Customer Acquisition: How to Get New Customers for Your Business

by Jake Lee

Whether you're a new entrepreneur trying to land your first 10 or a seasoned veteran trying to land your 10,000th customer, customer acquisition never loses its relevance.

But for many entrepreneurs, sales are unpredictable and acquiring new customers can feel like a game of chance.

To grow your business consistently and profitably, you need to consider customer acquisition as a process rather than an outcome: how you can systematically acquire new customers, how much it costs to attract them, and how much each customer will cost your business.

What is customer acquisition?

Customer acquisition is the process of finding, enticing, and persuading prospective customers to buy in a measurable and repeatable way, rather than in a random way.

Customer acquisition occurs in stages and is visualized as a funnel.

Top of the Funnel (Awareness): The goal at this stage is to build awareness and get ahead among potential customers. Typically, you can focus on a large, broad audience who are interested in your brand or product but aren't sure if they'll buy it. Baby brands can use the hashtag #nurserydesign to expose their posts and products to people looking to decorate their nurseries on Instagram.

Mid-Function (Consideration): Prospects moving from the top of the funnel to the middle of the funnel are typically showing that they are considering a purchase, such as signing up for a newsletter or following your brand on social media. Now it's up to you to convince them to become your customers.

Bottom of the Funnel (Purchase): This is the final step in converting prospects into purchasing customers. They took actions that indicated a strong purchase intent, such as adding a product to their shopping cart or signing up for a free trial. Now, for potential customers who are about to make a purchase decision, send them an incentive like a discount code at this stage.

There are many ways for businesses to find and convert new customers online. Discovering, testing, and scaling new marketing strategies makes it easier for businesses to accurately track new customer acquisition through digital marketing.

How do I calculate Customer Acquisition Cost (CAC)?

Costs are based on the marketing activities undertaken to acquire new customers.

To ensure that your customer acquisition efforts are effective, you need to understand how to calculate customer acquisition cost (CAC).

Customer acquisition cost is the marketing cost divided by the number of new customers.

For example, if you pay $500 a month to create content for your Instagram page and you gain 50 customers, your customer acquisition cost is $10.

Marketing Cost ($500) / New Customer ($50) = CAC ($10)

The reason companies calculate customer acquisition costs is to understand whether their marketing practices are profitable. For the example above, if each customer spends an average of $50 on their first purchase from your business and your gross margin on each order is 50%, your profit on each order is $15.

Average Price ($50) x Margin (50%) - Customer Acquisition Price ($10) = Profit ($15)

For brands where long-term customers are more valuable, it may make sense to not make a profit on the first purchase. If customer data shows that customers are likely to continue purchasing your brand's products after their initial purchase, you can spend more to acquire new customers.

Google Analytics, Shopify Reports, and other tracking/reporting tools can help you understand your customer acquisition costs for each marketing vehicle. Experimenting with different customer acquisition methods and delivering results is the key to finding new ways to grow your business.

​Let’s take a look at some customer acquisition strategies you can use to grow your business and how to prioritize them.

7 customer acquisition strategies and how to use them

1. Use paid advertising

One of the most common ways to acquire new customers is through online advertising. So many ecommerce brands advertise on Facebook, Google, and other platforms because they offer a wide range of measurement tools to optimize your ads and make the most of your budget.

Among online advertising, Facebook ads and Google ads are one of the biggest sources of paid traffic. But any other social platform, marketplace or search engine you can think of also has the option to buy ads, so the most important thing is to understand who your target audience is and on which platforms they spend the most time.

Each paid advertising platform has its own unique characteristics, but they primarily charge for user impressions (how many times your ad is shown) using a metric called CPM (cost per thousand impressions). Additionally, advertisers can typically choose who they want to target based on demographics, interests, and other characteristics. These targeting parameters provided by online advertising platforms help you narrow down your audience and acquire them through paid advertising.


- Fast growth: Some people might argue that paying traffic fees is the fastest way to expand your business quickly. Exposure to individuals' businesses is guaranteed, and with the right planning and optimized technology, businesses can quickly increase their budget to acquire new customers.

- Targeting Ability: One of the biggest advantages of paid advertising is that you can choose exactly who you want to show your ads to. For example, Facebook ads allow you to use interest and behavioral targeting to reach a realistic niche market based on user behavior on the platform.

potential pitfalls

- High prices: Due to changes in algorithms and competition, discussions about the rise in CPM costs of popular online advertising platforms such as Facebook continue every year. While they can still acquire customers profitably, brands may need to work to improve website conversion rates, customer retention rates, and average order value to offset increasing advertising costs.

​- Lower prices: Running paid advertising isn’t difficult, but the complexity of the platform may be enough to intimidate the inexperienced. Fortunately, there are blog posts or free video courses that cover the basics of advertising platforms like Facebook and Google, as well as details on optimizing and scaling your campaigns.

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Businesses with a Budget: Most advertising platforms do not require upfront or minimum spend for placement. But that doesn't mean it's cheap. Success in paid advertising requires testing different creative variations, audiences, and overall strategies to become profitable, so those who have the money to invest in marketing will reap long-term benefits.

Companies with Creatives: One of the keys to success with paid advertising is having the right creatives to attract new customers to your business. If your brand has the photos, videos, and copy to successfully introduce your products to new customers, you may want to consider paying for advertising.

2. Influencer sponsorship negotiations

If you have a marketing budget, one of the quickest ways to get your brand or product out to potential customers is to pay an online marketer to promote it. Influencer marketing through Instagram marketing, YouTubers, bloggers, etc. has become a popular form of online advertising, with surveys conducted on Twitter rivaling recommendations from real friends.

Success in influencer marketing involves finding the right influencers to promote your product. The challenge is identifying people who are interested in your brand's products, have an active following, and the creative ability to create content that reflects well on your brand.


Brand Awareness: Working with large influencers with hundreds of thousands or millions of followers can help you gain customers through brand awareness. Marketing through influencer marketing should prioritize not only attracting new customers but also selling specific products by exposing them to a wider audience.

Niche Targeting: Small-scale influencers usually have a small but loyal following and can immediately promote to potential customers. These smaller influencers typically cost less to work with, but their engagement is higher, which means their sponsored content is more visible to their followers, which can increase customer conversion rates.

potential pitfalls

Tracking Return on Investment (ROI): One of the downsides to using influencers as a paid marketing channel is that most social platforms do not allow extensive tracking like sponsorships. Paid advertising platforms can track users who show or click on ads, but most influencer posts need to be tracked through UTM links, discount codes, and other creative mechanisms. If you don't intentionally track your users, the risk is that you won't know if your sponsorship is generating revenue.

​Upfront Payment: There are various platforms and experts who can connect your brand or business with influencers to promote your products. Most creators ask for an advance payment, either as an advance fee or as a product donation. This helps protect influencers from scammers, but it can be risky because it doesn't guarantee that the influencer will help you acquire customers. You can mitigate these risks by creating a fee-based payment structure, strengthening your agreements with contracts, or using escrow services.

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Product that needs a demo: Let's say you have a new, innovative product that the average consumer is unfamiliar with. A simple photo ad may not be enough to attract potential customers. You can work with influencers to provide testing, demos, or validations of your products that you can share online to help convince potential customers.

Trendy brands or products: Influencers are always looked to for their ability to discover new products or trends, whether in fashion, music, or technology. If you partner with an influencer to share the best elements of your brand or company, you'll have a better chance of keeping your audience engaged.

3. Create an email list

Collecting customer information ( lead generation) is the first step in securing customers. Collect information from potential customers to nurture them or retarget them with ads to convert them into purchasing customers. Most people rarely make a purchase right away from the first site they visit.

Collecting email addresses is considered one of the best information gatherings for customer acquisition because email marketing generates revenue for businesses. According to Campaign Monitor, 59% of marketers surveyed say they get the most ROI from email. do.

There are many ways to build an email list, from driving paid traffic to a page in an email capture form to giving new customers discount coupons to celebrate signing up. Once you've built your email list, you can run mail campaigns and set up automated emails to send messages by launching an email marketing service like Omnisend or Klaviyo. These emails are personalized and triggered based on behavioral data to help you convert prospects into customers.


Recurring Revenue: One of the biggest benefits of an email list is that it expands the lifetime value of each customer you acquire by giving you the ability to market to your customers over a long period of time. Once your emails are collected, you can set up email automation to keep driving customers and recommend new products.

Customer Data: In addition to nurturing leads, your email list can help you find new prospects using the “Referred Users” feature. Referral Users is a tool provided by advertising platforms such as Facebook or Google that allows advertisers to find customers similar to their existing prospects by uploading a CSV of the emails they have collected.

potential pitfalls

Delivery delay: As spam filters become more sophisticated, it is becoming more and more difficult to get emails into customer mailboxes, with more than 50% of emails being considered spam. Personalizing your email communications and following best practices for email design can help increase the deliverability of your campaigns.

​Low-quality emails: Large email lists sound good, but quality always trumps quantity. While some email delivery methods may be effective, it is important to analyze the conversion rates of each email source to obtain quality information. One way to reduce your email marketing costs is to regularly clean out your list of people who haven't opened your emails in a long time.

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Businesses that sell consumables: If your products are consumables, need to be replenished repeatedly (like coffee), or have a line of complementary products (like clothing), email can be your biggest source of recurring revenue. . If your business has a full list of products that you can continually introduce to your customers, you can maximize your return on investment by sending out reminders of those products via email and creating strong repeat purchasing habits.

New product launch: If your business is in the product development phase, collecting emails can help you prepare for a successful launch. One famous example of building a pre-launch email list is the story of men's grooming brand Harry's, which collected 100,000 emails in a week. A waiting list can help you get people on your waiting list who are interested in your product and can ease anxiety about new products.

4. Start the referral program

A personal recommendation from an acquaintance can be of great help. Nielson's research shows that word of mouth is one of the most influential forms of marketing. People trust what they know, so if someone they know recommends a new product or brand to them, they will listen.

It's up to business owners to make it easy for loyal customers to recruit their contacts to use referrals as a new customer acquisition strategy.

This can be achieved by setting up a referral program where you get rewarded every time a new customer who is referred by an existing customer purchases a product. Apps like Referral Candy, Loyalty Lion, and all offer ways to encourage people to recommend your business through marketing emails, discounts, and incentives for both existing and new customers.


Low Cost: Because personal referrals are so effective, using a referral program is usually considered a low-cost form of new customer acquisition. Fees associated with setting up the program include subscriptions to the referral program app and discounts on recruiting new customers.

Repeat purchase: When an existing customer recommends a new customer, a small benefit is provided, such as a discount code for the next purchase. This has the added benefit of encouraging repeat purchases from existing customers. This makes your referral program more profitable.

Customer Loyalty: A study by a renowned business school professor found that recommended customers have an 18% lower churn rate than detractors and are 25% more likely to continue spending with a brand. These numbers show that referral programs attract more loyal and profitable customers to your business.

potential pitfalls

Low engagement: Even if you launch a referral program, there is no guarantee that your customers will participate enthusiastically. If customers haven't received good service from your business or don't like your product enough to recommend it to others, your referral program may not be as effective as it should be.

Organization and Tracking: Part of your referral program can include loyalty for each customer that generates rewards by tracking who referred new customers, so staying organized is an essential part of keeping this program running smoothly. This is why many businesses use apps to leverage entire referral programs. Manually tracking references can lead to customer dissatisfaction.

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Doing Business with Existing Customers: To run a successful referral program, your business must have an existing customer base. If you have a small number of existing customers, your referral program may not be as effective as it should be.

Do business with loyal customers: Every seller wants engaged customers who are willing to share and recommend products, but not all of them. With great customer service, fast shipping, and easy returns, you'll create loyal customers who will happily recommend you to their friends.

5. Run existing ads

We can see that digital advertising hasn't pushed out old-school advertising, as modern marketers are using past advertising mediums like print and direct mail to reach new customers.

As display advertising has become more common, digital marketing has become easier for consumers to ignore or reject by blocking ads. From small ads like printed flyers to billboards and even TV, traditional media can be a great way to reach new audiences by diversifying your customer acquisition channels.

At the same time, technologically speaking, advertising cost reduction and accessibility for small and medium-sized businesses have been greatly improved. Today, apps like Touchcard allow you to access online stores and use customer data to send physical postcards to customers.


Cost savings: The cost of advertising on the biggest TV shows is falling, according to AdAge. Advertising prices for the top 10 programs are far beyond most companies' budgets, but some studies show that the CPM for TV advertising is as low as $2.26. If your goal is to reach as many people as possible at a low cost, the broad reach of TV advertising makes economic sense for your brand.

Consumer trust: Consumers are building trust in digital advertising, especially as big brands launch online campaigns. However, print and TV advertising still top the charts among consumers' most trusted advertising vehicles, according to a US study published by MarketingSherpa.

potential pitfalls

Tracking : The downside to advertising that reaches a wide range of people, like traditional advertising, is that it can't be tracked precisely. If you are running a print or TV campaign, you cannot always know the exact ROI of your campaign because, unlike direct access on the web, no cookie value is left behind. However, some digital-first brands have shown how to track customer acquisition in these campaigns by incorporating first-time purchase discount codes into their subway ads.

Upfront Investment: The lack of budget and flexibility inherent in traditional advertising is often seen as risky. Digital, programmatic advertising allows companies to pivot and reinvest based on real-time results from their campaigns and what works on smaller budgets. When marketing messages aren't tested in a more flexible environment, upfront investments in traditional media can fall short of expectations.

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Local Business: Traditional advertising that charges upfront fees can be found in local newspapers, TV, and radio advertising to make these mediums more effective. If your business can only deliver to a specific area or is designed for a local audience, such as celebrating a city's sports team, advertising in local media can help you get your business noticed by your audience at a low cost.

Business with high-priced products: Every seller wants highly engaged customers who are willing to share and recommend products, but not all customers are like that. With great customer service, fast shipping, and easy returns, you'll create loyal customers who will happily recommend you to their friends.

6. Search Engine Optimization

Many customers looking for a product or service start searching on Google. Creating website content that helps your brand appear in Google search results for relevant search terms is called SEO (Search Engine Optimization).

Conducting keyword research and implementing the results into the content strategy of your website pages and blogs can help you rank higher in Google, bringing search traffic full of potential customers to your website.


Passive and Organic Traffic: Every second, more than 40,000 searches are entered into Google's search engine, making it the most visited website on the Internet. If you can optimize your website and content towards this goal, you can win over some of the people searching for products in your niche as customers.

EVERGREEN: SEO is referred to as an “evergreen” traffic source because content created and published months or even years ago can continue to rank on the first page of Google and drive traffic to your site. The good part about evergreen content is that it can bring new traffic to your website without having to continually pay for every new visitor.

potential pitfalls

Slow growth rate: If you want your sponsored link to appear first in Google search results so visitors can see it first, you can pay with Google Ads. However, if you want to appear on the first page organically, it may take a long time for Google to recognize your website as a trustworthy source.

Competition: Even though there are over 30000 monthly searches for each term, Google shows over 227 million results for these terms. Certain niches can be very competitive when it comes to search rankings, making it harder to rank on the first page. Tools like Ubsesuggest and Ahrefs can help you understand the level of competition for different search terms and keywords and give you ideas for less competitive alternatives.

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Someone willing to race against time: SEO is a well-measured and reliable source of organic traffic, but success requires ongoing effort and learning. Google algorithms are subject to change, and keeping your strategies up-to-date on both the technical and creative aspects of SEO is essential to keeping your channel working.

Content Creators: SEO may seem quite technical, but it is widely known that the quality of your website's content that satisfies searchers plays an important role in ranking in Google search results. The ability to write well and come up with creative content ideas based on keyword research can help your content rank higher than your competitors.

6. Build an online audience

Social media and numerous platforms such as Facebook, Instagram, YouTube and Twitch have helped us build an online following of potential customers. Companies like SandCloud and Gym Shark have grown their Instagram followings from hundreds of thousands to millions, making them influencers.

There are many ways to build an online audience on social media. For most people, it takes time, consistency, and content to attract and retain new followers. Not only does your online following lend authority to your brand, but it also allows you to reach customers and generate new leads whenever you want to promote a new product or increase sales.


Organic Traffic: Although there may be costs associated with creating attractive social media accounts, they are often considered organic traffic sources because they help you share your content for free. Viral videos can appear on high-traffic trending or search pages across a variety of platforms, and your followers can gain organic followers and leads by sharing your content or tagging your brand.

Social proof: Social media has no shortage of visible numbers, such as the number of likes or comments a post receives or the total number of followers. All of these metrics give your brand authority in the form of social proof. When potential customers check out your brand online, the size of your following adds legitimacy to your brand.

potential pitfalls

Slow growth rate: If you make it easy to generate leads, everyone has influence. Building an organic following and converting it into a means of customer acquisition takes time, unlike paid advertising.

Algorithm changes: One of the biggest threats to content creators on any platform is a drop in engagement due to sudden changes in algorithms. In fact, in 2016, some YouTube channels claimed that their views had dropped by as much as 30% due to suspected algorithm changes. The ability of your content to reach that audience and convert them into actual customers is always controlled by the platform itself.

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Content Creators: If you're a creator skilled in writing, photography, video, or generally entertaining people, building an online audience may be a good use of your skills.

Companies on a Budget: If you're strapped for cash, building an online audience organically can be a cost-effective way to attract new customers. Unlike paid advertising, there is no fixed cost to expose your brand to new people. You can build your audience not only with money, but also with your own creativity.

How to grow

Customer loyalty and repeat purchases are important to your business overall, but attracting new customers through customer acquisition can help you grow beyond your current base.

Customer acquisition is about understanding how customers discover your brand and why they buy, so you can optimize and scale the process. This allows you to spend your marketing dollars more strategically and grow your business consistently over time.

Figuring out what customer acquisition tools to use for your business requires you to continually test new tools and approaches to figure out what works best for your unique business and avoid relying too much on a single source.

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