade shows can offer appealing alternatives to businesses that find digital channels aren't working.
Whatever channels businesses attempt, testing and refining campaigns can be a vital part of modern marketing.
"In all cases," Pujadas says, "it's important to measure the ROI of your expenditure in each channel so that you can continue to refine and optimize your spend."
Haire says optimization begins as soon as a campaign is launched, not after it's been running for six weeks. "You're going to run it and see how it did immediately, then you're going to tweak it and optimize daily and hourly," he says.
The advent of digital marketing and the resulting increase in the number of ways businesses can reach customers has complicated the task of choosing and integrating customer acquisition channels. However, the simultaneous increase in the availability of data to track the effectiveness of customer acquisition initiatives can help businesses target their efforts more accurately.
"Technology is helping to make many of our channels better, as well as providing new channels," Pujadas says.
Haire says that even as new social networks swell the number of possible customer acquisition channels, recent moves to relax restrictions on the use of customer data gathered by internet service providers may give businesses a greater ability to choose the right channels.
"There are going to be massive amounts of opportunities for marketers to use data to segment the customers they want and figure out the best ways to attack them," he says.
Read more articles on marketing & sales.