The Complete Guide To Customer Acquisition With Marketing

Wondering what is the best way to acquire customers for your business?

Today we will go over the basics of customer acquisition, share the sales funnel that we used to grow our company to $100M+ in annual revenue, and discuss various marketing strategies that you can use to generate traffic.

Here’s our complete guide to customer acquisition with marketing…

Introduction to Customer Acquisition

Let’s start with the basics of customer acquisition. Here’s what you need to know…

What Is Customer Acquisition?

Customer acquisition is the process of converting people who belong to your target audience into paying customers.

You can do that either by converting potential customers into paying customers directly or by converting potential customers into leads and then converting those leads into paying customers.

The latter approach is typically more effective, which is why we are going to focus on it in this article.

Customer Acquisition Cost (CAC)

Customer acquisition cost (CAC) is the most important customer acquisition metric. It shows you how much money, on average, it costs you to acquire a new customer.

It’s calculated using this formula:

Customer Acquisition Cost = Cost of Marketing + Cost of Sales / The Number of New Customers Acquired

It’s impossible to design a sustainable customer acquisition strategy without knowing your CAC, so make sure to calculate it if you haven’t done so already!

Customer Lifetime Value (CLV)

Customer lifetime value (CLV) is the second most important customer acquisition metric. It shows how much money the average customer spends on your products and services throughout their entire lifetime as a customer. 

There are several ways to calculate it depending on your business model but the simplest one is this:

Customer Lifetime Value = Average Annual Revenue Per Customer x Average Length of a Customer Relationship in Years

Here’s another formula:

Customer Lifetime Value = Average Order Value x Average Number of Purchases Per Year Per Customer x Average Length of a Customer Relationship In Years

And here’s a simple CLV formula for SaaS businesses that can also be used for other subscription-based business models (paid newsletters, membership communities, etc.).

CLV = Average Revenue Per Account (ARPA) / Revenue Churn Rate %

This advanced CLV formula for SaaS businesses can also be used for other subscription-based business models:

CLV = Average Revenue Per Account (ARPA) x Gross Margin %/ Revenue Churn Rate %

Note that if you use the same ARPA and churn rate in the simple SaaS CLV formula and the advanced SaaS CLV formula, you’ll get different CLV numbers once you account for the gross margin in the latter formula.

Your CLV is the primary limiting factor when it comes to CAC: your CAC cannot be higher than your CLV if you want to generate profit.

Consequently, it’s impossible to design a sustainable customer acquisition strategy without knowing your CLV. So make sure to calculate it as accurately as possible!

“Whoever Can Spend the Most to Acquire a Customer Wins”

Our co-founder Russel Brunson often quotes Dan Kennedy on customer acquisition:

“Whoever can spend the most to acquire a customer wins”

This idea was extremely influential in Russel’s entrepreneurial journey so he was super excited when he got the opportunity to discuss it with Kennedy himself:

At first glance, intentionally increasing your CAC may seem counterintuitive, but the reasoning behind it makes perfect sense when you think about it:

Outspending your rivals on customer acquisition enables you to grow FAST. It can help you carve out a market share for yourself, build a strong brand, and become one of the main players in your niche. 

But how can you implement this strategy as a bootstrapper who can’t subsidize growth by burning investor money?

Simple: you need to first maximize your CLV so that you can then increase your CAC. 

That way, you’ll be able to outspend your competition on customer acquisition while still generating profit, which is the key to growing your business in a sustainable manner!

Don’t Make This Customer Acquisition Mistake!

We would argue that the most common customer acquisition mistake that entrepreneurs make is driving traffic directly to their company websites or their sales pages.

The problem with this is that it’s the online equivalent of walking up to a complete stranger and saying “Yo, here’s my product, now buy it!”. 

They don’t know you, they don’t trust you, and they haven’t had the time to do their research. So why would you expect them to buy from you??

Consider your own consumer behavior:

When was the last time you saw some random ad, clicked on it, and bought that product then and there?

We have all made impulse purchases in the past but if you are like most people, you probably primarily buy from brands that you trust.

