Win your First (or Next) 100 Customers with these Ecommerce Customer Acquisition Strategies
Editor’s note: This article was originally published on June 6, 2016. Aubrey Harper updated it to reflect the latest data and insights.
Have you seen the video of two business owners doing a happy dance after a customer leaves with their purchase? A customer acquisition gone right — and viral.
Whether it’s your 100th or 100,000th customer, winning a new customer is certainly dance-worthy, but it rarely comes easy.
So what does it take to get someone to buy what you’re selling?
For ecommerce businesses — no matter the size — you start by finding relevant people to get through the (virtual) door. After that, it’s all about building a relationship that proves the value of your product and brand.
Want to learn more about how to get more customers online? Read on to discover:
- What is customer acquisition in marketing?
- How to calculate ecommerce customer acquisition costs
- 3 tips to get more customers for your ecommerce business
- Examples of ecommerce acquisition strategies
- How to establish your brand’s acquisition strategy
What is customer acquisition in marketing?
Customer acquisition is the process of finding people who want to buy what you sell and converting them to become your customers.
When done well, it’s also about finding the right people who will become loyal customers and advocates for your brand.
A brand’s first few customers are likely to be family and friends. But what happens next? Branching out from people loyal to you and finding new customers loyal to your brand is a huge step in an ecommerce business’s growth.
Getting your first (or next) 100 customers doesn’t have to feel overwhelming or impossible.
Consider your pool of potential customers: Is it anyone with an extra dollar to spare? Probably not. It’s people with a specific need who could benefit from your product or service.
Once you identify a potential customer, the next step in converting them into a customer is to introduce your brand.
Sometimes, the introduction is enough to lead to a purchase. Usually, though, the introduction is just the start.
From there, customer acquisition becomes a process of building a relationship. A business owner’s goal is to make their brand visible and accessible to the potential customer, especially at the critical moment when they decide to make a purchase.
How to calculate ecommerce customer acquisition costs
To evaluate if your customer acquisition strategy is working, you can calculate the cost of acquiring each new customer.
Ecommerce Customer Acquisition Cost = Marketing Spend / New Customers
Marketing spend is every cent you put towards brand awareness, paid advertising, content creation, and more. That also includes advertising budgets and even headcount resources.
As an example, if your marketing spend for one quarter is $1,000 and you get 50 new customers, your customer acquisition cost (CAC) would be $20.
Once you know how much each new customer costs your business to acquire, compare it against your average order value to determine whether your customer acquisition strategy is profitable.
Profit = Average Order Value – Costs of Goods Sold – Customer Acquisition Costs
This formula calculates one-time profit — but if your customer is happy, they might buy again and become a repeat customer, with little or no additional cost.
It’s important to note that repeat customers have a higher lifetime value, which is the cumulative amount they’ll spend with your business over all time. Once you calculate your average customer lifetime value (CLV), estimate your expected total profit with this formula:
Expected Profit = Average Customer Lifetime Value – Costs of Goods Sold – Customer Acquisition Costs
Gaining a new customer is usually more expensive than selling again to a current customer, so make sure your customer acquisition strategy doesn’t end at a first purchase.
Once you understand your costs, you might realize your customer acquisition strategy needs to be more efficient. Or maybe your profit is okay, but you want it to be great.
That’s where a more targeted approach to customer acquisition comes in handy.
3 tips to get customers for your ecommerce business
What business doesn’t want more customers? But customer acquisition isn’t just about the short-term win — it’s about creating a scalable process of finding and converting customers. The more potential customers you find, the more you can convert.
Except… if you’re looking for the wrong person to become a customer.
You can spend just as much budget finding people who will never be customers as the people who would be lifelong advocates for your brand. Growing a loyal customer base starts with finding people who are likely to love your products and brand.
Here are three tips to find those loyal customers so you can set your business up for long-term success.
1. Know your best customers
Customer research is critical for any business. To make customer research most effective, don’t just interview any customer — look for your best customers.
I’m talking about the people who can’t get enough of your products. Who open every email, regularly visit new product pages, and write a glowing review on your site.
Once you understand those customers — whether you directly interview them or you use your customer data to analyze their behavior on your website — you’ll have a better idea of who your ideal customer is.
Once you know more about your ideal customer, you can better gauge what messaging will resonate and even what channels they frequent to get your brand in front of them.
2. Reach customers through key channels
In marketing, a channel is a way of engaging with customers. Here are a few ecommerce marketing channels you can explore as part of your customer acquisition strategy.
- Email marketing: Sending newsletters, nurture campaigns, and more
- Website/Organic search: Optimizing your website for search, starting a blog
- Social media: Posting on Facebook, Twitter, Instagram, Pinterest, Tik Tok
- Paid advertising: Running ads on Google Ads, Facebook Ads
- Customers: Creating refer-a-friend programs, promoting user-generated content
- Influencers: Sponsoring content to access an influencer’s audience
- Third-party sellers: Selling through Amazon FBA, wholesalers, etc.
Each of these channels can help you reach new customers, but the question you must answer for your business is: Which channels attract the right customers?
