Customer Acquisition: Definition, Cost & Examples

Instructor: Tara Schofield

Tara has a PhD in Marketing & Management

Growing a business requires alerting potential customers to your products and services, building a new audience for your offerings, and closing the sale. By applying the principles in this lesson, you can learn how to implement customer acquisition actions to expand your company.

What is Customer Acquisition?

Customer acquisition is the process of taking a person from not knowing about your product or service to becoming a paying customer. Getting customers is a critical part of maintaining and growing your business. Customer acquisition should be a priority of the business, as it ensures that your business continues to grow.

Let's imagine you have just opened a small fitness center in a busy strip mall. You expected more customers to sign up during the first two months, but entering your third month of business, you find traffic to be slower than expected. You realize you need to focus on customer acquisition to make potential clients aware of your business, inform them of the benefits of joining your gym, and get them to sign up.

What are Customer Acquisition Costs?

There are typically costs associated with getting new customers. Customer acquisition costs are the expenses that are incurred in the process of gaining new clients. You may spend money on advertising, billboards, a website, marketing, research, or any other activities to grow the number of clients in your business.

You've decided to try a few new tactics to tell people about your fitness center. You decide to exhibit at the city farmers' market every Sunday. This gives you a chance to speak with health-conscious individuals who are buying fresh fruits and vegetables. The goal is to get new members to join your health club. The cost of having a booth is part of your acquisition costs.

At the same time, you offer gifts to your current members to bring in friends and family. Then when they bring guests, you give them a T-shirt, water bottle, or ankle weights. These items are costs related to acquiring new customers.

Finally, you offer two free sessions with one of the fitness trainers when people sign up during your third month of business. The cost of paying the trainers and promoting the offer are acquisition costs because they are incurred in the process of getting a new customer.

Examples of Customer Acquisition

Many marketing activities are targeted to customer acquisition. The goal is to make more people aware of the product or service, building the need of your offering to potential customers, and closing the sale. There are many ways that this can be done:

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