Whether you have a new business trying to attract its initial 100 customers or have an established eCommerce platform with 10,000 active users, customer acquisition is always relevant. Many retailers deal with unstable sales, and for them, gaining new customers can feel like a roll of the dice. To eliminate this uncertainty from your retail venture, it is vital to have a detailed customer acquisition process in place.
A comprehensive plan will help optimize lead generation and strengthen your customer retention efforts. After all, increasing your customer retention rates by 5% can boost your profits by 25% to 95%. To ensure steady growth of your business, you must consider customer acquisition efforts as an ongoing process and not an outcome. This approach will ensure that you consistently add new users, optimize the customer acquisition cost, and maximize customer lifetime value. Let’s explore the best customer acquisition strategies to help your business enjoy sustained success.
What is a Customer Acquisition Strategy?
The purpose of customer acquisition strategy is to attract new customers to your business. It is the process of turning interested prospects into loyal customers and driving the growth and profitability of your retail enterprise.
For instance, if you are launching a new clothing line, your strategy could involve a mix of digital advertising, promotional offers, and targeted marketing campaigns.
An effective customer acquisition strategy is all about understanding who your customers are, what they want, and how you can meet their needs better than your competitors. Let’s have a look at the different business areas whose success depends on this strategy:
- Customer Base Expansion: A well-executed strategy helps expand your customer base to drive business growth.
- Brand Recognition: It assists in enhancing brand recognition; making your business stand out in the crowded retail market.
- Revenue Generation: By attracting the right users with a successful customer acquisition strategy, your business can enjoy increased sales and higher revenues.
- Customer Retention: This plan lays the foundation for boosting customer loyalty, leading to repeat purchases from your store.
- Business Sustainability: A robust customer acquisition strategy ensures long-term business sustainability in the competitive retail landscape.
5 Best Customer Acquisition Strategies for Retailers
Here are the top 5 customer acquisition methods to achieve success with your retail enterprise.
Consider Digital Advertising
For eCommerce-first retail businesses, the absence of a physical storefront can sometimes be a hurdle. Unlike the traditional brick-and-mortar business model, you do not have a space in an online business where customers can experience your products firsthand. This is where digital advertising comes into play, as it allows you to build brand recognition and establish a strong presence in the retail ecosystem.
It is like having a virtual storefront that’s open 24/7 and is accessible to customers from all over the world. With a well-rounded retail advertising plan, you can effectively reach out to your target market, showcase your products, and encourage them to make a purchase. Some of the effective digital marketing strategies you can leverage to attract organic traffic are Search Engine Optimization (SEO), email marketing, social media marketing, referral programs, and content marketing.
But the key to success with this customer acquisition strategy is not just about reaching a large audience; it is about reaching the right audience. By leveraging data and analytics, you can tailor your ads to match the preferences and shopping habits of potential customers. It is a great way of creating new opportunities for your marketing funnel. This way, you are not just casting a wide net; you are using a targeted net that is more likely to reach the right customers.
Another key aspect here is that digital advertising offers a hard-to-match level of flexibility and scalability. You can easily adjust your social media advertisements based on performance, market trends, and customer feedback. You can also scale up your customer acquisition strategy as your business grows, ensuring that the brand enjoys better visibility with prospective customers.
Promote First-Time Customer Offers
As you try to build recognition for your brand, employing first-time customer offers can be an integral part of your customer acquisition strategy. These promotions serve as an incentive, encouraging potential consumers to make their first purchase from your store.
Consider a fashion store as an example. When your fashion outlet offers a 20% discount for first-time buyers: While you are reducing prices, you are also creating an entry point. This offer could be the nudge that a customer needs to go from browsing to buying. Such deals can significantly lower the barrier for new customers who are hesitant to try a new brand, especially when they compare it to established competitors.
Using deals and discounts is one of the best practices to quickly build brand recognition, attract the right customers, and drive retail success. Here are some key points that you must remember while using first-time customer offers:
- Customer Value Perception: First-time offers can enhance the perceived value of your brand in the eyes of the customers. This helps in making them feel that they are getting more for their money.
- Data Collection: These offers can serve as an effective tool for collecting customer data, which can be used for future marketing efforts.
- Word-of-Mouth Marketing: Customers who benefit from a first-time offer are likely to share their positive experiences with others, driving word-of-mouth marketing.
- Market Differentiation: Offering unique first-time offers through targeted social media advertising can help differentiate your brand in a crowded market.
Banners offering promotional discounts or deals can be useful. While they help in attracting attention, they also create a sense of urgency, encouraging customers to make a purchase before the offer ends. For example, in the fashion retail sector, first-time discounts on seasonal collections can drive significant traffic and conversions. Deals and promotions are highly efficient during holidays or festive seasons. During these times, customers are already in the shopping mindset, and a compelling offer can make your brand stand out.
