No business can exist without customers. For eCommerce businesses, acquiring new customers each month is crucial to building a solid customer base. However, doing so is challenging.
Here, in this article, we will learn some of the top customer acquisition eCommerce strategies.
What is Customer Acquisition eCommerce Strategies
Customer acquisition in eCommerce is the process of acquiring new customers for your eCommerce store. The costs involved to acquire new customers are measured by a metric called the Customer Acquisition Costs or CAC.
When you are preparing your go to market strategy, you need to make sure the CAC isn’t too high. Marketing channels having the lowest CAC should be used to generate the maximum profits.
How can we calculate CAC?
The formula for calculating CAC is:
Customer Acquisition Cost (CAC) = Total Marketing Cost (TMC) / Total New Purchasers (TNP)
For example, if the TMC is $10000 and TNP is $4000, then CAC will be calculated as :
CAC = 10000/4000 = 2.5
Customer Acquisition vs. Customer Acquisition in eCommerce
They both are the same. The latter is aimed at acquiring customers for eCommerce stores while the former can be applied to any business strategy.
Customer acquisition is defined as the process of convincing people to become your customers.
Customer acquisition in eCommerce is defined as the process of acquiring new customers to your online store by using a mix of digital marketing strategies like SEO, PPC, email marketing, content marketing, and other forms of digital advertising strategies.
eCommerce Customer Acquisition Strategy
The customer acquisition strategy for eCommerce should be measurable because any plan that is not measurable can’t be optimized further.
The eCommerce customer acquisition strategy happens in several stages:
- Top of the funnel (TOFU): The top funnel consists of the awareness and interests stages.
- Middle of the funnel (MOFU): The middle funnel has the stages – consideration, intent, and evaluation.
- Bottom of the funnel (BOFU): The purchase and retention stages are included in the bottom of the funnel.
Now, we will discuss all the stages of the funnel in the next section.
eCommerce Customer Acquisition Funnel
Here are the different stages of the eCommerce customer acquisition funnel:
Awareness: At this stage, the customers don’t know about the products you sell. They are not aware of your brand. Hence you need to promote your online shop and educate the customers about your products. Content marketing and PR plays a crucial role at this stage because people trust organic search results and articles shared by prominent authors in your niche.
Interest: At this stage, people are already aware of your brand. All you need to do is to persuade them to start buying your products. To do this, you need to win the attention of your customers. One of the best techniques to do is the Grabber technique. This technique suggests that you stay in touch with the customers and let them control the conversation. For example, you can start a contest and ask the customers to share a selfie with your product. When you do that, you enable your customers to take control while promoting your business. This builds their interest in your product and brings them closer to the next stage in the buyer journey.
Consideration: At this phase, your customers know your brand, and they are now considering to buy your products. They have already signed up for your eCommerce store, but they haven’t purchased any products yet.
Intent: Now, when users sign up for your store, some of their actions present a strong intent to buy your products. For example, if they add some products to their cart, it’s an action that sends a strong signal that they intend to buy your products. Such prospects are included in the intent stage.
Evaluation: At this stage, the prospects evaluate whether it is a good deal to buy your product, like comparing the price, features, delivery options, etc.
Purchase: Once the prospects evaluate the pros and cons of the product, they decide to purchase it. However, the funnel does not end here because customer retention is the next stage.
Retention: Customer retention is the ability of the eCommerce store to retain their customers for a longer period. Once prospects become your customers, you must continue to nurture them so that they regularly buy products from your store.
eCommerce Customer Acquisition And Retention
Customer retention is the crucial phase of the overall customer acquisition strategy that most marketers don’t take seriously.
Customer retention is the quickest and most cost-effective way to increase sales because customer retention costs seven times less than acquiring a new customer.
eCommerce Customer Acquisition Techniques
Here are some of the best ways to acquire more customers for your eCommerce store:
1- Use the Facebook Audience Insights Tool
The Facebook Audience Insights tool is a great way to find more information about your target demographic, like their interests and lifestyles. Using this tool, you can create your audience type, select the target group of people from Facebook or your page, analyze your audience to know their likes and dislikes, and prepare your campaigns accordingly.
