A customer acquisition channel is where you “meet” your customers for the first time, whether that’s at a trade show, on social media or through an organic search. Customer acquisition channels are the sources through which you bring in customers.
While all SaaS companies can leverage the same customer acquisition channels, which ones will be most effective depends on your buyer personas. You need to know where your personas spend their time in order to understand how to reach them.
For example, a tutoring software targeting teenagers might be successful creating paid and organic content for TikTok, but a customer engagement platform that targets B2B executives might have more success advertising on Forbes or Harvard Business Review.
Customer acquisition can occur both on and offline, and the channels you can leverage include:
- Organic search
- Direct traffic
- Email marketing
- Paid search
- Social media
- Paid social
- Word-of-mouth marketing
- Direct mail
- Cold outreach
You need to invest in some of those channels at a baseline level in order to maintain your brand. For example, even if you don’t drive a lot of business from social media, platforms liked Facebook and LinkedIn are used to research companies, so not having a presence is suspicious.
But, when determining where to invest for acquisition, focus on the areas you think will have the biggest impact. For instance, if you don’t think you’ll generate customers from direct mail, you should spend time and money creating materials to send out through that channel.
How to Find Your Customer Acquisition Channels
The best way to determine which customer acquisition channels will be most effective for you is to run an experiment.
Develop a hypothesis about which channels will have the biggest impact and the best ROI and then use them to run campaigns. It’s important to measure their performance throughout your experiment so you can adjust how you’re allocating resources based on what you’re learning about different channels.
In order to draw accurate conclusions from your experiment, you have to let it run long enough to see conclusive results and not make changes prematurely. Unless you’re seeing dramatic issues from leveraging a channel, it’s better to give your campaigns an opportunity to succeed and reach a large enough sample size.
Attributing Revenue to Different Channels
The metrics for success can vary channel to channel, especially if they’re being leveraged for different stages in the buyer’s journey. If your overall goal is customer acquisition, getting first touches matters, but so do the middle touches that help nurture prospects toward becoming a customer. To best understand which channels are contributing to your customer acquisition, you need to look at the insights from multiple revenue attribution models.
First-touch models emphasize the original customer acquisition channel. Meanwhile, a linear multi-touch model gives equal credit to every single touchpoint. Additionally, there are other multi-touch models, like the full path model, that take all touchpoints into account but weight some interactions heavier than others.
If you only use one model, you can miss the impact of some channels.
Since first-touch models give so much credit to that initial source, some people are hesitant to use them, but it’s a valuable insight to have when looking at customer acquisition channels since you’re looking to understand how your marketing efforts are attracting leads.
To use a first-touch attribution model, you need to be able to track which channel someone came from originally. Most website analytics tools will track source channel and you can integrate them with your CRM so that information is recorded automatically. As long as you have that information for every contact, when they close as a customer, you’ll be able to attribute the revenue from that deal to the original source channel.
Multi-touch models help you also understand how channels come into play throughout the duration of the buyer’s journey. So, if a prospect comes from organic search originally but also interacts with social media and email, all those channels get credit.
There are numerous platforms that can help you do multi-touch revenue attribution. HubSpot, for example, has revenue attribution reports that allow you to analyze your acquisition through different models and compare them.
Once you have all of the attribution data, determine which channels produce the highest ROI and which generate the most revenue. It’s important to take both those considerations into account because if your top revenue-generating channel is also your most expensive to leverage, it might not be cost-effective. So while you won’t necessarily want to abandon that channel, you should focus on investing more in some of your channels that have better ROI.
Based on the revenue generation and ROI of each channel, figure out which should be invested in further and which should just get the bare minimum. If your experiment shows that events are driving large amounts of revenue for your company and have great ROI, it might be worth hiring people to specifically focus on event marketing. Meanwhile, if you’re not seeing a ton of traction from paid search, it might be best to not invest in that channel.
You should probably experiment with most customer acquisition channels at some point as your company grows.
When you get an opportunity to invest in a new channel, consider your growth goals. In order to change your growth projection, you either need to increase your investment in your current channels or expand your efforts into new channels. If you don’t think you’ll be able to increase the results from your existing channels, then that’s a good reason to experiment with the channels you’re not currently using and diversify your marketing efforts.
This post was originally published August 6, 2015.
Guido is Head of Product and Growth Strategy for New Breed. He specializes in running in-depth demand generation programs internally while assisting account managers in running them for our clients.