10 proven methods for improving your customer acquisition strategy

By Jessie Torrisi|8 min read|Updated Feb 9, 2024

It can be difficult to attract new customers and grow your consumer base, especially when inflation is making every consumer more cost-sensitive.

Customer acquisition strategies like referral programs, cashback offers, online reviews, and many more can help B2C brands close new sales faster and achieve a higher ROI when weighing customer acquisition costs (CAC) against lifetime value (LTV).

Let’s explore 10 proven tactics to help you attract and convert a steady stream of new customers.

What is a customer acquisition strategy?

Customer acquisition describes the process of turning prospects into customers. A customer acquisition strategy persuades people who are considering your product to make their first purchase.

A successful customer acquisition strategy:

Attracts new leads
Creates a relationship between potential customers and your company
Moves people down the marketing funnel to convert them into paying customers
Minimizes the cost of attracting new customers compared to the value they generate for the company

The customer acquisition funnel focuses on activities that drive action. It targets consumers who are considering making a purchase.

How to improve your customer acquisition strategy

A successful customer acquisition requires a mix of both art and science. While there are many tactics and channels you can use to connect with consumers and introduce them to your products and services, it takes time and testing to discover which ones work best for your company and audiences.

Here are 10 proven customer acquisition techniques to help you refine your strategy.

1. Reap real ROI with referrals

Referral programs boast an impressive ROI. They’re one of the simplest ways to increase customer LTV.

People trust people more than they trust ads. That’s why a lot of companies offer big discounts, freebies, or $50 to $100 incentives when customers get a friend or family member to sign up.

One of most successful examples is PayPal’s referral program. The payment platform used customer referrals to drive 7 to 10% daily growth, catapulting their user base to over 100 million members. While PayPal spent tens of millions on $40 signup and referral bonuses the first year, they acquired 1 million users by March 2000 and 5 million by summer 2000. By 2015, the company reached a market cap of $46.6 billion — a 676% return on $60 million of spend.

Dropbox also drove strong ROI from its referral program. With referrals, Dropbox went from 100,000 to 4 million users in just 15 months. Instead of offering monetary rewards, the cloud storage company offered extra storage space to both referrers and referees, which reduced marketing operational spend. The company has maintained a 15% monthly growth rate for the first few years after launch, setting Dropbox on a course for a $10 billion valuation.

Build a better referral program: offer incentives over discounts

One Friendbuy study found that sending customers digital incentives in exchange for referrals is significantly more effective than offering discounts.

In their A/B test, offering people a $75 Amazon gift card led to 160% more customer referrals than giving people a $150 discount.

Not only did a broadly useful incentive drive a significantly higher number of referrals, but they were healthier for profit margins than a sizable discount. It may sound counterintuitive, but it’s indeed often the case that spending money on rewards has a better ROI than discounting. This is especially the case if you sell something infrequently purchased: if you’ve sold someone a mattress recently, chances are a discount on another mattress won’t mean much to them.

2. Cash in with cashback offers

Cashback offers are a very popular method for motivating customers to sign up for a new credit card.

But they’ve also proven successful as methods to convince prospects to take the plunge and try a brand new product, or switch over from a competitor.

There are multiple ways to approach cashback offers, also known as rebates. Companies can send recipients gift cards, coupons, and discount codes for money off future purchases, or cash-equivalent incentives like prepaid Visa cards, Venmo payouts, ACH transfers, and PayPal transfers.

When deciding which incentive to go with, consider this: in our 2023 study on cashback offers, we found customers made a clear distinction between which rewards they considered to be most valuable:

Cash was considered the most valuable
Next was Visa prepaid cards
Gift cards of the recipients’ choice were ranked third-most valuable
In-store credit was ranked least valuable, by a wide margin

So, when designing your cashback offer, it’s wise to get as close to cash as possible.

Case study: How a medical aesthetics disrupter took on Botox

When launching a competitor to Botox, a new medical aesthetics company offered first-time customers a $75 Visa prepaid card to try its new product. The cashback offer performed staggeringly well, catapulting the company to the #3 market share position in just 6 months.

Despite the product being new to the market and lacking the brand power of Botox, the company acquired 40,000 new customers in the first month after launch. Within 8 months, over 180,000 new customers tried their product.

As an added bonus, the company’s CAC to LTV ratio was low. Rather than contracting a pharmaceutical marketing agency to run their cashback program, they ran it in-house with the help of a marketing incentives platform.

Pharmaceutical marketing agencies recommended a $1 million ad campaign to launch the company’s new product. By using cashback incentives and word-of-mouth marketing, they were able to acquire new customers quickly and affordably, spending only the amount needed to send Visa cards to new customers.

3. Leverage the power of online reviews

Keeping your current customers happy helps you acquire new ones. Since 84% of people trust recommendations over marketing campaigns, it's worthwhile to invest time in increasing online reviews.

An important note: people are more likely to write reviews when they’re either delighted or disgruntled. People are simply less likely to review a product or service they’re not particularly passionate about.

Fortunately, there are a couple of ways you can solicit more reviews from people who are happy with your product, but closer to the middle of the spectrum rather than the extreme ends.

