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To run a successful startup you need customers.

Without customers you don’t make money, and without money…well you won’t last very long.

While it’s never been easier to setup a business, more than 90% of all startups end up failing.

Many of these will have a great product, team, an awesome blog and top-class customer support but they still end up falling short.


Because they simply couldn’t acquire enough customers.

Create a customer acquisition plan to avoid failing

Today there are more advertising mediums and people using the Internet than ever before, so why is it so hard for startups to acquire new customers?

Facebook alone has more than 30 million small businesses using its platform, with so much competition online the cost of running ads isn’t cheap. That’s not to say it’s an unscalable acquisition channel either, as thousands of businesses use it as part of their customer acquisition plan.

A really awesome blog post by CB Insights examined 146 startups that failed, by quickly skimming the article you’ll notice that many failed the because of a poorly executed customer acquisition strategy. As I said in the opening sentence, to be successful you need customers.

You want to be successful, right? Good, then here’s how you should setup your customer acquisition plan as a new startup.

1. Define your target market

The first step to creating a customer acquisition plan is to find your ideal customer(s). This doesn’t simply mean finding out how old they are, their gender, hobbies and interests, anyone and everyone is doing that.

Find out the mediums they use the most, the problems they face and what their motives are. Once you’re able to understand their motivations and goals, you’ll know how they think and the problems they are trying to solve. With this data you can craft landing pages, email and advertising copy addressing their problem and how you hold the solution.

Learn the problems they are facing and how they are trying to solve them, this will allow you to create an offer based on their needs, rather than simply guessing what they want. Keep in mind that not all your customers will have the same motives and problems, segmentation of your target market is critical if you have more than one buyer persona.

[Tweet “…segmentation of your market is critical if you have more than 1 buyer persona.”]

2. Establish your goals

Goals are not only useful to measure your performance but it points your team in the same direction working towards a linear goal. Goals can be monetary, activity based or data collection. Generally speaking, customer acquisition goals are typically:

  1. Lead generation
  2. Product/service inquiries
  3. Conversions
  4. Website traffic

Focus on 1 or 2 goals and set milestones and prioritize tasks for each one. For example, a milestone can be when your website receives 10,000 new website visitors whereas a priority can be spending 4 hours per week promoting content on social media.

Without goals and priorities it becomes much more difficult to track and monitor results, departments can separate from the overall objective, and as a direct result silos are created which can kill a startup before they even get their feet off the ground.

3. Physically draw your customer acquisition funnel

What does the customer buying journey look like for each of your customer groups?

Knowing this will help you understand all the processes they go through, how they think, where they start their search and at which point they hesitate or convert:


Recognizing each step allows you to identify any leaks in your acquisition funnel and how to tailor your message accordingly at each step. Don’t just guess what it will look like, grab some pen and paper and draw it out.

A FleishmanHillard report revealed that 89% of consumers do some kind of research online, knowing how your customers move will aid in your acquisition efforts as you’ll be able to intercept them at various points.

Do they use Google, visit specialized forums, listen to podcasts or social media? Gaining this data ensure your ad units are placed on the appropriate channels.

Chances are your startup will have several acquisition funnels based on each customer type, for example, if you decide to use SEO and Facebook, the messages and landing pages may differ and each funnel must be measured independently.

4. Create your hypothesis and test it

A customer acquisition plan should be based upon a hypothesis which is validated through testing. The best decisions are made on factual information, you will want to collect as much data on your target market from day 1.

Once you know that for every 1,000 unique visitors you generate 20 sales at $40-60 per sale, you’ll know how much traffic you need to bring in each month to hit your goals. Let’s say your average customer monthly spend is $55 and your goal is to hit $15,000 in revenue each month, this means you must generate 273 sales per month to hit your quota, which amounts to around 13,000 unique visits monthly.

Once you know your key business metrics, you have a better grasp at how much time you’ll need to spend on certain tasks, what your budget can allow for which goals are realistic to achieve and areas of your startup to scale.

