User acquisition – such a small phrase that encompasses such a huge part of your business. So where should you start to master user acquisition for your startup? There is so much content on the web from experts in customer acquisition that we decided to pull together a quick resource guide, complete with our top takeaways from each article and case studies to pore over.
First of all, what is user acquisition exactly?
Love this definition from General Assembly: “User acquisition is the science that complements the art of building an audience and a brand. A quantitative approach to marketing with a specific goal of gaining customers.” Customer acquisition is all about data-driven, measurable experiments to find out what makes people notice and engage with you.
How do I calculate user acquisition cost (CAC)?
As you likely know, CAC is the cost of convincing a potential customer to buy a product or service. KissMetrics details how to calculate CAC by “simply dividing all the costs spent on acquiring more customers (marketing expenses) by the number of customers acquired in the period the money was spent. For example, if a company spent $100 on marketing in a year and acquired 100 customers in the same year, their CAC is $1.00.” That same post dives into how to measure CAC (for specific industry examples), understanding CAC per marketing channel, and how to improve CAC over time.
How can I measure customer lifetime value (CLV)?
CLV measures the profit your business makes from any given customer, directly impacting decisions with product, sales, marketing and customer support. Here is a quick resource to measure your own CLV from RJ Metrics – just enter your average order value, repeat purchase rate, and customer acquisition cost. This is important if, for instance, you are using paid marketing in your user acquisition efforts. Therein, Ada Chen Rekhi advocates that your customer’s lifetime value needs to be higher than your cost of acquisition (LTV > CAC), with a recommended ratio of 3:1 LTV:CAC maximum. In the beginning, you’ll obviously want to test different experiments to find these baseline numbers.
Preparing for user acquisition
Your audience and reach
First things first, you need to know who you are targeting to acquire as a customer. Who is your current customer and who is your ideal customer? What are they interested in and where are they already reading, buying, asking for advice, etc.? You will use this knowledge to target those users in organic and paid channels. Larry Alton contributed a quick, systematic approach to identifying your ideal audience & channels. Biggest takeaways: break the process down by identifying persona indicators (demographics) and follow five steps to engage those audiences.
Your website / landing pages
Ideally, you are sending traffic from user acquisition channels to a specific landing page tailored to those users and the interest they will have in your product or service. Unbounce does a great job of helping its clients optimize their landing pages. Here is a quick list of their landing page best practices, and a scorecard you can put in place, regardless of the landing page service you use. Biggest takeaways: keep CTAs simple, clear and compelling, reduce any friction to sign up, use images or video, A/B test, etc.
As mentioned above, CTAs are an incredibly important part of user acquisition and can drive conversion on your landing pages. HubSpot created a useful resource of CTA best practices. Biggest takeaways: No more than 5 words per CTA, use action-orientated words, be easy to understand and quick to spot.
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Your acquisition channels
Alice Default, Head of Marketing and Growth at Front, contributed a guest post to Ryan Gum’s Startup Marketing blog, arguably one of the most informed sources for user acquisition content. She details how to find and track customer acquisition channels that work for you but she also finds that only four acquisition channels are truly scalable: paid marketing, referrals, SEO and sales.
Of course there are others you should still consider depending on your business – let’s dig into a key resource for that: KissMetrics’ Ultimate Guide to Customer Acquisition:
Social channels – There are a growing number of social channels where your customers and prospects likely spend a lot of their time, just like the rest of the world. Go back to your understanding of your audience and then map those personas to the demographics of each network, as well as the opportunities those networks present for you to share updates and content, therefor generating traffic. All content marketing efforts should be linked to social marketing in order to drive user acquisition. Biggest takeaways: Know which network generates the most traffic (typically Facebook, Twitter, LinkedIn), which has the best tools for sharing and posting, and which might be more of a brand awareness generator (Instagram for example).
Content marketing – Many companies are big believers in the inbound potential associated with content marketing and are already creating the assets that have proven to attract users: blogs, ebooks, webinars, videos, etc. The important consideration for most folks? Make sure that all content is optimized and reaching its full potential from an acquisition perspective. Biggest takeaways: cross promote on social, spin up landing pages for each campaign, consider email captures for valuable content, leverage buttons and CTAs to convert, etc.
Email marketing – This is a huge driver of user acquisition for most companies. If your content and social marketing pushes for email captures, or you have an existing email list, those email addresses are your golden ticket into the personal inbox of your users and prospects. Biggest takeaways: use email for follow-up & retention. If you capture an email, you can reach out with promotions, resources and education in order to convert them to users. Existing user emails should be leveraged for reminders, engagement and retention.
PR – Media coverage that focuses on your company is direct, third party validation of your product or service and blasts that message to that publication’s audience. We’ve covered PR 101 in the past, so let’s focus here on how to secure and optimize company-focused coverage which is known to be the biggest driver of user acquisition (versus thought leadership – bylines, guest blogs, etc.). Biggest takeaways: Make sure you leverage company and product news effectively – execs can easily get lost in the weeds and not realize when a product development or significant momentum is news-worthy. When you do get coverage, leverage landing pages so you can specifically target and convert the readers that click through to learn more about your company.
Paid: Search – Getting strong organic search results is always a big accomplishment, but paid marketing is a critical way to drive larger numbers to your landing pages and content for conversion. HubSpot does a great job of breaking down how to use Google Adwords. Biggest takeaways: create keywords, use Google’s tools like the Keyword Creator and Traffic Estimator, don’t forget to dig into Ad Extensions and Advanced Settings to customize your campaign even more.
Paid: Social – Use paid social marketing tips to either drive followers, drive traffic to your content, or drive traffic to landing pages. Obviously driving traffic to landing pages will trigger a faster conversion, but ads on content will see a higher engagement rate. Biggest takeaways: You have to decide what your audience, targeting, budget, goals & timeframe are and go from there. As always, test and test again.
SEO – This deserves its very own ultimate resource guide, so in the meantime, we’ll direct you to Moz’s excellent Beginner’s Guide to SEO. Biggest takeaways: Your paid marketing, website, landing pages, design, and content need to be optimized for search with keywords, links and specific usability design tricks. Don’t overlook SEO as part of your online user acquisition efforts.
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Your results and analytics
User acquisition is truly different for every single company. Make sure you use tools like Moz, Google Analytics, KissMetrics, and other experts and providers listed in this guide, to monitor and report on all results from your experiments. Once you get those results, do not be afraid to make changes – big or small. It’s up to you to see what works best, and you can always improve. The more that you test and optimize, the more intelligent you will become about the data that’s most important and really moving the needle.
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We hope this resource guide has been helpful. If not, learn from other businesses. Here are our favorite case studies on user acquisition: