Today we are going to discuss three customer acquisition strategies and three customer retention strategies.
We will also share a strategy that you can use for both customer acquisition and customer retention!
- Customer Acquisition vs. Customer Retention
- Customer Acquisition Strategy #1: Working for Free
- Customer Acquisition Strategy #2: Cold Email
- Customer Acquisition Strategy #3: Sales Funnels
- Customer Retention Strategy #1: Improve Your Product or Service
- Customer Retention Strategy #2: Create a Subscription Offer
- Customer Retention Strategy #3: Celebrate Customer Wins
- Bonus Customer Acquisition and Retention Strategy: Start a Weekly Email Newsletter
- Learn to Acquire Customers With Sales Funnels!
Customer Acquisition vs. Customer Retention
What is Customer Acquisition?
Customer acquisition is the process of converting people in your target audience into paying customers.
One way to go about it is to do it directly by pitching them your product or service right away. This is the traditional approach to doing business. While it can work, it’s quite outdated.
Another way to go about it is to convert them into leads first by persuading them to give you their contact details and only then convert them into paying customers. This is the modern approach to doing business that is much better suited to the digital age.
What is Customer Retention?
Customer retention is the process of retaining customers.
If your business model revolves around one-time payments, customer retention is about getting people to come back and buy from you again.
Meanwhile, if your business model revolves around subscriptions, customer retention is about reducing churn.
What is More Important: Customer Acquisition or Customer Retention?
They are both important.
If you don’t focus enough on customer acquisition, your revenue will start declining. Why?
Because customer churn is inevitable. While you should do your best to minimize it, it will always be there.
That means that you need to continue acquiring new customers if you want to maintain your current revenue.
And if you want to grow your business then you need to not only match but outpace churn with customer acquisition.
This is where customer retention comes in. The longer you can retain customers, the lower your churn rate will be, and the fewer new customers you will need to grow your business.
If you don’t focus enough on customer retention, you will find yourself in a situation where you have to continue expending inordinate amounts of time, energy, and money just to stay in the same place.
Not only is that not sustainable from the business perspective but it can also be extremely stressful and lead to burnout.
We recommend focusing primarily on customer acquisition in the beginning because when you are just starting out, your priority should be staying in business. Use the customer acquisition strategies that we are going to discuss in this article to keep the lights on.
Then, once you have stabilized the company’s finances, you should start allocating resources to customer retention. Make sure to implement the customer retention strategies that we are going to discuss in this article, especially customer retention strategy #1!
Customer Acquisition Strategy #1: Working for Free
This may seem weird but the best way to get customers when you are just starting out is to work for free.
Alex Hormozi advised doing that in his lecture to the University of Texas students.
He recommends starting a service business, offering that service for free until you are fully booked, and then pitching that same service at a fee to your existing customers.
At that point, you will have gained some experience, improved your service based on market feedback, and proven yourself to your customers.
In other words, you’ll be in a much better position to make your pitch than you would have been had you started charging right from the get-go.
If your customers are happy with the value that you have provided so far, they will probably be open to paying for your service.
And if they decline your offer, you can ask them for feedback. How can you make your service better so that it would be worth the price?
If they give you a specific suggestion, you can implement it and then come back to them and pitch your service again.
If they still aren’t interested, maybe they simply aren’t a match for your business. That’s okay. Move on.
In all likelihood, if you have built a full roster of clients doing free work, you should be able to convert a few of them into paying customers!
Customer Acquisition Strategy #2: Cold Email
Cold email can be a great way to get customers.
We recommend reading “The Cold Email Manifesto” by Alex Berman and following the approach outlined there.
It’s a super practical book that covers everything you need to know, from setting up your inbox to structuring your messages to tracking the performance of your cold email campaigns.
We also recommend following Alex Hormozi’s advice from the previously mentioned lecture at the University of Texas: commit to sending 100 cold emails a day for 100 days straight.
If you send 10,000 cold emails in three months, you will almost certainly get at least a few paying customers!
