How to identify the right customer acquisition channels

Customer acquisition channels are the various pathways that businesses use to attract and convert potential customers into paying clients. Choosing the right combination of channels is crucial for success, but with so many options available, it can sometimes seem overwhelming. 

In this article, we’ll define customer acquisition channels, explore a wide range of potential channels, and provide tips for discovering the winning combination that will unlock growth for your business.

What Are Customer Acquisition Channels? 

Acquisition channels refer to the marketing channels that lead to conversions. Although businesses can operate on multiple channels, the acquisition channel is the last one that results in a client conversion, regardless of any other interactions they may have had with the business during their customer journey.

There is no fixed number of customer acquisition channels, as they can be very broad (like social media) or quite specific (like a particular niche review site). A successful sales and marketing strategy identifies the most advantageous channels for a particular business model. Often, it involves calculating the time and money spent developing the channel vs the conversion rate and revenue generated.

Here’s a ranking of customer acquisition channels in popularity and overall usage. Keep in mind popularity can shift slightly between B2B and B2C businesses and can also depend on your business industry:

Tier 1 (Most Popular, Highest Usage)

• Social media (organic presence and content strategy)
• Email marketing
• Organic search and search engine optimization (SEO)
• Content marketing (blogging, infographics, video, etc.)

Tier 2 (Very Common, Moderate-to-High Usage)

• PPC – online display advertising
• Social media advertising
• Affiliate programs and referral schemes
• Business partnerships and co-marketing
• Live events and tradeshows (may be industry-specific)

Tier 3 (Somewhat Common, Niche & Selective Usage)

• Influencer campaigns and celebrity endorsements (depend on audience, budget)
• Review sites (great for industries with reputation-driven buying)
• Paid video advertising
• Podcast collaborations and advertising (growing but targeted)
• Community building, sponsorship, and charity work (Indirect acquisition, more about brand-building)

Tier 4 (Less Common, Specific Business Models)

• Online forums (great for niche communities)
• Cold calling and sales outreach (still used, but more B2B focus)
• Direct mail and flyer drops (can be targeted but have higher costs)

As the digital revolution continues, acquiring new customers is getting harder and harder. Companies have to make difficult choices about where to spend their time and resources to get the best results because there are so many channels and technologies to choose from.

How to Choose the right channel(s)?

Choosing the right customer acquisition channels requires a strategic approach that considers several factors. Here’s a breakdown of the process:

1. Know your ideal customer:

– Demographics: consider age, gender, location, income level, and occupation.

– Interests and pain points: what problems do they face? What are they passionate about?

– Online behaviour: which social platforms do they use? What websites do they visit? How do they find information or solutions?

2. Analyze your goals and budget:

– Business goals: what are your primary objectives – sales, leads, brand awareness?

– Budget: how much can you realistically invest in customer acquisition?

– Desired ROI: what kind of return on investment do you expect from each channel?

3. Evaluate and match channels:

– Channel alignment: does the channel fit your target audience, content type, and business goals? For example, Instagram is great for visual content with a younger audience, while LinkedIn is better for B2B lead generation.

– Cost-effectiveness: assess the costs involved with each channel (both direct and indirect) and weigh them against potential returns.

– Scalability: can the channel grow alongside your business? Consider long-term potential.

4. Consider organic vs. paid:

– Organic channels build on free tactics like SEO, social media engagement, and content marketing. They often take longer to show results but provide ongoing value.

– Paid channels: PPC advertising, sponsored social posts, influencer marketing, etc. These can help you gain faster visibility but require continuous investment.

5. Mix, measure, and optimize:

• Start with a Few: Don’t overwhelm yourself. Begin with a small selection of channels that seem like solid fits.
• Tracking and Analytics: Utilize analytics tools to track key metrics like website traffic, conversion rates, and cost per acquisition for each channel.
• Adjust and Pivot: Regularly review your performance and adjust your strategy accordingly. Double down on what’s working, and phase out less effective channels.

Additional Tips

• Experiment: Feel free to try new channels and tactics, but do so in a calculated way with measured testing.
• Competitive Analysis: See what’s working for your competitors, but remember what best suits your unique business.
• Don’t Overlook Word-of-Mouth: Encourage happy customers to become brand advocates by providing referrals and positive reviews.

It’s essential to remember that customer acquisition is a continuous process, and what works today might need adjustments tomorrow. Remain flexible, monitor your results, and refine your strategy for long-term success.

How we do it 

Acquisition Channel has developed our reporting technology to help businesses and marketing teams break down the activities and events feeding each channel to assess the cost involved fully, plus the time and difficulty of delivery. In addition, we run an advanced channel penetration test to see if the channel is worth competing in or is overly saturated.

Using a Basic Marketing ROI Formula with some additional tweaks, we quantify the activities feeding each channel and produce an accurate ROI calculation.  When each channel’s calculation is finalised, we create a strategy, the aim of which is to single out the most advantageous channel(s) and related tasks. This method is fully proven to accurately deliver predictable, profitable and sustainable growth in a designated time frame—we call it the PPS model. The average results generated by this model equate to a 33% increase in ROI over a period of 6 months. 

Essential Considerations To maintain accuracy 

• Attribution: Accurately attributing sales and revenue growth specifically to a marketing campaign can be complex so we use the most sophisticated tools available. 
• Timeframe: ROI calculations aren’t always immediate. Some marketing initiatives take time to show their full impact. We evaluate ROI over different periods (weekly, monthly, quarterly). Time to conclusion will vary for each business model. 
• Customer Lifetime Value (CLV): For broader, longer-term growth, it’s essential to factor in CLV. The objective is to always optimise towards acquiring the highest-value customers who keep coming back.

Choosing the right customer acquisition channels requires a unique combination of analytics and a deep understanding of your target audience. Our in-depth analysis offers unparalleled clarity in assessing your channel performance and making strategic adjustments for growth. Want a simplified overview? Request an initial free consultation.