That’s why if you want to build a sustainable business, your primary focus should be earning the trust of your dream customers. But how can you do that?

This is where the Value Ladder sales funnel comes in…

The Best Way to Acquire Customers Online

We believe that the most effective way to sell anything online is the Value Ladder sales funnel.

It was created by our co-founder Russel who then used it to take ClickFunnels from zero to $10M+ in annual revenue in just one year (it’s at $100M+ now!).

This sales funnel has four stages:

• Bait. You offer the potential customer your lead magnet in exchange for their email address.
• Frontend. You offer the potential customer your least expensive and least valuable product or service.
• Middle. You offer the customer a more expensive and more valuable product or service.
• Backend. You offer the customer your most expensive and most valuable product or service.

Ideally, you also offer a continuity program of some sort, meaning, a subscription product that generates recurring revenue. 
We also recommend adding downsells, upsells, and cross-sells to these core offers in order to maximize your revenue.

So the main idea here is this:

Instead of driving traffic directly to your website or sales page, you drive it to your lead magnet landing page and convert those visitors into email subscribers.

Then, once you have their email addresses, you pitch your products and services to them via email and drive traffic from your email list to your sales pages.

The reason why this sales funnel works so well is that it allows you to:

1. Start the relationship with that person by offering free value.
2. Nurture that relationship by continuing to provide free value via email.
3. Build trust by providing progressively more paid value at each stage.

Here’s how Russell explains it:

You are probably leaving a lot of money on the table if you haven’t built a Value Ladder sales funnel for your business yet.

It’s the single best thing that you can do when it comes to customer acquisition!

How to Build a Value Ladder Sales Funnel For Your Business

We understand that the Value Ladder graph above may seem overwhelming. 

But you don’t need to have all four core offers + downsells, upsells, and cross-sells to get started.

You can create a simple Value Ladder sales funnel with just a lead magnet and frontend offer.

Here’s how:

Step #1: Create a Super Valuable Lead Magnet

A lead magnet is a freebie that you offer to the potential customer in exchange for their email address.

It can be anything that they can either download to their device or access online:

• A report.
• An ebook.
• A video class.
• A video course.
• An email course.
• A webinar.

…etc.

What’s important is that your lead magnet provides an effective solution to a problem that the potential customer is struggling with.

That problem should either be the same one or related to the problem that your frontend offer addresses.

Ideally, you want your lead magnet to not only serve as bait but to also set the stage for your upcoming frontend offer pitch.

There are several ways to create a seamless progression from your lead magnet to your frontend offer:

Give Them a Free Sample of Your Frontend Offer

You can have a lead magnet that serves as a free sample of your frontend offer.

Authors do this all the time. They use the first chapter of their book as their lead magnet and the book itself as their frontend offer. This approach can work well for all kinds of info products, not just books.

Also, your “free sample” doesn’t necessarily have to be an excerpt from your frontend product, what matters is that it gives the potential customer a taste of the value that they can expect from it. 

Say, you can create a free webinar where you address a specific problem (e.g. how to optimize your dating profile), then pitch an info product that has a broader scope (e.g. an online course on how to use dating apps to find love).

Teach Them How To Do Something, Then Offer To Do It for Them

You can have a lead magnet that provides a solution to a problem, then pitch a service where you solve that problem for them.

This might seem counterintuitive: why would someone pay you to do something when you just taught them how they can do it themselves?

But the reality is that people are busy, overwhelmed, and lazy. If they can afford to pay someone to do something for them, they will probably choose that over doing it themselves.

This approach can work well for selling all kinds of services but it tends to be especially effective for services that handle what people see as tedious chores (e.g. accounting).

Provide a Solution to a Problem, Then Help Them Implement It

You can have a lead magnet that provides a solution to a problem, then pitch a service or a tool that can help them implement that solution.

This can work well for selling consulting, coaching, and software. In fact, this is what we do: we teach people how to grow their businesses with sales funnels, then pitch them our funnel building software!

Step #2: Create a Landing Page for Your Lead Magnet

You also need a landing page for your lead magnet.

This is where you will be driving traffic with the marketing strategies that we are going to discuss later in this article.

