As a small business, no matter what part of the journey you're on, acquiring a new customer is always the important goal to be working towards and experimenting on. What worked yesterday may not work tomorrow, and it's crucial to understand all the ways in which you can get new clients so that you can put focus in multiple avenues.
In this guide, we'll cover not only how to get new customers, but also how to look at the whole picture: the cost to get a customer, how reliable that strategy can be, and how to continue iterating as you get your 1st customer to your 100th customer.
If success means getting new clients, then you need to understand whether the cost to acquire a new customer is worth it. Enter, customer acquisition cost (CAC), which is a basic calculation of the cost of your marketing efforts divided by the number of new customers you get. For instance:
Marketing Spend ($100) / New Customers (10) = CAC ($10 per customer)
If you spend $100 on an email newsletter sponsorship, and you get 10 customers from it, your CAC would be $10 per customer. To further understand what a "good" CAC is, you have calculate your profit by including Average Cost Per Service together with your Gross Margin, which we will say is 25%.
Average Value Per Service ($300) x Gross Margin (25%) - CAC ($10) = Profit
This would come out to be a profit of $215 per average customer who pays for your services. As a business that relies on ongoing revenue through recurring appointments, classes, the cost per acquisition doesn't have to be low in order for you to make a healthy profit. In what is known as Customer Lifetime Value, a metric which means customers stick around for a long time (ie: years), you may find that a high CAC provides profit within the first month, instead of other business models in which customers may only purchase once.
At the core of every acquisition strategy, you must calculate the return of your efforts on your profit. Often times it is hard to measure success, as some avenues of marketing and acquisition can be a slow play. Content for instance, is free to produce and publish, but hard to measure directly with acquisition. Branding, as a concept is a huge part of getting new customers - as between 70% to 80% of consumers research a business online before making a purchase. So investing in a solid, functional website, and utilizing good photos and imagery - can lead to new customers, but it's not easy to measure the effect of good branding.
The most common and successful platforms for digital paid advertising are: Facebook, Instagram, Google Adwords (Search and Display), LinkedIn, Twitter and Bing. For text-based ads on Google and Bing, you can pay to bid against specific keywords and phrases. For instance: one could bid for the top search result for the phrase "Personal trainer in Boston." This would be a super effective advertisement, because it allows businesses to capture the need and want for that service at the exact time that a customer is looking for it. The downside is that often it can be very expensive to outbid competition. Luckily, Google Adwords provides excellent Keyword research tools so that you truly can maximize the money you spend on relevant keywords.
For display (images) ads like those on Facebook, Instagram, and other social network platforms - these advertisements can be very affordable and effective. However, unlike search ads, display ads are just hoping to catch a customer mid-scroll, offering them something they may or may not be interested in purchasing or learning more about. Luckily there are many ways to grab attention - via video, an article, or attention grabbing photo - and Facebook for instance has a robust Ads Manager, in which you can try out multiple types of ads, different graphics, different text to see which performs best.
When you're running paid advertising, there CPM and CTR are the two most important metrics (CAC aside). Cost per one thousand impressions is CPM, which is also known as impressions - how many times your ad is seen. and Click through rate (CTR) is what percentage of people who saw your ad clicked further to your website or other. As a business explores digital advertising, you can find that the customers you get from Facebook and affordable but they aren't really the right people to work with, or that the Google Adwords customers are great but expensive to acquire. At a certain point, you'll want to focus on one avenue and need to be able to effectively calculate which is right.
There are also so many websites outside of the main platforms and search engines that you can find success with. You may turn to marketplaces like Yelp, Thumbtack, Glassdoor, or more localized websites like your town directory, local newspaper's website, or other. An important point to think about is: are your ads reaching the right people? While you can localize and narrow your targeting on Facebook and Google down to a specific location and person's interest, you may find that localizing your focus is really important for your service offerings.
Online sponsorships is an off-shoot of paid advertising. Instead of a traditional ad, you can find partnerships and sponsorship opportunities that are more natural feeling. For instance, sponsored content on an industry blog, negotiating an influencer story and post on Instagram or TikTok, or paying for a content spot in a popular email newsletter. Paying to write on a relevant industry blog is a great way for to find new clients clients, and be seen as expert in your specialty.
In order to find potential sponsorships, identify a list of 20 or so blogs and influencers that you want to reach out to. Focus on those that resonate with your and the audience you want to speak to. For instance if you're a personal trainer in Boston that specializes working with pregnant, focus your search with mom blogs and influencers in New England. Doing this type of paid acquisition can be hard to track, often content like that can take days, weeks or months to pay back in dividends. Even if you use a UTM link (to track) or a specific discount code, it's not fool-proof tracking to understand your ROI (return on investment).
Content marketing is basically free marketing, which is why it can often be the last thing that businesses focus on, or be the hardest to determine whether "it's working" or not. Content marketing comes in many shapes and sizes - for instance having a social media presence is content marketing. Being a diligent blogger or vlogger is content marketing. Email marketing campaigns is content marketing. When you are sharing information, that is content!
Some might encourage you as a business to produce content constantly, post every day, email every week - but if you're a one person business - it's incredibly hard to do it all. You don't have to make yourself crazy with the idea of constant content, but you can put in upfront effort and spread it out over the course of a few weeks. Build an achievable campaign for a few months at a time - and set clear goals. Often you will see that your content is evergreen, and that you can anticipate seasonal offers and updates.