Certain channels give brands more flexibility than others. Channels that you own and are in full control of — like your website, email marketing, and mobile marketing — enable you to deliver highly personalized experiences that reflect your brand’s personality.
Using these owned channels, brands are in control of the experiences they create and the relationships they build with customers, which can lead to higher customer loyalty. The cost of acquisition is also lower, because there’s no third party to pay for customer attention.
In contrast, channels such as paid search, display advertising, and third-party marketplaces have become restrictive in how you can engage their audiences, leading to less control and effectiveness of your marketing efforts overall. Plus, these channels can have higher acquisition costs because you’re forced to bid against other brands that may be able to spend more.
How to use direct-to-consumer channels to find the right customers
Direct-to-consumer (DTC) brands have the advantage of dealing directly with customers, versus using a third-party channel as a middle man.
Because the DTC model is built on personal relationships with customers, owned channels are mission critical to creating a personalized customer experience.
Of course, even DTC brands use channels like paid advertising to get new customers to their site. But once a customer is onsite, a DTC brand owns all data the customer shares — such as their email, likes/dislikes, and more — and that can help brands build more authentic and sustainable relationships with customers.
And, even better: With all of that data, you can better identify your best customer to target with channels like paid advertising.
Creating a lookalike audience to target with ads is more effective when you have actual data on your audience, like average age, gender, and location. Data like that comes from interacting directly with your customers through your social media, website, and email marketing.
3. Convert customers by building personalized relationships
Once you’ve interacted with a potential customer, they may hesitate — for days, weeks, or more — before purchasing. This consideration phase is the perfect time to build a relationship between your brand and your potential customer.
Like in-person customer relationships, building a connection with people online is about meeting often and remembering what they told you last time.
In digital terms, that means creating a personalized experience that makes online interactions stand out and feel human.
Creating automated email flows targeted to key audiences — like new subscribers who haven’t yet made a purchase — is a great way to scale your personalized marketing efforts.
Personalize by asking customers questions
Want to get even deeper with personalization? Living Proof isn’t afraid to ask customers questions to better understand their needs. Check out this hair care quiz on their website:
Based on the answers visitors give, Living Proof can immediately suggest relevant products. Plus, the brand gains valuable data to tailor product recommendations based on what individuals shared in the quiz.
Adding a human touch like this into your customer acquisition strategy can turn a simple website visitor into a loyal customer.
Examples of ecommerce acquisition strategies
Ready for some ideas to kick start your own thinking? Here are some examples of customer acquisition strategies that ecommerce businesses have used with success.
The concept behind a referral program is simple: Consumers trust their friends more than they trust an unknown brand.
It’s also highly likely that your best customer’s best friend falls within your target demographic, since they may have shared interests. Tapping into your customer’s network can unlock great customers who don’t yet know about your brand.
Encourage your loyal customers to refer their friends and family by launching a refer-a-friend campaign. Offer your existing customer a discount, give their friend a special deal, or do a combined offer like Dermalogica does — everyone wins!
Cart abandonment targeting
One way to convert new customers who are visiting your store is to reduce cart abandonment, or when a customer leaves the site without purchasing the items they placed in their shopping cart.
One ecommerce brand, Vintage Marquee Lights, knew visitors were abandoning their carts, but they didn’t know why.
To understand, they simply asked customers. They created a survey to get insights from visitors. The exit intent pop-up appeared when a user was about to leave the site.
The answer? Most people were leaving because they thought the products were too expensive.
With that information, if a customer selected the “Items were too expensive” option, they were shown a coupon to incentivize them to continue shopping.
Along with a pop-up, an abandoned cart email can call potential customers back to their forgotten items. As long as your visitor starts the checkout process and enters their email, you can automate an email sequence to re-engage that person even after they’ve left your site.
Only Curls sends a personalized note that lets a shopper go back to their cart with a simple click. They also provide other relevant products and customer reviews to increase the likelihood that the customer will convert.
Another way to find new customers is to run a giveaway contest to encourage people to share your brand with their network.
If you want to build buzz around a new product or line of products, you might decide to have several winners or create a contest that offers a daily winner. This helps your customers feel like they have a higher chance to win. Plus, this tactic can lead to winners sharing that they’ve won and influence their connections to also enter.
Make sure that whatever item you’re giving away is either a product or related to your product offering—that will ensure that you only attract customers who might later be interested in purchasing.
UK-based jewelry brand Fenton started a giveaway campaign that yielded impressive email engagement. Check out the email that got a 70 percent open rate, plus drove traffic to their Instagram.
Establish your brand’s acquisition strategy
Customer acquisition isn’t an overnight process. Building everything from brand awareness to customer referral programs takes time, but winning the customer is always worth it.
As a refresher, here are three tips to find customers:
- Know your best customers
- Find your customers through key channels
- Convert customers by building personalized relationships
Follow these tips while you’re building your customer base. Then, start practicing your happy dance… and tag @klaviyo — I can’t wait to see your moves! (Judgment-free zone, I promise. My go-to move is still the sprinkler, so I’m hoping to learn something new.)
Want to learn more about customer acquisition? Check out these resources on how to get and convert more customers for your business.Back to Blog Home