Before we plunge into ways to get new customers, it’s a good idea to think about three very important concepts – your Unique Selling Proposition (USP), Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV, CLTV or LTV).
Unique Selling Proposition
Your Unique Selling Proposition is what differentiates you from your competition, by pointing out exactly what your business offers that the other guys do not.
Here’s a great article by Greg Ciotti about developing a USP: 5 Ways to Develop a Unique Selling Proposition
Customer Acquisition Cost
The cost of acquiring a customer is calculated by taking your entire cost of sales and marketing over a given period, including overheads and salaries, and dividing it by the number of new customers that you acquired in that period.
Venture capitalist David Skok wrote an excellent article on the subject: Startup Killer: the Cost of Customer Acquisition
Customer Lifetime Value
Customer lifetime value can be defined as the value of a customer relationship, based on the present value of the projected future cash flows from the customer relationship.
Tommy Walker leaves no stone unturned in his article, How To Calculate & Increase Customer Lifetime Value
Now that you (hopefully) understand some of the concepts and metrics around customer acquisition, we can turn to some methods of getting new customers.
How To Get More New Customers
There are basically two ways to get new customers. I like to refer to them as ‘paid’ and ‘unpaid’.
Paid methods are generally the quickest ways to get customers. These include advertising of all kinds – TV, radio, billboards, direct mail, print media and online. If you have the budget, you should be testing as many of these as make sense for your business.
Unpaid methods are methods where there is no direct cost involved. These might include blogging, social media marketing, public relations and search engine optimization.
If you have the fortitude to consistently write one new blog post every week, and promote each post to your social network, there is a good chance that you will build an audience and start being able to sell to them within 6 months to a year.
Although there may be no out-of-pocket expense, many of these methods are quite time-consuming, and may require some technical knowledge.
Actually, technical knowledge is quite handy for some of the paid methods as well. Although most of the information is available on the Internet, it takes time to find the best and most up-to-date information – time which might be better spent helping your customers.
Although advertising companies like Google and Facebook have tried to make their systems simpler for business people to understand and use, the huge number of variables involved in setting up a simple advertising campaign make it quite a challenge.
Here’s an example. I searched for ‘florists cape town’ and these were the Adwords ads at the top of the page:
You’ll notice that the NetFlorist ad has 5 lines of text, while the other two have 3 lines. This is because NetFlorist (or whoever set up their ads) knows about Ad Extensions.
Ad Extensions are enhancements to the basic Adwords ads.
The line marked ‘1’ shows a Phone Extension – the Henry Williams ad uses this as well.
The line marked ‘2’ in the image is a Callout Extension; the line marked ‘3’ is a Sitelinks Extension.
All of these extensions are available – at no extra cost – to anyone using the Adwords platform. They have the effect of increasing the amount of ‘real estate’ your ad takes up on the screen, which usually results in more clicks on your ad. More clicks on your ad means that Google charges less per click, which increases the ROI of your campaign.
Why would an advertiser not make use of these free and extremely beneficial enhancements? The only reason I can think of is ignorance.
It’s quite possible that the increased revenue from better-performing ads would cover the cost of an experienced Adwords Manager.
And this is just one example – there are dozens of seemingly-insignificant ‘traps for the unwary’ in both Adwords and Facebook Ads.