Retargeting Abandoned Cart Customers with Ads
One of the most significant losses for businesses, particularly in the retail sector, comes from customers who abandon their shopping carts. Consider a scenario where a customer visits your retail store, browses through products, adds a few items to their cart but leaves without completing the purchase. This scenario is all too common and represents a missed opportunity for your business. Research indicates that the global cart abandonment rate has now gone over 70%, posing a serious challenge for retailers.
But all is not lost. With a well-planned customer acquisition strategy, you can identify these customers and attract them to return and complete their purchases. One effective way to do this is through retargeting ads like Facebook ads and Google ads. These advertisements are personalized for customers who have previously visited your site or shown interest in your products. They also remind the customers of the items left in their cart and encourage them to return and complete the purchase.
Dynamic retargeting methods can be particularly effective when combined with an offer or discount that provides an additional incentive for the customer. Let’s consider some important aspects that make retargeting ads an essential part of your customer acquisition strategy:
- Personalized Shopping Experience: Retargeting ads can provide a personalized customer experience, showing customers products that they have shown interest in, which can enhance customer satisfaction.
- Customer Insights: These ads can provide valuable insights into consumer behavior and preferences, helping you refine your marketing strategies.
- Brand Consistency: Retargeting ads help maintain brand consistency across different platforms, reinforcing your brand image in customers’ minds.
- Increased Customer Lifetime Value: By bringing the buyers back to complete their purchases, retargeting ads can help increase the CLV.
Promote Upcoming Products on Your Site
Promoting upcoming products on your site is another powerful customer acquisition strategy. This method is focused on the process of creating a buzz around your new launches, building anticipation amongst your customers, and giving them a reason to return to your site.
Let’s consider that you are about to launch a new collection of apparel for your fashion retail store. By promoting this new collection via ads, you are informing customers about new products and creating excitement. Consumers, who are interested in the new collection, are likely to check your site regularly for updates, increasing the traffic and engagement on your platform.
This customer acquisition strategy serves the dual purpose of creating anticipation and capturing new leads. During the promotion, you can encourage your customers to sign up for priority notifications. This way, along with building anticipation, you are also creating a list of potential customers who have shown interest in your products.
There are several benefits of promoting new products available in your retail store:
- Brand Awareness: It familiarizes your customers with new products even before they are launched, making them more likely to purchase when the product becomes available.
- Customer Engagement: It provides an opportunity to engage with your customers, understand their expectations, and get their feedback about upcoming products.
- Market Analysis: This approach allows you to measure the market response to your upcoming product. It will help you make necessary adjustments to your product or marketing strategy.
- Brand Loyalty: By keeping customers informed about your new launches, you make them feel valued and involved, creating brand loyalt.
Membership Model
A membership model is a business strategy where customers pay a recurring fee to gain exclusive access to a product or service. This model is similar to a subscription model but focuses more on customer retention by offering exceptional privileges, premium access, and building online communities.
Let’s visualize a scenario where your fashion business offers a membership program for regular customers. You can offer the members benefits like early access to new collections, exclusive discounts, or free shipping. These perks can help you attract customers and encourage them to stay loyal to your platform.
There are several benefits that your retail business can gain from the membership model:
- Customer Loyalty: Memberships encourage customer loyalty by providing exclusive benefits that enhance the shopping experience.
- Predictable Revenue: Recurring membership fees can provide a steady stream of revenue for your business.
- Customer Retention: The exclusive benefits and sense of belonging offered through such programs encourage customers to stay with the brand.
- Brand Engagement: Membership programs can help increase engagement with your platform, as members are likely to interact regularly with the brand.
The benefits of a membership model extend far beyond financial gains. This method allows you to collect valuable data on customer preferences and purchasing behaviors across acquisition channels, which you can then use to plan targeted marketing strategies.
Build Your Retail Business with FCC
Flipkart Commerce Cloud (FCC) is a global enterprise intelligence solution provider for retailers. Built on Flipkart’s extensive knowledge of the eCommerce market and huge volumes of data from eCommerce events, FCC’s retail technology is scale-tested on billions of transactions.
FCC offers a suite of Artificial Intelligence (AI) and Machine Learning (ML) powered retail solutions to enhance your customer acquisition strategies. Here’s how FCC’s retail tech solutions can help your business:
- FCC Ads Manager: The platform allows you to monetize your online assets and diversify your retail revenue streams for greater profitability. It offers display ads, product contextual ads, and product listing ads, helping you reach your target audience effectively.
- FCC Pricing Manager: This solution automates your pricing decisions across marketing channels. It includes features like dynamic pricing, competitive intelligence, and price optimizer, ensuring you always offer the right price to your customers.
- FCC Selection Manager: This tool helps you compare and manage your assortments to optimize merchandise sales. It ensures that you always have the right products in your inventory to meet customer demand.
- Data Hygiene & Privacy: FCC ensures that your retail data is compatible with advanced tech architectures, ensuring easy transactions without compromising on data security.
Ready to transform your retail business? Let’s talk about your transformation and growth goals and explore how FCC can help you achieve retail success.
