Before we get too in the weeds, let's take a step back and talk about what customer acquisition is and means. In the business world, we typically like to visualize and think about the customer acquisition journey with a funnel that shows the process of converting visitors into paying customers.
As visitors move through the funnel to become paying customers, they:
- Gain awareness about your brand, products, and services
- Add your product or service to their consideration pool
- Make a decision to become a paying customer
To simplify this process further, lead generation typically happens at the top of the funnel, lead acquisition happens in the middle, and lead conversion happens at the bottom.
Now, it's also important to realize that even the best companies in the world (online or offline) never convert 100% of visitors into paying customers...it's simply an impossible task.
Let's imagine this offline example using a Nike shoe store in a shopping mall:
- Site visitors: 100 people walk into the Nike store over the course of a day
- Leads: 20 people see shoes they like and ask an employee if they can try on a pair in their size. The other 80 simply leave the store without buying anything. In this example, Nike converted 20% of visitors into leads (80 / 100 = 20%).
- Opportunity: Fortunately for Nike, the store employee is a savvy salesperson and now that he has these visitors attention, he/she is able to offer a discount on the shoes and 10 of the 20 visitors decide to buy a new pair of shoes.
- Customers: At the end of the day, the Nike store generated 10 customers from the 100 visitors meaning Nike converted 10% of the total visitors into paying customers (10 / 100 = 10%).
Why is this important? Well, if that same Nike store wanted to build a model to understand how many customers they might be able to acquire the next day or better yet over the course of a week, they'd have to make assumptions around their visitors, leads, customers, and conversion rates throughout their funnel.
You might be wondering to yourself, "well that's a great example but Nike has actual data to make their assumptions, how am I supposed to create assumptions for my business if I don't currently have visitors or customers yet?" And that'd be a valid concern! For early stage companies, modeling in a way becomes more of an art than a science. Luckily, the internet is full of free historical benchmarks on conversion rates and how to estimate your visitor traffic.
Modeling is meant to be an iterative process, starting first with high-level assumptions. You can always come back and update your model's assumptions based on the new information and data you acquire as you grow your business over the following months and years.
Will all acquisition channels work for every business?
The below list is by no means a comprehensive list of ALL the customer acquisition channels you can take advantage of in 2021. Not every channel will work for your business. Often times entrepreneurs that are early adopters of new customer acquisition channels are the one's who experience the biggest pay offs.
For example: Gary Vee, billionaire business man and media mogul, began posting content to YouTube in early 2006, just one year after YouTube was created. At the time there wasn't a lot of content on YouTube related to side-hustles and entrepreneurship so anyone searching for content in that niche was likely to stumble upon Gary Vee's channel. Gary Vee accredits a lot of his business success to being early to the YouTube craze. Nowadays 500+ hours of video are uploaded to YouTube every minute worldwide...
19 Customer Acquisition Channels and Example Success Stories:
- Viral Marketing: Back in 2012, the subscription razor service Dollar Shave Club turned heads with its now legendary launch video that took audiences on a hilarious walk through their warehouse and poked fun at little annoyances every shaver faces.
- Public Relations (PR): Justin.tv gained an early loyal following from getting written up in national newspapers.
- Unconventional PR: Josh Kopelman had a town renamed half.com, which got him on a lot of national TV shows.
- Search Engine Marketing (SEM): At NexTag, Mark Cramer bought mortgage ads off of Google and found a way to monetize them (for more than he paid).
- Social and Display Ads: VaynerMedia, owned by Gary Vee, generated millions if not billions of revenue for it's clients by creating targeted ad campaigns on Facebook, YouTube, and LinkedIn.
- Offline Ads: Duck Duck Go, the popular search engine famously bought billboards across the country to raise awareness for their company.
- Search Engine Optimization (SEO): At Bingo Card Creator, a collection of sites that gets hundreds of thousands of people each year interested in their offerings come in for free from organic search (mainly through Google).
- Content Marketing: GoPro has 18.4M Instagram followers that generate millions of weekly impressions
- Email Marketing: AppSumo, the life-time deal marketplace claims that the majority of their traffic and sales comes from their persistent email marketing campaigns.
- Engineering as Marketing: HubSpot built an entirely free toolset of related products and services that leads thousands in monthly traffic to their main services and product offerings.
- Target Market Blogs: Reddit gained early users after Paul Graham mentioned them in one of his essays.
- Business Development (BD): Kayak the travel site secured an early partnership deal with AOL which led to a lot of their early success.
- Sales: For years, sales was the go-to strategy for enterprise technology companies like Microsoft and Salesforce.
- Affiliate Programs: The popular newsletter company Morning Brew accredits much of their success to their affiliate program that incentivizes users to invite other readers and peers.
- Existing Platforms: Evernote, the popular note taking app was extremely early to launch on the Apple store which game them a massive edge on their competitors.
- Trade Shows: Steve Welch gained momentum for Mitos through innovative marketing at industry conferences.
- Offline Ads: Chances are you've seen an infomercial for Flex Seal...They've generated millions if not billions from tirelessly running infomercials
- Speaking Engagements: Tim Ferriss, the author of the 4-Hour Workweek created a tremendous amount of awareness for his book by acting as a keynote speaker for events
- Community Building: Peloton makes working out at home social by letting people connect and compete in a community setting.
If you'd like to learn more about these customer acquisition channels and explore a framework for testing and selecting the best acquisition channels for your business, I recommend reading the book Traction, written by Gabriel Weinberg, the founder of Duck Duck Go.