In order to become a successful business owner, you're going to need a customer acquisition funnel. A customer acquisition funnel is the process that takes place between when someone first hears about your company and when they finally complete an action that will result in them becoming a paying client.
A customer acquisition funnel is a process that captures, converts and retains prospects into customers.
Acquisition funnels work by following these steps: prospecting, lead generation, conversion, activation and retention.
It is designed to identify where potential customers are falling out of the pipeline so you can find ways to keep them in it.
They also help you understand what products or services your target audience wants - which you can then use to make sure they stay interested in your business.
It can take a lot of different shapes and forms - from physical sales to digital marketing, the number one thing they all have in common is that your goal is to find new customers.
A good customer acquisition funnel will begin with you identifying prospects who might be interested in your business.
The best place to start is with a defined target audience that you know your customers have something in common with - whether it’s their age, gender, location or purchasing habits.
The next step is lead generation – this involves attracting potential customers by using ads and promotions on different platforms like social media and Google Adwords.
You can also create and distribute targeted content, such as whitepapers and case studies.
Once you’ve begun to attract your audience with lead generation, it’s time for conversion – this is where the real work begins!
You need to move them from visitors on your website or customers who have clicked through an ad into a potential customer.
At this stage, it’s time to take advantage of your advertising dollars by working on converting those leads into customers.
You can do this through email marketing and nurturing strategies such as retargeting adverts across social media platforms like Facebook and Twitter.
Once you've got the customer in the door - they're finally ready for activation.
This is where you can begin to create a relationship with them by offering training, support and advice. You should also introduce your brand's other products or services - so they know what else you have to offer.
Finally, retention – this stage doesn’t just happen once the customer has made their purchase; it begins from the moment you take their order.
You need to keep the customer satisfied so they’ll come back for more products, services or future promotions you might have in place.
Once your funnel strategy is set up, it's time to monitor where each prospect falls out of the process - this will help you figure out what needs tweaking and which part isn't working so well.
You can do this by using analytics tools to track everything from website visits and social media interactions, through to subscriptions or purchases - so you know where they are falling out of the process.
This is also important because it allows you to keep on top of your audience's needs; which means that when there’s a new product to promote, you'll know exactly where to put it in the funnel.
A key part of any successful marketing strategy is knowing who your customers are and what they want - so that when a new opportunity comes along, you can position yourself as the company with all of their needs covered.
You need to have one customer acquisition funnel for each stage of the process, whether that's lead generation or activation.
You might need to experiment with different strategies and offers before you get it right -
this is where your analytics come into play again; they will give you valuable insights into what has worked well in the past and can help you make informed choices about how best to spend your marketing budget on each customer segment.
A good customer acquisition funnel is all about keeping your customers satisfied and engaged - so that you can convert them into loyal, long-term clients who will be with you for the long haul!
The customer acquisition funnel is a structure that can help you measure and monitor how effective your process for acquiring and retaining clients is, as well as how you can make changes to the process to better the end result.
You can attract, engage, convert, and keep clients in this manner with minimal continuous work and investment.
You can acquire insights into consumer activities and what goes on in their heads by visualising or even mapping the customer journey.
This reveals when and why a consumer is more likely to purchase your goods or service.
The purchase process is divided into several stages, which include:
Acquisition funnels help to track, measure, and monitor your process for acquiring customers.
They can also serve as tools that let you know where the points of failure are in your journey towards keeping those same customers satisfied with their purchase. A successful marketing strategy includes knowing who your prospects are and what they want.
In the B2B industry, acquiring customers entails a number of marketing and sales procedures aimed at converting potential customers into paying clients.
The process is commonly pictured as a funnel (see diagram above), with suspects pouring in at the top and a percentage of prospects converting to the next stage at each stage, narrowing the funnel as the process progresses.
You'll have at least one blockage point in your customer acquisition funnel, no matter how big or successful your company is.
This is the point at which the conversion rates from one stage to the next are insufficient, or where you have a scaling issue (i.e. you cannot profitably increase the number of people coming out of that part of the funnel because you have maxed out the capability of one marketing or sales technique).