Customer Acquisition Strategy #3: Sales Funnels
Once you are sure that you have a product-market fit, you want to start automating customer acquisition. This is where sales funnels come in.
Sales funnels are systems designed to convert visitors into leads, leads into customers, and customers into repeat customers.
They can be either completely or partially automated, depending on your business model.
We believe that the best way to scale any business is this:
- Build a Value Ladder sales funnel
- Drive traffic to it with paid advertising
Optimizing your sales funnel might take some experimentation.
But once everything is streamlined, scaling becomes easy. All you need to do in order to increase sales is drive more traffic to your funnel. Simple!
Our co-founder Russell Brunson wrote a best-selling book called “Dot Com Secrets” in which he explains everything you need to know in order to grow your business with sales funnels.
It’s available on Amazon but you can get a copy directly from us for free. All we ask is that you cover the shipping!
Customer Retention Strategy #1: Improve Your Product or Service
The single best way to improve customer retention is to simply make your product or service better.
The exact details will depend on the offer in question but here’s what you should ask yourself:
- What problem is my product or service solving?
- What can be improved so that it would solve that problem more effectively?
Look for ways to help the customer do what they want to do easier, faster, and better.
In addition to that, you want to also improve customer experience. How can you make it more enjoyable?
If you have been running your business for a while, then you probably already have a pretty good idea of what can be improved.
In all likelihood, your customers have been telling you what they want since the beginning, but you haven’t gotten around to it yet.
This means that all you need to do now to make your product or service better is prioritize implementing the feedback that you have received so far!
Customer Retention Strategy #2: Create a Subscription Offer
If your business revolves around one-time payments, see if you can come up with a subscription offer to add recurring revenue.
Here are some ideas:
- If you are selling services, offer scheduled maintenance
- If you are selling physical products, offer scheduled deliveries
- If you are selling info products, offer a coaching package or a community membership
You can use these subscription offers as upsells and cross-sells and pitch them when the customer is about to pay for your core offer.
Customer Retention Strategy #3: Celebrate Customer Wins
People are buying your product or service because they want to solve a specific problem.
In other words, they want to get a specific result.
If you make it a point to celebrate it when a customer gets that result, the value that your product or service provides will be more likely to fully register in their minds.
And if they understand how valuable your product or service is, they will be more likely to continue doing business with you.
The exact details will depend on the offer in question but you want to find a way to draw their attention to the result that they got!
Bonus Customer Acquisition and Retention Strategy: Start a Weekly Email Newsletter
We recommend launching a weekly email newsletter. Why?
Because it will give you an excuse to reach out to your email subscribers every week and provide free value.
The easiest way to get started is the link roundup format. Simply share a few links to interesting content that relates to your niche. It can be blog posts, podcast episodes, videos, you name it. You can also include quotes from books!
Add a P.S. section to your newsletter and use it to promote your product or service. That way, you’ll provide value first, then have a promotional paragraph at the very end of each issue. It’s a good way to remind your subscribers about your offer without coming across as too salesy!
You also need to make sure that you send your newsletter on the same day and at the same time every week because that will help your subscribers develop a habit of reading it.
Here’s how Brian Dean, best known as the founder of the SEO blog Backlinko, explains it:
Having a weekly newsletter can help you convert leads into new customers and stay top of mind with existing customers.
In other words: it’s both a customer acquisition and customer retention strategy!
Learn to Acquire Customers With Sales Funnels!
Our co-founder Russell Brunson is widely recognized as one of the world’s top sales funnel experts.
He created the Value Ladder sales funnel which he then used to grow ClickFunnels from zero to $100M+ in annual revenue.
Since then, he has taught thousands upon thousands of people about sales funnels through his books, webinars, and live events.
If you want to learn how to use sales funnels to grow your business, we recommend starting with Russell’s book “DotCom Secrets”.
In this book, he explains the Value Ladder sales funnel in detail, goes over its most popular variations, and shares fundamental principles and strategies that can help you build a sales funnel that converts.
“DotCom Secrets” is available on Amazon but you can get a free copy directly from us. All we ask is that you cover the shipping!