A squeeze page, which is the most basic type of landing page characterized by being just one screen long, is probably your best bet.

We recommend using a proven, high-converting squeeze page template instead of designing it from scratch.

Our software, ClickFunnels, includes a template library that features landing page templates for all of the most common use cases. You will surely find a suitable squeeze page template there!

Step #3: Create an Irresistible Frontend Offer

In theory, you can use an existing product or service as your frontend offer.

In practice, though, you will almost certainly get better results if you create a new product designed specifically for the purpose of converting leads into paying customers.

Here are three tips that can help you create an irresistible frontend offer:

1. Make it digital. This applies regardless of whether you sell services, digital products, or physical products. Ebooks, video classes, and video courses are all great frontend product formats.
2. Price it at $7. This price point is not low enough to make the potential customer question the quality of your frontend product but also not high enough to make them stop and think twice before buying.
3. Remove all financial risk by providing an unconditional, no-questions-asked 30-day money-back guarantee. This ensures that the potential customer doesn’t have anything to lose by checking out your frontend product. Worst-case scenario, they will simply get a refund.

We also suggest watching this video:

Step #4: Create a Sales Page for Your Frontend Offer

You also need a sales page for your frontend offer. This is where you will be driving traffic to from your email list.

We recommend using one of our sales page templates from the ClickFunnels template library.

Here are some of the sales page copywriting basics that you need to get right if you want your sales page to convert:

• Headline. Your headline should convey the value of your frontend offer. How will it help the potential customer? Lead with that.
• Body copy. Appeal to the emotional buyers first with emotion-driven copy, then to the logical buyers with benefit-driven copy, and finally to the fearful buyers with scarcity-driven copy.
• Social proof. Provide as much social proof as you can in the form of customer testimonials, endorsements from well-known people, and “As Seen On” media badges.
• Call to action. Use an offer-specific call-to-action button copy (e.g. “YES! I Want [Your Frontend Offer]”) instead of generic copy (e.g. “Buy Now”).
• 30-day money-back guarantee. Make sure that your money-back guarantee is explained clearly and is featured prominently next to the call-to-action button. It should be impossible to miss!

There’s much more to sales page copywriting than that but unfortunately, we can’t adequately cover this subject in this article due to space limitations.

But if you want to learn how to write copy that converts, we highly recommend our friend Jim Edwards’ book “Copywriting Secrets”. 

You can get it for FREE. All Jim asks is that you cover the shipping!

Get “Copywriting Secrets” for FREE!

Step #5: Create a 6-Email Welcome Sequence

Don’t hit the potential customer with a sales pitch the moment you get their email address. You haven’t built enough trust yet!

Send them this six-email welcome sequence instead:

• Email #1: Who Are You? Introduce yourself to the new subscriber.
• Email #2: Where Did You Come From? Share your origin story. How did you come to do what you do now?
• Email #3: What Do You Do? Explain in more detail what it is that you do.
• Email #4: How Did You Gain This Expertise? Explain what makes you qualified to do what you do. Share relevant experience, credentials, and accomplishments.
• Email #5: Who Do You Do This For? Explain who are your dream customers + share a case study on how you helped such a person get the results that they wanted.
• Email #6: How Can You Do It For Me? Pitch your frontend offer and provide a link to its sales page.

The email frequency should be one email per day so that the entire sequence would take six days to complete.

Note that this email sequence can work well for both personal and company brands. In the latter case, instead of talking about yourself, talk about your company. Simple!

How to Drive Traffic to Your Value Ladder Sales Funnel

Okay, so now that your sales funnel is all set up and ready to go, it’s time to start driving traffic to it.

Here are five proven marketing strategies that you can use to promote your lead magnet:

Social Media Marketing

Social media marketing is the most accessible marketing strategy because the entry barrier is extremely low.