As a startup chances are you don’t have much (if any) of your own data to use, start collecting as much secondary research as possible. Big Commerce estimate that the average conversion rate for online stores is somewhere around 2-3%, if you’re an ecommerce startup, use this as your starting point until you gain your own data.

GrooveHQ sell a SaaS tool and their trial-to-conversion rate is 11%:

If your startup offers a SaaS tool or free-trial, start with 11% conversion as a baseline for free-trial customers and adjust accordingly with data comes in.

Using this free ad-spend calculator is another useful tool to get some polarizing metrics for your startup.

Your metrics are going to be your hypothesis, this is what you expect the results to be if everything goes to plan. Don’t assume your ecommerce store will convert 3% of traffic right off the bat or that your free-trial will lead to 10% conversion of users into paying customers.

Every business has unique variables that lead to different results. This type of data is useful to give you a broad outline of what you should use as a benchmark until your own data comes in. Ultimately you’ll need to track everything from the start to get your own data as quickly as possible.

5. Monitor every aspect of your customer acquisition funnel

A successful customer acquisition strategy will measure all moving parts. Ideally you want to set this up in advance before any work is started so you don’t miss out on any data collection.

Most startups neglect this and start collecting data a few months in which can be very costly. Micro testing before your official launch is the best way to collect first-hand data on your customers. Send traffic to different landing pages, test email copies and make the adjustments off the results captured before you open the online doors.

Analytics tools

Google Analytics can catch most of your on-site goals. If you’re measuring opt-ins from specific URLs to your website, conversions, time spent on site, bounce rate, most profitable traffic sources, keywords, average cost per sale per referral URL or traffic source, Google Analytics can do it all.

Google Analytics is free but does offer limited functionality compared to the likes of Kissmetrics or Mixpanel should you need something a little more powerful.

What should you track?

Start with your goals which I talked about above, and measure your key metrics against your hypothesis to see how each step of your customer acquisition plan is performing.

Monitor each point of your acquisition plan, from the moment the prospect first views an online advert to the moment they place an order or refer-a-friend. Make sure to track all the AARRR at the very minimum.

Individual landing page and content pages

A simple color change or replacing a picture for a video can sometimes dramatically change your customer acquisition rate. Making random changes which aren’t based on data will see hours wasted with no positive results.

Various online tools allow you to measure every page on your website in a number of different ways. For example, if you notice a landing page has the average session duration of 4 seconds, it would mean either:

  1. You’re driving unqualified/weak leads to your landing page or;
  2. The copy isn’t convincing enough.

With this data you can start researching into how you bring traffic to your landing page and whether the copy is relevant to their needs. Heatmap tools such as CrazyEgg reveal which elements of a page users interact with, this could give you ideas on where to place your call-to-action or where to mention the value proposition.

Tracking how visitors interact with your website will allow you to quickly plug any leaks in your customer acquisition funnel. Hubspot revealed how one online business was monitoring their landing page and noticed an increase in conversion by 21% after changing the color of a button from green to red:

Their headline is using fear as the key motivator for taking action, and the color red is also known for promoting fear and urgency, which was the most probable cause of uplift. This is why testing every point of your acquisition funnel is critical, a 20% increase in sales is huge and often involves businesses spending thousands of dollars in advertising to achieve.

Before you run any tests, you must have evidence (data) that pages are performing poorly (high bounce rate) or that ad copies aren’t be engaged with (low click-through rate). Only when the data presents a problem should you dig deeper and go into testing, if you don’t then you won’t acquire enough customers as they’ll be falling out at every step of your funnel.

6. Email marketing

Typically most new startups will have zero brand power and recognition, this makes converting prospects into customers immediately extremely difficult and very, very expensive.

Obtaining their data and nurturing them via email and SMS marketing becomes a smarter proposition. You first objective as a startup is to segment prospects based on their needs, worries and want as mentioned earlier (defining different target markets).