While not dissimilar to sponsored posts, it can be quite challenging to equate specific customer acquisition with content, so the next best metric is creating an email list. Email is one of the most effective ways to communicate and nurture prospective customers (known as leads) and retain and engage current customers. 59% of marketers say that they see ROI from email marketing.
As for social media, there are a lot of ways to promote your business, showcase your expertise, and increase your brand awareness and audience. We would suggest having a presence of all platforms that make sense for your business. If you work with business professionals, focus on LinkedIn, if you predominately work very locally, utilize Facebook, and if you have a customer base that gears towards the younger demographic, be present on Instagram. You do not have to post everyday, but you should look at social content as not only a way to broadcast yourself, but also as a means to engage with other businesses like yourself, interact with customers, and show off your personality!
84% of people around the world said that word-of-mouth recommendations from friends and family was their most trustworthy form of finding new brands. Jump on that! Going back to our example customer acquisition cost (CAC) of $10, if a new mom who is working with a personal trainer in Boston refers 2 of her friends when they become pregnant, suddenly the CAC for these 3 women has become $3.33. The more referrals, the better rate of profit you will see.
There are many ways to explain this idea of referrals to existing clients - you can do it in person, invite them through email, and put the offer on your website and social media profiles. It is a great way to find new business, as well as strengthen your relationship with existing clients. Often times it's expected that both the new and old customer get some monetary incentive, or at a minimum some sort of gift, which will encourage them to refer more and more people!
Just became digital advertising has become popular, don't discount the benefit of print media, direct mail, TV advertising, radio ads, and more! There is a large demographic and audience that doesn't respond well to digital ads (or may never even see them). Reach these audiences through more traditional means, which are also less expensive than they used to be. The costs associated with more traditional means can be for the physical goods, printing costs, and production cost for video. This is a great avenue to consider if you are a very local business - but again, may prove to be most effective in the long run based on your customer lifetime value.
How to enhance your search-ability with SEO:
Are you Googleable? SEO, also known as search engine optimization, is the practice of showing up first in search results (and not paying for it via Adwords). The way SEO works is by paying attention to two key metrics: click through rate (CTR) and time on site. Google wants to know out of every 100 people that see your website on Google, how many times do they click? And then, for those who click, how long does a person spend on your site before leaving? Keeping that information in mind, it's important to make your site interesting and relevant. Try adding a video to your site to keep people engaged.
There are a lot of tips and tricks related to SEO, for instance, ways to format your page names, adding descriptions and tags to images, adding backlinks to your site (like by adding your website to your social profile and email signature), as well as regular updates to your pages to stay top of mind.
But, it's more than these little things. SEO requires knowledge of keyword research and being diligent about utilizing those keywords and phrases on your website and blog to help Google's ranking of your website. Consider, "Personal trainer in Boston" why pay for that spot when you can build it into your site? While the cost of organic website traffic is basically the cost of your website builder and hosting service, it can be quite challenging to equate customers from organic traffic. Typically organic traffic can take a while to be effective. It takes time and patience for Google to recognize your website as trustworthy.
All of this information falls under the guise of building a brand for your business and marketing. While you may be a personal trainer from Boston, a therapist in Chicago, or a music teacher in Atlanta, and you are great at what you do, as a self-employed business owner, you have to get comfortable and confident with also being a salesperson, marketing, brand strategist, and excellent communicator.
Whether you choose to put your focus into social media, a blog, email newsletter, in person with customers through a brick and mortar space, via events, conferences or other - you inevitably with grow an audience and share your values and mission with this group. In todays consumer world, brands really resonate with people. 89% of customers stay loyal to brands that share their values. Embrace this! Gone are the days of corporate and robot like professionalism, now, people want to see your human side.
Of course, building a brand doesn't equate to customer acquisition, nor is it easy to decipher overall how your branding has led to new business. Think of branding as the first impression you make, so if this means you need to invest in excellent design and high quality photography, or designing a website that looks modern and functions well, that upfront cost will be worth it.
There are so many incredible free services for your business that you can utilize to make your life easier. Here are just a handful!
Email marketing tools:
Customer acquisition as a whole is a way to get customers to discover your brand. In order to find success, you must be prepared with a website, point of sales, and online presence that showcases your services offered and your values and mission. While relying on customer loyalty and ongoing business is an important aspect to your business, finding new customers will always be the top priority, and the channel in which you find success one month, may not be as lucrative the next month.
As you test the waters and move from one channel of acquisition to another, set yourself up for success by implementing measurement so that you can be sure to pinpoint success, low costs of customer acquisition, and which customers work with you the longest or bring in referrals. For this, we say - stay nimble! Don't get too comfortable with one for of advertising so that you don't challenge yourself to test out another form. The platforms in which we use today are constantly changing, algorithms that we rely on for social media also change, and as new competition and industry standards change, you will also want to be staying on top of what is new and getting involved.
Acquisition is an important part of running a business, and it does not have to cost a lot! Here at Bounce House, we help one person businesses become more legit, for lack of a better term. If you're interested to learn more on how you can sell services, manage customers, and get paid all through Bounce House - check us out!