While every social media platform has its own peculiarities, the general process of building a following remains the same across the board:

1. Create a content schedule that you can keep up with indefinitely.
2. Commit to that content schedule and adhere to it religiously. You can produce content in batches and then use social media scheduling tools like Buffer or MeetEdgar to schedule and publish it.
3. Ensure that each and every piece of content that you publish provides value to your followers.
4. Use your social media to promote your lead magnet but don’t be obnoxious about it. Providing value to your followers should be the main focus.
5. Interact with your followers. Ideally, you want to respond to each comment, tweet, and reply that you get.

It will probably take you at least 12-18 months to reach “escape velocity” where the growth of your social media following starts gaining momentum.

Search Engine Optimization (SEO)

Search engine optimization, also known as SEO, is another accessible marketing strategy with a low entry barrier.

Here’s a quick overview of the process:

1. Do keyword research to identify a promising keyword.
2. Do competitive research to see what’s currently ranking on the first page of Google for that keyword.
3. Create a piece of SEO content that targets that keyword and is better than everything that’s currently ranking on the first page of Google for it.
4. Build as many backlinks to that piece of content as you can. Backlinks let Google know that your content is legit.
5. Promote your lead magnet on that page with an opt-in box at the bottom of the article and an exit-intent pop-up.

It will probably take you at least 12-18 months to reach the point where you start getting a decent amount of traffic from Google. 

YouTube Marketing

YouTube marketing has a higher entry barrier because you need to either produce videos yourself or pay someone to do it for you.

Consequently, this marketing strategy is best suited for those who already have filming equipment and video production skills and feel comfortable in front of a camera.

Making cool videos isn’t enough to succeed on YouTube, though. Every video you make should target a specific keyword that your dream customers might be searching for. 

Here’s a quick overview of the process:

1. Pick a promising keyword. Type in a general search term into YouTube’s search and look at the search suggestions that come up. These suggestions are popular keywords that people are searching for.
2. Do competitor research. Watch the videos that are currently ranking for that keyword. Read the comments. Figure out what’s missing.
3. Make a video that is better than everything that is currently ranking for that keyword. End it with a call to action encouraging the viewers to go and get your lead magnet.
4. Optimize your video description and video tags. This might seem boring but it’s important.
5. Come up with a compelling title for your video. It should mention the target keyword, explain what the video is about, and pique curiosity.
6. Create an attention-grabbing thumbnail for your video. Ideally, you want all your thumbnails to have the same aesthetic so that your subscribers would immediately recognize your videos in their subscription feeds.
7. Upload your video, promote it on your social media, and engage with the viewers in the comments.

YouTube’s algorithm appears to favor creators who upload frequently and consistently so if you are serious about succeeding on this platform, commit to making 1-2 videos per week.

It will probably take you at least 12-18 months to reach a point where your YouTube channel starts gaining momentum.

TikTok Marketing

TikTok is a wild platform known for it’s virality potential. So why not repurpose your YouTube videos into shorts and upload them to TikTok?

Maybe it won’t amount to much. Maybe you’ll end up going viral. Who knows. But if you are making videos anyway, then you don’t have anything to lose by repurposing that content.

Paid Advertising

We would argue that paid advertising is the best way to drive traffic to your sales funnel. Why?

Because paid traffic is:

• Immediate. You can put your lead magnet in front of your target audience and get immediate market feedback. Are people giving you their email addresses?
• Targeted. You can zero in on your dream customers in a way that isn’t possible with the other marketing strategies we discussed.
• Scalable. You can scale your ad campaign in a controlled manner whenever you are ready to do so.

All major social media platforms allow you to run ads on them.

Pick the one that makes the most sense for your business, create an ad campaign designed to promote your lead magnet, and start running it with a small daily budget.

Once you figure out how to run ads profitably, you can begin scaling your ad campaign by gradually increasing its daily budget.

Build Your First Sales Funnel In Just Five Days!

Let’s keep it real:

Building a sales funnel from scratch can seem like a daunting task.

That’s why we created our 5 Day Lead Challenge where Russel walks you through it step-by-step.

You will:

• Create your first lead magnet.
• Build your first sales funnel.
• Set up a six-email welcome sequence.

…and launch your funnel in just five days!

So don’t hesitate. Take action now. It can change your life!

Join Our 5 Day Lead Challenge Today!

P.S. This challenge is completely free!