For example, a prospect who is worried about the price of your product will need to be sent a different set of emails than someone who doesn’t care about price but rather your legitimacy as a startup.

To the first type of prospect sending emails showing all the benefits and problems your product can solve would be wise, while the second type of prospect may be sent testimonials, blog posts or success stories of others who used your product to social proof your startup.

This is just for prospects, once you convert them to customers, a whole new series of emails must be sent to up- and cross-sell products to maximize their customer life-time value.

A similar strategy must be created for action-based emails. For example, if your startup has a checkout and a prospect leaves before making converting (67% of shoppers abandon their carts online), sending behavioral based emails urging them to complete their order will convert lost customers and increase your bottom line.

The welcome email receives more opens than any other email type and should be used for more than just welcoming the prospect:


What’s the next step in your acquisition funnel after the prospect signs up to your newsletter? Is it for them to signup to your website? If so, tell them how to do so in your welcome email and the benefits for doing so.

Is the next step to buy a product? Then consider offering a time-sensitive voucher or offer to get them to convert straight away. Emails at every stage of your funnel need to be created based on your hypotheses and then adjusted once first-hand data starts flowing in showing how they respond.

7. Which traffic channels should you use?

There is no must-use traffic source, depending on your product/service and target market dictates which channels will be best for your startup.

A better question is how many channels should you use?

At least 3, more if you have the time and budget to manage them. Creating a startup and focusing on one traffic source is never a good idea and here’s why.

Let me introduce you to my friend Bob. Bob runs an ecommerce store selling laptops and 100% of website traffic comes from SEO. He has no social media presence and no email list, SEO has worked from him since the very beginning and didn’t see the need to diverse his customer acquisition plan.

Then one day Google decided to update their search algorithm and Bob’s website dropped several places for his main keywords and lost 85% of his traffic. Bob didn’t have a backup plan and with the loss of traffic his customer acquisition rate dropped by almost 100%.
Within a few months Bob’s business wasn’t making enough money and he was forced to close down.

Don’t make the same mistake as my imaginary friend Bob.

Never put all your eggs in one basket. You should have at least three traffic mediums which you should view like this:

  1. Your go-to channel – this is where you gain the most amount of traffic and customers. This medium will always be driving in new traffic, it’s reliable, has been scaled and brings in consistent numbers each month.
  2. The attention seeker – is your second most reliable traffic source. It’s not quite as good as your go-to channel but it tries its hardest each month to claim the number one spot. For whatever reason it cannot bring you as many customers as your go-to channel, but it’s always trying.
  3. Wildcard – is the experiment channel which you test out different strategies. The wildcard may be Instagram until you find you cannot generate leads profitable, the next month it may be SEO or AdWords. The Wildcard channel allows you to continually test different mediums until you find something that works.


Most startups don’t have more than two channels and never consider experimenting with a third. Instagram in 2015 recently launched ads and Snapchat and Periscope are planning the same in 2016. Jumping on new ad networks first with little competition can rapidly increase your startup’s acquisition growth because ads are relatively cheap to run to due to lack of competition.


Creating a well thought out customer acquisition strategy based on a solid hypothesis and running tests to validate them is how successful startups should view their customer acquisition plan.

As your startup begins to collect information, measure all meaningful data and continually adjust your hypotheses based on it.

From doing this you’ll quickly learn what works and what doesn’t, optimizing your customer acquisition plan to ensure your startup doesn’t get lumped in with the 90% of failed startups.

A customer acquisition is a dynamic entity that is continually changing based on testing and validation. Your acquisition strategy will change around your customers’ needs and in today’s business world they are changing faster than ever.

Confused on how to setup your customer acquisition strategy? Get in touch with us today to see how we can generate your business more leads and customers.

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Want to acquire more customers? Learn how our products and services can improve your lead generation, mobile, or e-commerce growth today.

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