Tips & Guides — 21 Feb 2022
A Guide to User Acquisition
Today, businesses like yours are doing everything they can to grow. Ideally, you do every single thing to retain and promote the value of your existing customer base. However, a churn rate approaching zero is near impossible.
If you aren’t actively acquiring new customers, then your business model isn’t sustainable. Also, the harsh reality is that the cost of acquisition has been skyrocketing, with costs increasing as much as 60% during a six-year period.
What does this mean for you and your business? You might know how to build apps, but do you know how to acquire online users?
User acquisition, also known as UA, is when a potential customer takes the steps necessary to become a user of a product or service such as a mobile app or platform. It’s the process whereby lead generation moves to lead acquisition. In ecommerce, this is an essential step in the funnel.
This typically involves a user signing up for a free trial or freemium version of a product. In return, the company now has personal information and another channel for engagement with the consumer.
No matter how high your customer retention is, customers will always churn. Every and any business needs to continually acquire new customers. It’s becoming increasingly difficult because consumers are now more immune to traditional types of marketing.
Recently, Hubspot found that around two-thirds of consumers no longer trust company press releases, advertisements, or sponsored ads on social networks. They’re more likely to trust their friends and family’s advice when it comes to making a purchase.
By giving customers a way to try out your app or platform, you’re letting the product market itself. At the same time, you can collect valuable user data to improve the products and make them more appealing to your target audience.
There are two types of user acquisition, organic or paid. Which kind you decide to use depends on several factors that we’ll go through below.
Organic user acquisition can bring in your best value customers. This is because they’re likely to be a natural fit. They’ve directed themselves towards your website or landing page on their own accord and became a subscriber or user.
Acquiring users organically is great for startups because it’s low cost (although a little time-consuming). You’ll need a fully competent team of acquisition specialists and lots of patience. It’s all about getting it right and playing the long game.
Businesses can opt to acquire users by paying for ad placements with third-party marketers and agencies. You can expect to spend more money but also anticipate quicker results.
While it may seem that paying to acquire users can be less effective in the long run, this is not necessarily true. Most acquisition solutions will let you target your specific buyer personas with complete precision. Granular analysis can provide insight to increase ad performance or even discover new target audiences.
As with many marketing campaigns, a more diversified strategy can bring the best results. The best practices for organic acquisition can help to inform your paid acquisition strategy and vice versa. You’ll have more opportunities to generate and acquire leads.
Effective user acquisition rate starts with simple steps. No matter how obvious, it’s best to consider several key factors to shape and improve your user conversion rate.
Each acquisition channel has its pros and cons. The best solution for most businesses will be to combine several channels as part of a marketing strategy.
You can’t ignore social media. Well, not if you’re a fan of growth via digital word-of-mouth. Most social media campaigns start with Facebook, LinkedIn, Twitter, Instagram, and Snapchat. But there are also plenty of more niche options. Which channels you decide to use will most likely depend on where it is best to reach your target audience.
For instance, if you’re targeting decision-makers and marketing managers with your platform, LinkedIn is a must. But if you’re targeting 15-25 year-olds, then YouTube is where you can find approximately 77% of the intended audience.
Search engine optimization is priceless when it comes to gaining organic traffic and acquiring new users. It’s relatively easy and low cost to improve the profile of your website and move up the search engine results pages (SERPs).
There are tools out there like Yoast or Ahrefs that can help with curating your website, blog, and other forms of content marketing. Also, consider tools like App Radar and Mobile Action for keyword research and app store optimization (ASO).
Over time, as you create high-quality SEO and ASO content, more of your target users will be able to discover your product. or competitive industries, you may need to hire experts to get on the first page of the app store or Google rankings.
Pay-per-click advertising seems eternally built into the internet. This is because it’s a tried and tested method that gets results. Services like Google Ads and Facebook Ads will let you choose keywords to display target search ads.
This helps you get in front of new target users as well lets you A/B test your marketing and ad campaigns. You can also look to affiliate and partner marketing platforms like Affise for where you can customize incentives based on performances. Prices may vary but the good thing is that you only pay for results.
Influencer marketing is another form of paid acquisition that can be quick to get up and running. How much a post or video will cost depends on the influencer, their niche, and the number of followers they have.
Picking the right influencers to partner with can streamline the process of getting in front of your target audience. Sometimes, just giving a free subscription to the influencer can be used to get a social media or YouTube review that can generate quality leads.
Email might seem an outdated channel in the modern age of viral marketing, but email marketing is still one of the best ways for you to connect to your target audience.
Newsletters, promotions, teasers, and more can all be offered to those on your well-built email list. Just getting an email subscription moves the consumer from the awareness phase to the interest phase of the funnel.
No one wants buyer’s remorse. Instead, collect the right metrics and KPIs to track and improve your marketing efforts.
When you’re asking consumers to become users, you’re requesting them to take a specific action. That action is to download, install, and begin using your app, product, or service. Once a campaign begins, you’ll start to see more traffic and acquire more users.
Maximize the time and money spent on your customer acquisition strategy. To do this you’ll need to have a way to track specific conversion rates at each touchpoint.
A solution like Affise can help you track conversions, partner performance, and much more with analytics and Business Intelligence tools. This platform can integrate data from other channels and platforms like Appsflyer, GoogAds, and Facebook for Business. As you track the data in real-time, you will have access to 50 plus data breakdowns with fully customizable reporting.
Personalized messaging and retargeting mean more efficient campaign spending. Use an analytics tool to turn all of that tracking data into valuable insight and accurate attribution. How else will you know which areas are performing well and which areas need improvement?
