At its most basic, the job of a marketer sounds simple. Find the people who should care about your brand and make them. Most often, you want that care to manifest as those people spending money with you. But despite how simple it sounds, finding the people who should care about your brand has increased in complexity over time as more channels and more brands compete for the ever-fragmented attention of consumers.
The statistics about the cost of customer acquisition are well known. It costs anywhere from four to 15 times as much to gain a customer as it does to keep one happy. Despite this steep cost differential, marketers still need to find new customers. So if it’s going to cost this much, we should at least try to find the best new customers, right? And maybe try to reduce the cost a bit while we’re at it? There are ways of using our own customer data to reduce the cost of each customer acquisition, manage its impact on the overall cost of your marketing and increase the ROI of your marketing spend.
A successful customer acquisition strategy begins with your best customers. Looking at your customer base, who are the people who are most profitable for you? Demographically, what do their households look like? Behaviorally, how do they shop? How do they prefer to interact with your brand? Each of these questions will help you define not only who your target prospects should be, but how best to reach out to them.
These best-customer clones aren’t easy to find, and often aren’t easy to convert. But who doesn’t love a good challenge? Once you have a full picture of your best customer – and the next several segments of good customers – you can model your customer acquisition strategy to target and acquire your ideal customers. What is the highest converting channel through which your best customers shop? Let’s throw some more budget that way, shall we? Which offers are the most appealing to your best customers? Let’s replicate those for the prospects that most closely resemble them. These prospective customers are your best chance of making an expensive process highly profitable.
Not all of your new customers will (or should) match your best-customer mold, just in the way that not all of your current customers are your best customers. But when you target these best-customer clones, you can maximize the value of your marketing efforts. Converting more profitable prospects at a higher rate significantly decreases the cost of those acquisitions as they relate to that customer’s profitability. It is worth spending 10% more per conversion on customers who will have a 150% greater lifetime value to your brand.
When someone asks you where you would spend more money if you had it, the answer should never be, “Let me get back to you.” By knowing your best customers, you know how, where and with whom you should spend your marketing dollars. This segment, this channel, this action. Because marketing.