The Complete Guide to User Acquisition The metrics, measurements, and channels

all high-growth businesses need to test today

First of all...What is user acquisition?

We love this definition from General Assembly:

“User acquisition is the science that complements the art of

building an audience and a brand. A quantitative approach to

marketing with a specific goal of gaining customers.”

Customer acquisition is all about data-driven, measurable experiments to find out what makes people notice and engage

with you.

So, what are the important metrics to know when figuring out your user acquisition strategy?

Let’s start with CACWhat is CAC?

Customer Acquisition CostHow can you

calculate CAC? CAC = Total cost / Total customers acquired

Here’s an easy example from KISSmetrics:

If a company spent $100 on marketing in a year and acquired 100 customers in the same year, their CAC is $1.00.

We know what you’re thinking…

“what about long tail marketing efforts, like SEO, which can

greatly contribute to customer acquisition?”

It’s difficult to be cut & dry about it, but KISSmetrics (and others) suggest calculating different CAC variations that factor in this investment from a time & money perspective...

Which leads us to our next point...

How important is it to calculate CAC by marketing channel?

Pretty important.

You must learn (quickly) which marketing channels are bringing in quality customers.

For example, it might be cheaper to bring in customers via PPC or paid social vs. PR or SEM, but if they aren’t your ideal user - that cost becomes futile.

However...

Finally...There will always be marketing efforts & channels that drive word-of-mouth interest & general awareness but might be much harder to attribute, and even harder to attach to a CAC price tag.

So, how can you improve your CAC?

1. Lots of ongoing and correlating work needs to go on in the background:

➢ Improve your user experience

➢ Focus on customer happiness➢ Foster loyalty with users &

encourage referrals➢ Generate goodwill & word of

mouth awareness

Then, know your audience, test various channels, and get really good at

measuring conversions.

What are your ideal users interested in and where are they already reading, buying, asking for advice, etc.? You’ll use this knowledge to target those users in organic and paid channels.

Larry Alton contributed a quick, systematic approach to identifying your ideal audience & channels. Biggest takeaways: break the process down by identifying persona indicators (demographics like gender, geographic location, and more) and follow five steps to engage those audiences.

Know your audience.

Test all the channels. There are A LOT of viable channels depending on your

audience and your business. Don’t get discouraged by channel overload, and don’t discredit new channels as they pop up. You never know what might move the needle and it could surprise you.

You won’t know ‘til you test. (We’ll dig into user acquisition channels a bit later…)

Convert, Convert, Convert.

Are you designed to turn site visitors into customers? This is where landing pages and call-to-actions (CTAs) come into play...

Keep CTAs simple, clear, and compelling.

No more than 5 words per CTA.

Use action-orientated words.

Make CTAs easy to understand & quick to spot. Reduce any friction to

sign up.Use photos & videos.

A/B tests will be your friend. Test, test, test.

Once leads land on your site, are you talking to them?

Tools like live-chat on your site can help you welcome a lead (by treating them like a real-life human) ultimately and hopefully transforming them into an acquired user.

If they don’t become a user, you can learn why & better understand challenges they

face.

OK, back to user acquisition metrics.

What’s next?

Let’s dig into CLVWhat is CLV?

Customer Lifetime ValueCLV measures profit from any given

customerIdeally: CLV > CAC

So, you can see how CLV --- and the more you learn about your users --- directly impacts decisions around product, sales, marketing, customer support, etc. This is important stuff. So, how can you measure your own CLV?

Back your way into it:

The revenue you earn from a customer, over a certain amount of time, subtracted by the money spent on acquiring and serving them.

RJ Metrics provides this free, nifty tool which calculates your average order value, average repeat purchase rate, and CAC.

Kissmetrics highlights the constants to measure when calculating CLV:1. Customer lifespan - the average amount of time one remains a

customer2. Customer retention rate (or churn rate) - percentage of customers who

repurchase over a certain amount of time, compared to another equal amount of time

3. Profit margin per customer - basically breaking down customer sales by margin rather than by revenue

4. Rate of discount - interest rate used in discounted cash flow analysis to determine present value of future cash flows

5. Average gross margin per customer lifespan - you can break this down even further by looking at LTV of an “average” customer vs. a “good” high-performing customer

Measure, Measure, MeasureLeverage tools like:

… to monitor & report on all results from experiments.

Once you start tracking and watching results, don’t be afraid to make changes –- big or small. It’s up to you to see what works best, and you can always improve. The more that you test and optimize, the more intelligent you’ll become about the data that’s most important and really moving the needle.

APPENDIX:Acquisition Channels

We’re almost done!

Social ChannelsThere are a growing number of

social channels where your customers and prospects likely spend a lot of their time, just like the rest of the world.

Go back to your understanding of your audience and then map those personas to the demographics of each network, as well as the opportunities those networks present for you to share updates and content, therefore generating traffic.

Content Marketing

Many companies are big believers in the inbound potential associated with content marketing and are already creating the assets that have proven to attract users: blogs, ebooks, webinars, videos, etc.

Make sure that all content is optimized and reaching its full potential from an acquisition perspective.

So, now what?

➔ cross promote on social➔ spin up landing pages for each campaign ➔ consider email captures for valuable content ➔ leverage buttons and CTAs to convert, etc.

Email Marketing Email is a huge driver of user

acquisition for most companies. If your content and social marketing uses email captures, or you have an existing email list, those email addresses are your golden ticket into the inbox of your users and prospects.

Use email for customer & prospect happiness. If you capture an email, you can reach out with promotions, resources, and education in order to convert leads to users. Emails to existing users should be leveraged for reminders, engagement, and retention.

Public Relations

Media coverage that focuses on your company is direct, 3rd party validation of your product or service, blasting that validation the publication’s audience.

Make sure you leverage company and product news effectively – execs can easily get lost in the weeds and not realize when a product development or significant momentum is newsworthy. When you do get coverage, leverage landing pages so you can specifically target and convert the readers that click through to learn more about your company.

Paid SearchGetting strong organic search results is always a big accomplishment, but paid marketing is a critical way to drive larger numbers to your landing pages and content for conversion. HubSpot does a great job of breaking down how to use Google Adwords.

Create keywords, use Google’s tools like the Keyword Creator and Traffic Estimator, don’t forget to dig into Ad Extensions and Advanced Settings to customize your campaign even more.

Paid SocialUse paid social marketing tips to either drive followers, drive traffic to your content, or drive traffic to landing pages. See what works best - driving traffic to landing pages could trigger a faster conversion, but ads on content might see a higher engagement rate - it all depends.

You have to decide what your audience, targeting, budget, goals & timeframe are and go from there. As always, test, and test again.

SEOYour paid marketing, website, landing pages, and content need to be optimized for search with keywords, links, and specific usability design tricks.

Don’t overlook SEO as part of your online user acquisition efforts.

Check out Moz’s excellent Beginner’s Guide to SEO.

congrats! you are now a user acquisition expert.

Still feeling lost? We can help. Get a FREE business consultation to be paired with the best user acquisition vendors that will drive results.

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that fit their needs.)www.ventureapp.com