Why you should care about customer acquisition
- New user: Someone who is onboarding or using your product for the first time and discovering its value
- Active user: A customer who has recognized the core value of your product and regularly uses it
With an expanding universe of digital products and experiences (including 8 million apps), acquisition has become more competitive than ever. At the same time, the cost of acquiring new customers has increased sharply; one study found it shot up by approximately 60% between 2014 and 2019 alone.
Acquiring customers—whether that means new sign-ups, subscribers, or qualified leads—while keeping advertising costs low is a delicate dance. To deftly execute it, today’s most successful companies deliver experiences that “not only exceed customers’ current expectations but also anticipate their future needs,” as a Forrester report put it.
There’s also good reason to consider how you will turn newly acquired customers into your most loyal ones. An estimated 80% of the most successful growth companies generate their value by unlocking new revenue from existing customers.
“You can’t just keep spending on Instagram, Facebook, and Google and think you’ll be successful. You have to know what excites customers.”
Knowing which experiences delight customers—and keep them coming back—requires a fine-grained understanding of their journeys, from how they arrive at your product to what they do once they get there. It means measuring customers’ behaviors as they interact with your digital touchpoints and using every new insight to improve their experience.
“It’s about making sure you have customer data from acquisition to activation [and] through monetization to inform your marketing efforts,” says Drew Teller, who authors TheProductLed newsletter and serves as director of growth at the software company Labelbox.
Increasingly, Drew says it’s also about employing product-led marketing tactics such as making some of the product available to prospective customers—a trend that’s picked up speed with new technologies that make it possible for industries like software as a service (SaaS) to adopt a show-don’t-just-tell model.
“I think that was always the end goal of great marketing—to communicate how a product could solve a problem. Now this happens by demonstrating it, letting people experience it for themselves.”
The key to this process: digital analytics. Its ability to track user behaviors long before they engage with your product helps you better identify and reach the right audiences—and shape the messaging and experiences that are more likely to foster sign-up.