Customer acquisition can be expensive for a new business. It’s important to have loyal, repeat customers, but it can be difficult to find them without spending a large part of your budget. When you’re first starting out, though, doing this could break your bottom line.
Fortunately, there are strategies you can implement to reduce the costs associated with bringing in new customers. To help show you the way, 14 members of Forbes Coaches Council weighed in on how businesses can lower expenses while finding innovative new ways to reach prospective clients.
1. Establish A Referral Program
I would recommend establishing a robust referral program. Not only are referrals warmer leads for you to acquire, but they are also likely to invest more in your products and services. Best of all, unlike many other customer acquisition strategies, with referrals, there are no customer acquisition costs until you make a sale. – Simone Craig, SLC Global LLC
2. Optimize Your Conversion Rates
The quickest way to lower the cost of acquiring new clients is to optimize the conversion rates. An oft-neglected metric, it’s key to optimizing return on marketing spend. The time it takes to review your funnel, sales process, pitch, close and whatever is relevant will be time well-invested. – Sian Lenegan, Work With Sian
3. Adjust Your Mindset
It is a mindset and terminology issue. Stop “acquiring” customers. Instead, have past customers help generate referrals. This process starts with having excellent customer service by putting the customer first. – Sandra Hill, New Horizen Coaching & Professional Growth Advancement
4. Understand Customer Needs
Focus on the customer experience. Listen to customers. Understand their needs, pain points and jobs to be done. Deliver value and help them do those jobs. Doing so gives them a reason to talk about you and your brand. In essence, they become an extension of your sales team. If you’re just focusing on acquisition without focusing on retention, then it’s just all smoke and mirrors. – Annette Franz, CX Journey Inc.
5. Know Which Customers You Want To Attract
Take the time up front to determine what the “right” customers look like. Discern what a high-quality relationship (not just “a customer”) is before you take a broad approach. As in talent acquisition, an initial, broad and generic screening (instead of a more aspirational threshold) slows down the value stream. Holding to a higher standard up front yields better outcomes and less expense on the back end. – Anne Harbison, JourneyLead Consulting
6. Engage Employees In Customer Retention
While customer acquisition costs typically sit with the marketing department, the responsibility should be shared among all employees. Employees are customer No. 1, and modern society values customer ratings and reviews over corporate brand promises. Create a culture in which employees proactively want to advocate for your brand, which organically sources new opportunities without extra costs. – Dan Swift, Empire Selling
7. Enlist Help From Current Customers
The fastest way to reduce new customer acquisition costs is to directly ask current customers for referrals. Too often, executives are reluctant to make the ask and fear they might be putting a current customer in an awkward position. The truth is that happy customers are your strongest evangelists and most powerful selling tools. Make the ask. – Thomas Frank, Ascend Coaching and Training
8. Develop A Process For Requesting Referrals
Developing a strategic and intentional process for asking customers to provide introductions is one of the best ways to reduce the cost of acquiring a new customer and boost profitability. The key to generating predictable profits with this strategy is to build the request directly into your sales/customer service process so that it happens deliberately and consistently with every single one of your customers. – Michela Quilici, MQ Consulting and Business Training, Inc.
9. Focus On Quick Wins
Customer referrals are the cheapest way to reduce acquisition costs, but they don’t happen overnight. Go for some quick wins: Launch a time-bound contest for employees with the most referrals and reevaluate elements of the overall cost. Are there some “nice to haves” that could be eliminated, even temporarily? Finally, what’s the cost-value ratio? Consider the cost of not acquiring new customers. – Susan Sadler, Sadler Communications LLC
10. Create An Intimate Experience With Prospects
Instead of sending them expensive, over-engineered sales messages, create an intimate experience with prospects by providing them with authentic content that will resonate with them and letting them sample your services. They want to self-select. Understand clearly who your ideal client is and the problem they struggle with, their deepest desire, secret shame and potential objections. – Amy Nguyen, Happiness Infinity LLC
11. Understand The Difference Between Lead Flow And Conversion
There are two channels involved in customer acquisition. One is the flow of leads. The second is the conversion of those leads to customers. Understanding the relationship between those two metrics matters. Make sure that you have an effective lead flow and that you are tracking conversions separately. Often, we are spending too much on leads that do not convert well. It begins there. – Kathi Laughman, The Mackenzie Circle LLC
12. Reframe Your Perspective Of Cost
First, ask a better question! For example: “Why not increase the cost of acquiring customers, as long as all customers produce a profit?” Or, ask this: “Why see customer acquisition as a cost instead of an investment?” I believe we need to think of customers as investments, not costs. A scarcity mindset will restrict creativity around the healthy expenses (investments) you make in getting new ones. – Jeff Klubeck, Get A Klu, Inc.
13. Leverage Technology To Stay In Touch With Customers
The lowest-cost customer acquisition is always through referrals. Beefing up your referral and loyalty programs is the best place to start. Fine-tune and streamline your processes of obtaining and managing these quality leads. Make sure to have a customer relationship management program to nurture these prized referrals. Use automated email or SMS touches to stay top of mind with those in your database. – Rick Itzkowich, Vistage Worldwide, Inc.
14. Join Communities Of Like-Minded Professionals
Stop spending excessive money on Facebook and Google and join communities of like-minded professionals instead. Most of all, provide the highest-quality service and value to your clients, and the referrals will follow. Give your client hope and positivity, but most of all deliver on your promises. Most of my referrals come from my clients and my Google reviews. – Paul Silitsky, Paul Allen Career Advisory Group