The 3 Ways Of Acquiring Customers At Scale
Scalable vs non-scalable:
Scalable customer acquisition prioritizes cumulative growth over one–off occurences
Non–scalable growth strategies can still be helpful, especially in the early stages of a business.
What are some scalable strategies?
Investing in advertising
Paid ads include Google AdWords, Facebook ads and others. Ideally, you should have a Customer Lifetime Value (LTV) to Customer Acquisition Cost (CAC) ratio of 3:1 or better. This a rule of thumb to avoid bleeding yourself dry before your customers pay up.
The exponential growth of paid ads:
Ad Spend > More Customers > More Revenue > More ad spend
Paid ad channels are growing
Businesses can theoretically reach over a billion customers through ad networks. That number will continue to increase as the number of paid advertising channels (as well the total number of Internet users!) increases.
’’Search PPC is a very crowded channel, but can still be one of the most effective due to its high intent.’’ – Brian Balfour, VP Growth, Hubspot
Strategy in action: In 2013 Ebay spent $480 million on paid advertising and turned $7.7 billion in revenue!
2. Incentivizing word-of-mouth
While word–of–mouth is a natural process, it can be managed and amplified with the right tools.
Optimizing viral growth
Word–of–mouth can be amplified by introducing incentives, and by A/B testing all sorts of elements along the customer experience. The holy grail is a viral factor exceeding 1.0: Every customer brings at least one friend aboard, causing the covered ’hockey stick’ growth.
’People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.’’ – Mark Zuckerberg, CEO, Facebook
Example: Dropbox initially utilized Google AdWords, paying $233-$388 to acquire customers for a $99 product. They then switched gears to focus on incentivizing word – of – wouth, giving free additional storage space to users who referred other users. Dropbox hit 200.000.000 users in 2013 primarily due to incentivized word – of – mouth.
3. SEO with unique content
If your product creates a substantial amount of unique content, (articles, infographics, interviews, etc), it’s worth using SEO to acquire customers through their search engines queries.
Search is increasingly valuable
There are hundreds of billions of new search queries every year, making SEO one of the most scalable strategies of all.
’’The days of SEO being a game outsmarting algorithms are over. Today content strategy and valuable, sustainable strategies are essential, not just tricks and links.’’ – Adam Audette, Chief Knowledge Officer, RKG