Why do businesses need a customer acquisition model?

Businesses need a customer acquisition model to draw in new customers effectively.  In a world of marketing oversaturation, it’s particularly important to cut through the noise with targeted, relevant messages.

By improving targeting, acquisition modelling can also help boost response rates, conversions and customer value over time.  This can help you maximise the value of your marketing and sales spend.

Think of an acquisition model as a road map for marketing and customer communication.  Instead of sending mass messages and hoping they’ll reach the right prospective customers, you can focus on precise consumer groups and wring more value from each marketing dollar.

How does a customer acquisition model work?

Customer acquisition models work by calculating the value and longevity of past customers and using those insights to identify new prospects.  We use data from various sources – transaction records, demographics and behavioural information – to build profiles of the most valuable, longest-lasting customers.

Depending on your goals, an acquisition model can also be based on responses to past marketing campaigns.  By analysing response rates against marketing messages, we can find the most effective messages and maximise positive responses to future campaigns.  

This information feeds into a predictive model, which can be used to rank prospective consumers based on their similarity to previous customers or respondents.  This helps you and your team create an effective acquisition strategy and craft relevant marketing messages.

Customer acquisition is usually divided into three key stages: awareness, consideration and conversion.  Each stage represents an opportunity to connect with customers and nudge them toward a sale or sign-up.  Acquisition modelling can help you understand what’s happening at each stage so you can reach potential customers with relevant messages through the right channels.    

Awareness

Awareness is the first point of contact between your brand and a new potential customer.  The customer identifies a problem or need, starts looking for solutions, and comes across your business.  At this stage, you’re still aiming at target customers, but messaging is engaging and informative, not pushy or sales-focused.  

Consideration

During the consideration phase, customers take a step towards a purchase or sign-up.  An indicator of a customer entering this stage may be signing up for a free trial, returning to your website to search for a product, or filling in an enquiry form.

Conversion

This is where prospective customers become actual customers.  There’s no one definition for a conversion – it depends on your business structure and the product or service you’re selling.  Some businesses only count completed sales, others include adding products to cart or creating an account, and some base conversion rates on the number of customers signed up for a free subscription.

Whatever the process looks like in your business, modelling helps you focus your resources in the right places so you can bring in more customers and maximise the value of your spend.  It acts like a filter for incoming customers, helping you identify the best prospects and use the right messaging when you reach out to them.

Ready to explore the benefits of customer acquisition modelling?  Talk to the team at Datamine now.

The benefits of an effective customer acquisition model include more precise customer targeting, increased response and conversion rates, more high-value customers and an advantage over competitors in the acquisition battle.

Knowing the groups most likely to convert and deliver long-term value helps you target customers more accurately, with communications and channels that fit their profiles.  It also allows you to tailor offers and deals to specific customers or groups, which can boost conversions.

Thanks to precise targeting, acquisition models generally deliver double the response rate of a generic campaign.

Acquisition modelling can help you bring in more high-value customers, increasing revenue over time.

Focused, targeted campaigns can maximise the value of your marketing budget.

Relevant, personalised messaging can help you stand out in a crowded acquisition market.