Ecommerce customer acquisition is tough. You spend money to get traffic, but traffic doesn’t always translate into sales. Customers abandon carts, bounce rates are high, and it feels like you’re constantly battling rising ad costs.
Every store is unique, so there’s no one-size-fits-all customer acquisition strategy for ecommerce. You’ve got to find what works best for you. But trust us, having a solid plan to acquire new customers can really set you apart from the crowd.
Let’s break down how to move beyond the constant churn and start building meaningful, lasting relationships with your customers.
In this blog, we explain,
- How to calculate average ecommerce customer acquisition cost
- 7 Proven ecommerce customer acquisition strategies
- Real-life examples of how to implement them
Ready to double your customer base? Implement a referral program with WPLoyalty to acquire new customers and harness the power of word-of-mouth.
What is Ecommerce Customer Acquisition?
Ecommerce customer acquisition refers to the process of attracting new people to an online store and converting them into customers. The goal of customer acquisition in ecommerce is to expand the customer base and increase revenue.
The success of an online business can often be measured by how well it can acquire these new customers. Additionally, understanding customer needs and preferences helps in tailoring the shopping experience to appeal to them.
Imagine if you have an online store where you sell t-shirts. Customer acquisition would include all your activities to get new people to visit your website and buy a t-shirt.
57% of marketers believe that getting new customers is the most important part of their marketing spending.
How to Calculate Average Customer Acquisition Cost for Ecommerce?
Ecommerce Customer Acquisition Cost (CAC) is the total amount you spend to acquire a new customer. It includes everything from marketing and advertising costs to any other expenses involved in the process. Knowing your customer acquisition cost for ecommerce helps you understand how efficient your marketing strategies are.
To calculate customer acquisition cost for ecommerce, you need to divide the total expenses spent on acquiring new customers by the number of customers acquired during that period. The formula is:
CAC = Total marketing and advertising expenses divided by Number of Customers Acquired
For example, let’s say you spend $2,000 on an ad campaign to get new customers for your online store, and it works! You get 100 new people to buy from you. To find out how much you spent on getting each new customer, you divide the $2,000 by 100. The answer is $20. So, it costs you $20 to get each new customer.
Now, let’s say each new customer spends an average of $30 at your store. That means you make a profit of $10 for each sale because $30 (what the customer spends) minus $20 (what it costs you to get that customer) equals $10. That sounds pretty good, as long as you don’t have other big costs that eat into that $10 profit.
Why is it Essential to Have A Customer Acquisition Strategy for Ecommerce?
Customer acquisition strategies for ecommerce are like the blueprint or game plan for bringing in new customers to your online store. Here’s why these strategies are so important:
- Growth: To grow your ecommerce business, you need customers, period. The more effective your ecommerce customer acquisition strategies, the more customers you’ll attract
- Sales and Revenue: The entire point of an ecommerce success is to sell products and make money, right? Well, you can’t do that without customers. The more customers you acquire, the more sales you make.
- Learning About Your Customers: When you use different strategies to get customers, you can also learn what they like or dislike. This valuable information can help you improve not just your products but also your entire shopping experience.
- Building a Brand: Every customer you gain through your strategies isn’t just buying a product; they’re becoming familiar with your brand. Over time, your brand could become a trusted name for shoppers.
- Build Customer Loyalty: Good ecommerce customer acquisition strategies don’t just bring in new customers; they turn these new visitors into loyal fans. These loyal customers can become your brand’s ambassadors, referring your store to their friends and family.
- Competitive Advantage: In the vast online market, many stores might sell products similar to yours. Effective customer acquisition strategies give you an edge or advantage over your competitors.
- Reduces Costs in the Long Run: Smart ecommerce customer acquisition strategies are efficient. They help you reach the right people without spending unnecessary funds. So, in the long run, you’ll save money while still attracting customers.
7 Proven Ecommerce Customer Acquisition Strategies
Getting customers is like the lifeblood of any online shop. That’s why having a smart ecommerce customer acquisition strategy is super important.
Let’s dive into customer acquisition strategies for ecommerce that increase your customer base and lower your CAC.
1. Determine Your Target Audience
Before you even think about selling anything, you need to know who will buy it. That’s your target audience.
Imagine you run an online shop that sells trendy clothes for young women. Your target audience could be young women between the ages of 20 and 30. Knowing this helps you figure out what they like, where they hang out online, and what grabs their attention. Then, you can shape your marketing around that.
For example, let’s say you find out that your target audience loves to scroll through Instagram and often shop from links they find there. That’s a clue! You should probably advertise on right channels like Instagram to grab their attention and get them to visit your store.
The customer acquisition strategy for ecommerce is to know your target audience. If you get it right, it can make everything else easier and more effective.
