Customer Acquisition Funnel
Develop your customer acquisition funnel plan
Developing and Optimizing your Customer Acquisition funnel in a Startup and Small business is essential to take you from base clients/customers to your maximum amount of clients/customers and of course, increase your revenue and growth. Simply the Customer Acquisition Funnel is a structured map of their journey leading into paying for your product or service.
Customer Acquisition is a little different from Lead Generation. They both essentially are part of the same system, however, Lead Generation is more suitable to being at the top of the funnel (awareness) where as CA is generally in the middle of the funnel (consideration), just near the final stages of conversion. It is also possible to summarise the CA process as awareness and consideration.
If you have a Customer Acquisition funnel plan, it’s important to frequently reassess and optimize based on your marketing analytics, data, and feedback. Fixing a leaky funnel can be a game changer for any business.
The most important part of the Funnel is to identify the intended results of your funnel. The financial result ($), the funnel result (Purchases, subscriptions, etc), the method of measuring your results (LTV, CTR, etc), among many others. Referring back to my ‘Map’ reference, you must know where you are going and how you will get there. These two areas must be identified before taking your customer on the journey.
Let’s discuss some important funnel development and optimization factors when acquiring customers-
1. Do market research for your startup
Is there a good product/market fit for your service or product? As mentioned in my previous blog (Growth Strategies for Startups) One reason many startups fail is due to their being no product/market fit.
Take a look at what your competitors products and marketing strategy, analyze them thoroughly, it’s important to analyze their successes just as much as their weaknesses.
This research will lead you to understand your customers and potential customers. Understanding their behaviors, actions in-app or on-site, and what they are hoping to achieve through your product.
2. Is your product ready for the market?
Ensuring your product is out of Beta and will ensure your customers with a successful experience and solution. A steady product will lead to a steady customer acquisition strategy. There are also larger brand image repercussions that can come be have longer-term consequences. How many times have you heard about a SaaS product ‘I tried it years ago and it wasn’t great’ or similar, It is hard to re-engage these former customers and turn them into brand advocates.
3. Financial assessment of your Customer Acquisition Plan-
It is important to financially assess the cost of acquiring customers. Estimate the customer acquisition cost (CAC) plan. Knowing this metric along with the Value of the customer client is essential in maintaining the growth of the business. If your CAC is far too high and the Lifetime Value is not higher, then you potentially may be running into a deficit. A great example that comes to mind and is quite common, High PPC spends on Google Ads or Social Media for very few customer or clients acquired. Financial and Risk assessment in funnel development is essential.
A simple method to calculate the CAC is by simply dividing the cost spent on acquiring customers (marketing expenses) by the number of customers acquired for that given period.
4. Develop content marketing for your startup
What content will bring the most value to your audience and have them wanting more?
Your content is highly targeted content that is identifying problems or potential problems, addressing them with authority and knowledge, discussing interesting and relevant topics to your audience, along with building trust for your business and its expertise.
The different types of content and delivery should be matched with your above factors. What content is best? Some types include-
- Video or Digital Story
5. Identify Friction points
This relates back to Market research and customer understanding while moving through the funnel. Are they interested in the product or service? Is the lead not interested in trialing your product or service? Have they trialed although still not interested in purchasing?
Once you have identified the leaks and friction point, its time to get to work! Brainstorm with your team or find a specialist..which leads me to my last piece of advice.
6. Hire a Growth Hacker
Hiring a specialist might be one of the greatest investments you could make for your startup or small business. If you are unsure what a Growth Hacker is and how they may help, A growth Hacker will identify many areas of the funnel that you may have not realized is an issue and they will collaborate to create effective and efficient solutions to have the Customer Acquisition plan developed and optimized