2- Leverage the Power of Online Influencers
Influencer marketing is one of the best ways to get new customers and improve your branding. Under this strategy, you partner with online influencers in your niche and ask them to promote your products to their followers. You can use tools like Buzzsumo and Followerwonk to connect with influencers and spread the word about your brand.
3- Use Drip Email Marketing
Drip email marketing is an automated email marketing campaign where a series of emails is triggered depending on the customer’s behavior. For example, when the customer signs up, an email is sent to welcome the customer. Similarly, when they leave products in their cart for long, an email is triggered, asking them to complete the purchase. Drip email campaigns are useful in generating maximum sales and keeping the customers happy.
4- Apply Content Marketing
Content marketing is a brilliant way to pull the customers to the next stage in the funnel during the awareness stage. You can create a variety of content pieces to engage customers like blog posts, videos, informative articles, interactive content, etc.
5- Boost Your Organic Traffic via SEO
eCommerce companies should heavily invest in SEO because it can boost their organic traffic. People trust stores that are organically ranked higher in the search results. SEO is a long-term strategy, so you might not see the results initially, but it is beneficial in the long run. Moreover, you can target customers as per the intent of the customers. SEO helps acquire customers at every stage of the customer acquisition funnel.
6- Use the Best Platforms For Paid Ads
If you have just launched your online store, you can’t rely solely on SEO to get the traffic. Paid ads are the best way to acquire traffic for newly launched sites. Besides, paid ads also let you create retargeting campaigns where all such visitors are targeted who had browsed your website before and looked at specific products. Retargeting campaigns help to bring back the visitors and improve the overall ROI.
7- Take The Help of Affiliate Marketing
Affiliate marketing lets eCommerce companies partner with other online stores that share a similar customer demographic who aren’t their competitors. One of the most significant advantages of such a strategy is that you can get a customer database to target for free because there is no need to pay any commission unless a sale is generated.
eCommerce Customer Acquisition Examples
Here are some excellent examples of customer acquisition for every stage of the funnel:
Asana, the team management software uses banner ads to reach customers at the awareness stage. Here is how the ad looks:
Ads like these are excellent because they educate the prospects what Asana does, share stats with them to build trust, and ultimately drive them to take action.
Macy’s uses SEO as their primary strategy to reach prospects. For example, when buyers search on Google with the keyword “men’s jeans,” Macy’s website is shown to bring in more organic traffic to the site that result in more customer sign-ups.
Apparel eCommerce giant, H&M sends discount emails to convert prospects into buyers. Here is an example of a discount email sent by H&M:
People love discounts, and such emails are best when your prospects are there in the middle stage of the funnel. For example, when people have signed up for the store, but are yet to make a purchase.
Amazon is an excellent example of an eCommerce store that sends regular emails to retain the customer. It always sends emails to customers to review the experience they had with the product. Here is how the email looks:
Emails such as these are helpful in customer retention resulting in more orders and a higher customer lifetime value.
eCommerce Customer Acquisition Cost by Industry
According to Propellor, the average CAC across a variety of industries are as follows:
- Travel: $7
- Retail: $10
- Consumer Goods: $22
- Manufacturing: $83
- Transportation: $98
- Marketing Agency: $141
- Financial: $175
- Technology (Hardware): $182
- Real Estate: $213
- Banking/Insurance: $303
- Telecom: $315
- Technology (Software): $395
Besides, according to Demand Jump, the average customer acquisition cost for the eCommerce industry is around $45.27.
eCommerce Acquisition Channels
Here are the top channels for eCommerce customer acquisition:
- Organic Search
- Banner Ads
- Video Ads
- Email Marketing
- Affiliate Marketing
- Social Media Ads
- Blog Content Marketing
Customer acquisition is all about how customers discover your brand and start doing business with you. It is essential to know the top channels of customer acquisition and apply the best strategies to generate the maximum ROI. Last but not least, customer retention should always be a vital part of the customer acquisition strategy because it reduces the churn rate and improves the lifetime value of the customer.