4. Simplify the review process

There are no surefire ways to increase online reviews, given customers ultimately need to elect to write them themselves. At present, little data exists about which method is best for soliciting online reviews.

However, there are a few things you can do to make customers more likely to give you a star rating of some kind.

Prompt and remind customers to leave reviews at the right time: A recent study suggests that there’s a sweet spot for when to ask for reviews, typically at least ten days. It depends on what you’re selling, though: consumers are willing to review common household goods sooner than they are an experience.
Make it easy: Use an email drip campaign that sends customers directly to a review funnel landing page. Include direct links to different review sites that plop customers right into a text box where they can write their thoughts.
Incentivize customers for leaving reviews: Offer a small incentive to customers to leave reviews, good or bad. Whether it’s a discount on a future purchase or a $15 digital incentive, it’ll encourage them to leave reviews for other products in your portfolio and create a positive association with your brand.

While it’s important to attract new customers and keep your CAC low, it’s a mistake to neglect the customers you already have. They’re a key part of your customer acquisition strategy.

5. Learn more about your customers

The better you understand who your ideal customers are, what they’re interested in, and what motivates them to take action, the better equipped you’ll be to find and effectively market to similar types of buyers.

A few ways you can take your knowledge of customers to the next level include:

Building customer personas that include details on key demographics, behaviors, preferences, and needs
Fielding customer surveys or external market research to better understand your key audience segments
Using customer insights to create lookalike audiences for advertising campaigns

6. Optimize your acquisition channels

Sometimes, customer acquisition efforts stall because your company isn’t tapping into the right acquisition channels — or you might need to tweak how you’re using existing channels. To create a channel optimization plan:

Start by gathering data and reviewing metrics on all of your key acquisition channels such as paid social, email, display, referral and influencer programs, and more.
Look at which channels are driving the most new sales and what the CAC is for each channel.
For channels with low sales or high CACs, dig deeper to understand what you’ve been doing. You may uncover places to refine your creative approach, messaging, targeting, personalization, and offers. If you feel like your approach has been on point, then you may decide to pull the plug on a channel altogether if it isn’t delivering consistent ROI.
Decide which channels you plan to continue with and adjust your budget allocation and resourcing accordingly.

7. Use real-time data to inform your decisions

When in doubt, data can help you make decisions about how to best appeal to your audience. Not sure which kinds of products to promote? Revisit your customer demographics and purchases to tailor your offers. Not sure which messages will resonate best? Use data to create more granular customer segments you can really personalize around. Unsure about which new market segments are worth going after? Run a few test campaigns against specific audiences to see which ones drive the best results.

8. Invest in a great user experience

A hyper-relevant advertising campaign and great products and services are only part of the equation when it comes to acquiring new customers. A poor e-commerce experience can have a huge impact on customer conversion rates. Confusing site designs, missing product details, slow page load times, and cumbersome checkout flows can lead to higher bounce rates, cart abandonment, and lost trust.

Look at your web and mobile analytics to understand where potential customers are dropping off, then invest in smoothing out those friction points. If you’re seeing substantial issues, you may want to invest in a formal shopping cart user test to improve your experience.

9. Consider co-marketing campaigns

Coke and Oreos. Scrub Daddy and Dunkin’ Donuts. Airbnb and Chargepoint. Creative collaborations are all the rage with CPG, retail, and entertainment brands these days — and it’s no wonder why.

Running a co-marketing campaign gives you access to a built-in audience of relevant buyers you may not be able to reach on your own. It also aligns your brand with another company that already has a loyal customer base, increasing awareness and building trust. And it gives you someone to share campaign costs with so you can get more for your investment.

10. Test, test, test

If there’s one thing we can take away from our universal experience of the internet, it’s that things change at superspeed. The Tiktok meme getting millions of shares today (very demure, very mindful) will become irrelevant within a matter of weeks. The hottest retail item (looking at you, Nike Shox) will become old news when the next wave of trends flows down from the runway. And the things your customers used to love (spin the wheel for 10% off) may not resonate with them the same way over time.

That’s why testing is critical to a healthy customer acquisition program. From paid ads to organic social, e-commerce pages to holiday promotions, and everything in between, testing can help you determine what resonates with your customer today.

A/B and multivariate testing can help you test different messages or offers with smaller audience segments before running a full campaign. Timing and frequency testing can help you determine when to connect with your customers to drive new purchases. And there are all kinds of tests you can run to optimize your ad creative, landing pages, e-commerce site, and more. It all starts with identifying what you want to learn or improve, and then picking the right test design in the right channels to get those insights.

Key takeaways

Getting in front of the right audience, getting their attention in a crowded digital landscape, and converting them into paying customers is becoming more and more difficult every year. Revisiting your customer acquisition playbook can help you get more out of what you’re already doing. By using personas, real-time insights, customer research, and testing, you can learn more about what your customers care about and what drives them to make purchases with your brand. Asking your customers to share reviews — and making it easy for them to share feedback — can accelerate your digital word-of-mouth marketing. And testing out new tactics like referral programs, cashback incentives, and co-marketing campaigns can help you reach and acquire new customers who stick with your brand for the long haul.