2. Implement Loyalty Programs to Attract New Customers
Creating a loyalty program is the best ecommerce customer acquisition strategy to increase customer base with low CAC.
Here is how loyalty programs decrease ecommerce customer acquisition costs.
- Encourages word-of-mouth referrals, which come at minimal cost
- Decreases reliance on paid acquisition channels
Nearly 72% of customers worldwide have loyalty to at least one brand, emphasizing the significance of this customer acquisition tactic. Loyalty programs also help you understand what your customers like. You can see what they’re buying and offer them more of what they want.
3. Start a Referral Program
Referral program is a proven customer acquisition strategy for ecommerce to acquire new customers and attract potential customers.
Offer your current customers a special deal if they tell their friends about your store. When the friend makes a purchase, your customer gets a reward, like a discount or a small free item.
This way, you encourage your existing customers to spread the word, and the new ones also get a nice welcome offer. For example, “Refer a friend, and you Get $10 Off, and your friend gets a free product.”
4. Organize Giveaways
People love free stuff! A great customer acquisition tactic is organizing giveaways.
Customers need something beyond words or surprise to purchase your service and products. By offering a chance to win something, you’re making it exciting for new people to check out your online store.
You can run these giveaways on social media platforms like Instagram or Facebook. Social media as a customer acquisition channel not only grabs attention but also gives people a taste of what you offer, making them more likely to become regular customers.
5. Conduct Deals and Promotions
Ecommerce customers love offers that help them save cash and feel they’re gaining access to something unique and limited.
Customer acquisition tactics for using deals and promotions are:
- Conduct product promotions on your social media profiles
- Gift low-cost products or ones that don’t affect your revenue
- Promote products via shopping or advertising platforms
People show more interest when their loved ones share the offer with them. Since it’s from somebody they know and trust, they feel bound to redeem the offer and keep sharing it with others.
In this way, you can promote your ecommerce store on multiple customer acquisition channels like WhatsApp, Facebook, Twitter, and email. People love it when you offer high-quality products with promotional coupons or discounts.
WPLoyalty helps you improve eCommerce Customer Acquisition effectively
6. Work on Your SEO
SEO is one of the most cost-effective ecommerce customer acquisition channels.
The higher your store appears in search rankings, the more likely people are to visit your site. Think about what people would type into Google if they wanted to find what you’re selling. These are your “keywords.” Put these words in your product names and descriptions so your website shows up when people search for them.
Lots of people shop on their phones, so make sure your website looks good and works well on mobile devices. If it does, you’re more likely to acquire new customers and make a sale.
7. Website Optimization
Among the best ecommerce customer acquisition strategies, improving your landing pages is one of the best moves. Make sure your website loads quickly by using smaller images via image upscaling and making sure the technical stuff is in order. A fast site is more likely to keep people around.
When someone decides to buy something, make it as easy as possible for them to finish the deal. Have easy steps and lots of ways to pay so you don’t lose a sale at the last minute.
Best Real-life Examples of Ecommerce Customer Acquisition
When companies want to acquire more customers in their online stores, they use different strategies.
Let’s look at some famous real-life ecommerce customer acquisition examples to understand this better.
1. Amazon Prime Program
What it is: Amazon Prime is a special membership offered by Amazon. It is the most famous customer acquisition example that increased lead generation. By paying an annual fee, members get benefits like free two-day or quick shipping and access to streaming movies, TV shows, and music.
How it helps in customer acquisition: Amazon’s customer acquisition strategy through Prime entices people with more benefits. People are drawn to the extra benefits they get by becoming Prime members. Once they join, they tend to shop more on Amazon because they want to make the most of their membership. This means more loyal customers for Amazon.
2. Zara’s Fast Fashion Strategy
What it is: Zara, a clothing brand, quickly turns new fashion designs into products that are available in their stores. While some brands take months to release new items, Zara does it in just a few weeks.
How it helps in customer acquisition: Zara’s ecommerce customer acquisition strategy includes ensuring customers always find the latest fashion trends. Customers know they’ll always find fresh and trendy clothes at Zara. This makes them visit the stores or websites regularly. When people visit more often, they’re more likely to buy something, bringing in more sales for Zara.
3. Sephora’s Beauty Insider Program
What it is: Sephora, a beauty and cosmetics store, offers a rewards program called “Beauty Insider”. It is one of the best customer acquisition strategies in the beauty and cosmetics ecommerce domain. Customers earn loyalty points for every dollar they spend. These points can be exchanged for free samples, exclusive products, or even makeup classes.
How it helps in customer acquisition: People love getting rewards! When customers know they can get free samples or exclusive products by collecting points, they are more likely to shop at Sephora. This brings in new customers and also makes current customers buy more.