The cost of customer acquisition, also known as customer acquisition cost (CAC), is a relatively simple metric that helps you track the performance of your campaign.
The CAC formula is quite simple to follow. You’ll need to consider things like software and platform costs for tracking campaigns, outsourced services, and any other types of overhead costs to paint an accurate picture.
Of course, CAC can only be given context by defining the variables for a set period. Keep in mind that this is where the numbers can get skewed. For instance, campaign costs for Q4 may have been paid for in Q1 and need to be attributed properly. Or in another example, evergreen SEO content may generate traffic and leads well beyond any set period and thus be undervalued.
Potential customers and users will be engaging with your content as they gradually move down the sales funnel. Recorded behavior can help you personalize your marketing and improve your campaign effectiveness. Track reviews, user ratings, subscription upgrades, and purchases. Your users can become your best customers, so help them guide you to what’s working and what’s not.
During an acquisition campaign, the percentage of users that convert into paying customers is known as the lead close rate. A successful acquisition campaign will bring in new users, but it should also be generating new customers for the business. The lead close rate can tell you a lot about the overall customer journey.
The ideal rate will depend on the business, industry, and buyer persona. But if the lead close rate is low, the issue is likely with your transactional conversion tactics. In this case, the available offering to free users may be poor or unusable for its intended purpose. And if the lead close rate is high, it likely means that you can widen the reach of your campaign.
Social media networks provide their own self-contained universe for consumer-brand engagement. If you want to implement these channels into your campaign properly, you will need to track several types of conversion data.
Use an app like Hootsuite and your analytics platforms to collect and collate data like click rate, shares, likes, and comments from each social media channel. Perhaps most importantly, track how many generated leads become users and ultimately customers. This will help you focus your social media marketing.
You need to track all interactions and recipient behavior from your email campaigns. Useful metrics like open rates, click-through rates, and purchases will all help you to adjust and improve your acquisition campaign. Use a tool like Mail Chimp to customize your data tracking needs.
Customer lifetime user value is also known as customer lifetime value (LTV). This metric is the average lifetime spend of each customer your marketing acquires. LTV varies widely depending on factors such as pricing, product life cycle, average order size, average purchase frequency, and customer referrals.
For example, an Amazon Prime subscription can carry a very large LTV as it incentivizes users to actually buy even more from the ecommerce giant. But an app for Christmas music will likely only be paid for during one month out of the year.
LTV is inversely affected by customer churn or attrition. If LTV is low, it may indicate that not enough is being done on the customer service/ success side of the business to retain a high number of customers. It may also indicate that the platform or customer experience needs improvement.
Nothing good comes easy. User acquisition comes with many modern challenges brought on with the digital age.
The black hat users of the internet are always looking to cash in on opportunities. Whether using a partner affiliate program or PPC campaign, there are a variety of methods for fraudsters to banish your marketing budget to the nether realm.
Don’t get caught out, use a platform like Affise that has click-level fraud prevention as the first line of defense. This tool reduces fraudulent traffic by filtering VPN, non-earmarked traffic from proxies, and bot traffic. It can detect all of this in real-time and block any malevolent connections to your website.
Using a fraud prevention tool will help to maximize your return on paid acquisition channels.
With so many advertising options available, it can be difficult for businesses to know which is best. It’s always a safe bet to start out with big names like Google and Facebook. But if you have a mobile game or app, it’s better to focus spending on mobile marketing services.
It’s best practice to do plenty of research before enlisting third-party advertising and affiliate marketing companies. Not every manager will be given the same size budget. That’s why it’s always important to optimize your ad spend for performance.
Managers that need to navigate global growth may require a lot more of everything. More ad spending, more targeted audiences, and more social media channels. You get the idea. This just means that building and implementing an acquisition campaign become more complicated.
It may be easy to delegate highly targeted campaigns for different audiences and/or geographic regions. This lets each team better optimize resources but still share data and strategy.
Attempting to significantly increase organic traffic can come with its own set of problems. If you are tasked with competing in a well-established industry, it can be nearly impossible to get to the first page of SERPs.
Or if you are already a well-trusted industry leader, you may find diminishing returns with any investment regarding organic traffic growth. These are the realities that must be accounted for before building a user acquisition strategy. Otherwise, stakeholders and team members will be set up with false expectations.
Market segmentation may come naturally as you begin the process of building your acquisition plan. But oftentimes, higher resolution segments like the RFM analysis above require lots of data. You need to first gain many users and paying customers before you can begin to parse your audience into smaller groups.
Practicality demands that most acquisition strategies allow for broader segments based on demographics, initially. Only as the campaign progresses and data starts pouring in can you hope to fine-tune segments with psychosocial and behavioral data.
In many ways, user acquisition is not much different than customer acquisition. It just takes place earlier in the customer journey. Acquiring users is also typically easier because it’s a smaller commitment.
For businesses offering apps, SaaS platforms, and other digital services, user acquisition is a necessary and key step of the process. With targeted messaging to entice consumers, you can let your product speak for itself.
Apps are all about the user experience. Build your acquisition campaign and watch the users begin pouring into your sales funnel. More leads equal more paying customers. More users also mean more opportunities to improve your service and increase customer lifetime value.
Written by
Kate Priestman is the Head of Marketing at Global App Testing, a trusted and leading end-to-end functional testing solution for QA challenges. Kate has over 8 years of experience in the field of marketing, helping brands achieve exceptional growth. She has extensive knowledge on brand development, lead and demand generation, and marketing strategy — driving business impact at its best.
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