If you remove one blockage, another will most likely appear someplace else in the funnel.
For example, you may have a low number of visitors to your website, which you consider to be the top of your funnel. Alternatively, you may have a lot of visitors to your website but not enough people signing up for your trial.
For example, you may be solving a problem that is not worth spending money on or one for which there are too many existing solutions.
Poor Acquisition Channels- You might have chosen the wrong marketing channels to acquire customers with, resulting in poor conversion rates and high cost per acquisition (CPA).
For example, if your product has no use case through trial, then you might be spending too much on paid advertising.
Long Sales Cycle- It could take a long time for customers to purchase from your business. This is common in BFSI and enterprise sales where the customer requires more information before they can make a decision.
For example, you might be spending too much on lead generation, which results in a high CPA.
Scaling- You can acquire as many customers as you want but if they aren’t profitable consumers then it doesn't matter how many of them there are.
Acquisition is important but it has to result in a business that makes money and scales with your business.
If you can’t find a scalable solution to generate leads and convert them, then the problem will only get worse as your company continues to grow.
Acquisition is not enough; you need proper marketing and sales funnels in place that ensure revenues continue growing with customer acquisition. The best way to do this is by creating an optimized customer acquisition funnel.
You may have chosen the wrong pricing model - you either need to reduce prices or increase conversions.
For example, you are not capturing enough contacts or information from your website visitors. You may need to optimize the conversion rate of sign-ups and free trials, which would require a separate funnel.
You might be spending too much time on Acquisition vs Engagement - Acquisition will always yield less revenue than engagement (just like how CAC is greater than LTV).
For example, you might be investing too much on Acquisition (i.e. paid advertisements) and not enough time/money on Engagement techniques like email acquisition or blogging to keep your prospects engaged.
You can convert more of these visitors if they are kept engaged with the product regularly through emails and blog posts which will reduce Acquisition costs over time.
You can have a high Acquisition cost and not enough customers to justify it.
Your product might be too complex - If customers have a hard time understanding how your product works, then they will not convert to paid customers.
In this case, you may need to create an easier-to-understand pricing model with less features and more benefits for the customer. Or perhaps you are trying to sell your product to the wrong audience.
For example a complex product might require a longer sales cycle which would result in Acquisition costs being higher than revenue.
You have too many steps in your funnel- All of the acquisitions are not converting to customers because there is resistance at every step due to low quality leads, ineffective CTAs or unclear communication about what happens next.
The Acquisition cost will be high and you will not be able to scale as Acquisition costs will continue to rise.
For example, you might have too many steps in your funnel and customers are dropping off at each step because they don’t know what to do next or find the value of doing it. You can improve this by creating a customer acquisition funnel template with clear calls-to-action that reduce the number of steps.
Unqualified Prospects- Your prospects are looking for what you offer but they're either too expensive or out of your reach in terms of cost, experience, etc. to acquire them as customers (e.g., if you’re a startup BPO business operating with lower margins than other players in the industry ).
Poor Acquisition Pipeline- If you’re not attracting quality leads, it's likely that your potential customers aren't aware of what problems and challenges you're able to solve for them.
You might need a better understanding of how value is created in your business: who creates it and where - or if- they recognize its worth.
For example, you might not be targeting the right audience or creating effective Acquisition campaigns.
You may have a low Acquisition cost and high Customer Lifetime Value (LTV) because your customers are very loyal and make repeat purchases regularly . This can result in Acquisition costs being lower than revenue.
Beyond Product/Market Fit- Your product or service may be perfect for your target market, but you're not reaching them in the right way.
For example, if you're targeting an audience that is hard to reach online (e.g., older or less tech-savvy people), then you would need Acquisition campaigns tailored towards these segments such as offline advertising and marketing efforts on social media platforms like Facebook and Instagram.
More Acquisition leads are converting to customers than Engagement leads -
Acquisition rates are higher because the lead is very interested in your product or service and has already decided that they want it, whereas engagement leads have yet to make this decision.
For example, you might be trying too hard at Acquisition by spending more time on paid advertisements but neglecting your organic Acquisition efforts such as blogging and social media marketing (SMM).
