There are more options than ever open to B2C marketers for customer acquisition. Co-reg, search marketing, social media marketing, content marketing, paid advertising, affiliate marketing… the list is seemingly endless. And as all of these channels have opened up, marketers are more than ever concerned about where to spend budget allocation for prospect and customer acquisition.
All too often, marketers take an uneven approach to acquisition, without a clear strategy in place and with minimal testing, going through lead-generation sources as though concocting a recipe for the first time. With that kind of scattershot approach, though, it’s sure to be a recipe for disaster, both in terms of budget allocation and in terms of performance.
A study by Buttle Associates found, perhaps surprisingly, that only 34% of participating companies had dedicated customer-acquisition budgets, and that, contrary to the assumptions companies make, merely putting a process in place and dedicating a person or persons responsible for acquisition was not enough to create a robust customer acquisition program. Shifting both money and prioritization to the campaigns themselves made all the difference.
Building a solid customer list and increasing ROI happens when acquisition budgets are spent on the most effective sources, the sources that deliver the best customers. And budgets are best spent when there is some agility in the process, when poor-performing sources can be turned off and best-performing sources increased.
Email marketers need to grow their customer base in a way that’s cost-effective, low-risk, responsive, and scalable.
So let’s start by talking about cost-effectiveness. According to a survey by Software Advice, a mere two percent of marketers rated leads generated from email marketing as “high cost,” indicating that email remains the lowest-cost online marketing channel. So we’re already off to a good start.
But what I really want to suggest is a change in focus. Looking at customer acquisition through a cost-per-prospect perspective (as opposed to a cost-per-lead perspective), the focus shifts from numbers coming through the pipeline to the quality of the prospects becoming subscribers. Taking the long view and focusing on potential customer lifetime value by targeting qualified prospects reduces the cost of acquisition and ensures better lifetime engagement and higher ROI.
The second concern for marketers, after cost, is risk. For many email marketers, while online lead generation provides low-cost access to prospects, the risk is that unless these programs are managed precisely according to best practices they can not only deliver low response rates, but also can damage a company’s online reputation. Any performance-driven customer acquisition solution therefore has to use technology to verify leads, certify lead sources, and automatically stop poor leads from being deployed before they damage a brand’s reputation and inbox deliverability.
What email marketers need is a process that begins by automatically evaluating each individual lead source, rather than lead quality and performance in the aggregate. What happens if you implement this process is that you will automatically turn off those lead sources that provide a disproportionate number of high-risk leads before they injure your ISP reputation, and automatically throttle to receive more leads from your best-performing, clean, low-risk sources.
The solution also needs to provide the best opportunity for immediate responsiveness in acquisition via a real-time trigger, so that a subscriber's real-time action immediately elicits a real-time response. For example, when a subscriber clicks on a “learn more” button, a relevant follow-up email is auto-generated that contains more information about the brand or offer. These triggered emails can be segmented as finely as necessary.
Many acquisition processes implement auto-responders for new-customer signups, but it’s time that we went beyond auto-responders. What that means is setting up a system to immediately nurture leads, a system that includes a cascade of behavior-based promotional emails. In other words, not every lead gets the same cascade: it depends on what the person did, requested, commented on, or filled out, just as once they become customers, people get cascades that react to the actions they take. Triggered responses consistently provide higher ROI.
And, finally, email marketers need an acquisition solution that’s scalable: that will work just as well for 10,000 emails as it will for 100,000 emails and beyond.
Once you have these four components -- cost-effectiveness, risk protection, responsiveness and scalability -- in place, you’ll have a winning customer acquisition solution, and you’ll know that you’re spending your budget in all the right places.