4. Rothy’s Referral Program
What it is: Rothy’s, an outstanding ecommerce customer acquisition example, is known for its eco-friendly shoes made from recycled materials. Their customer acquisition process for ecommerce involves a referral program where current customers can refer friends to try out Rothy’s products.
How it helps in customer acquisition: When a customer refers to a friend, both the customer and the friend receive a discount on their purchase. This encourages current customers to share the brand with others, leading to more people buying Rothy’s shoes.
5. Girlfriend Collective Refer a friend program
What it is: Girlfriend Collective, showcasing another successful customer acquisition strategy for ecommerce. Their “Share-and-Save” program exemplifies how to acquire new customers in ecommerce.
How it helps in customer acquisition: By allowing a current customer to give a discount to a friend and, in return, earn a pair of leggings (after the friend made a purchase), Girlfriend Collective leverages word-of-mouth marketing. This best ecommerce customer acquisition strategy efficiently draws in new customers to their brand.
Best Ecommerce Customer Acquisition Channels
The right mix of ecommerce customer acquisition channels can effectively help businesses reach their target audience and grow in the competitive world of ecommerce.
Here are some major customer acquisition channels for ecommerce.
Social Media Advertising
Social media platforms like Instagram, Facebook, etc., are powerful customer acquisition channels for reaching a vast audience.
You can use social media as an ecommerce customer acquisition channel to showcase the products to potential customers. You can run targeted ad campaigns that display your products to potential customers based on their interests, location, and other factors.
Because so many people use social media daily, it plays a vital role in the ecommerce customer acquisition strategy. Use great photos and videos taken by video production professionals to grab their attention. Most people are likely to click on it if it looks good.
Use the analytics tools to understand which ads perform the best and why. Use these tools to track metrics like engagement, click-through, and conversion rates.
Email Marketing
Promotional emails, deals, new product alert emails, etc., are a major part of ecommerce customer acquisition. This customer acquisition channel involves collecting emails and sending newsletters or offers. It’s a direct way of lead acquisition, as you can use emails to convert potential leads into loyal customers.
Unlike some other advertising methods, sending an email doesn’t cost a lot, but it can bring in big returns. It’s like having a direct line to your customers’ inboxes, reminding them of all the cool stuff you offer. So, give email marketing a try and see the difference it can make for your business.
Content Marketing
Another ecommerce acquisition channel for acquiring new customers is by creating interesting and useful content. This can include blogs, eBooks, or how-to guides. This ecommerce customer acquisition channel doesn’t directly advertise but offers valuable content.
You don’t have to create something new all the time. You can repurpose older content, too. For example, you can take a part of an eBook and turn it into a separate blog post. It helps you in two ways: you get to show off your expertise, and it helps your website show up in Google searches.
By writing blogs that people find useful, you can draw more visitors to your website. Once they’re there, you can offer them special deals or more content, turning them into potential customers.
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Conclusion
Though ecommerce customer acquisition costs more than retaining existing customers, it is a good idea to do it right for good. Consider it a long-term investment as they enter the customer loyalty cycle.
Understanding ecommerce customer acquisition strategy accelerates business growth. With the strategies mentioned above and a consistent effort, you’ll surely see a boost in your online store’s popularity.
Read More:
To get more customers through social media, you should post interesting things about your products or brand regularly. Engage with people by answering their questions and commenting on your posts. You can use ads to reach even more people. To know what’s working, look at how many likes or shares you get and make changes if needed. Sharing happy stories from customers can also help attract new ones.
Yes, partnering with an influencer can help a lot. Choose an influencer whose followers would be interested in your products. It’s good if the influencer actually likes your product, as it will make their endorsement more believable. Use special discount codes to track how effective the partnership is. A longer-term relationship with the influencer is often more beneficial than a one-time promotion.
Loyalty programs can help you keep your current customers and attract new ones. Offering rewards like points or gifts encourages people to keep shopping with you. Happy customers will also likely tell their friends about the good deals they’re getting, bringing in new business. Plus, the program helps you learn what your customers like so you can offer more of it.
1. Discounts: Offering a discount on the first buy can make people try your store.
2. No Shipping Fees: People don’t like paying for shipping; making it free can win them over.
3. Bundle Deals: Give a discount when people buy more than one item.
4. Limited Time Offers: Make special offers that only last for a short time to get people to buy now.
Working with another brand can help you reach more people. Choose a brand that sells things that complement your products but aren’t the same. You can create a special product together that carries both brand names. Joint advertising or co-hosting an event can also reach more potential customers. Another easy way to collaborate is by sharing each other’s social media posts or stories.
