Launch and grow your online business

Customer Acquisition for Dropshipping

By Ecommerce Pro

Just because you can build your dropshipping website in a day, doesn’t necessarily mean that you’ll start making money right off the bat. Your dropshipping business needs customers in the same way that you need water to live. Without customers, there is no point in running an online store or any business for the matter. Because of this, customer acquisition should be a primary strategy that you need to focus on right away and throughout your online dropshipping venture.

For your dropshipping store to succeed and grow, you’re going to need to have a pretty solid understanding of customer acquisition and to develop a plan of your own that converts your target audience into your paying customer.

In this blog post, we are going to talk about concepts related to customer acquisition, customer acquisition cost, and about how to get new customers to your online store.

Let’s start by talking about what customer acquisition means to you and why it is important to your dropshipping business:

 

What Is Customer Acquisition?

Customer acquisition is the process of acquiring new customers for your online store, and it is vital to every business, no matter the size or age.

It’s kind of a no-brainer that customers are the very foundation of your business’s success. Customer acquisition is important for you because customers are what make your online business profitable. Acquiring those customers means quite literally everything because it is the fastest way to grow your business and reach your revenue goals.

Your patrons also help you:

  • Make money for the overhead cost of running your online store.
  • Pay your employees or team.
  • Show evidence of your growth to your customers, investors, and partners.

When you continuously acquire new customers, this helps you boost sales, because the more prospective customers you attract, the more chances you have to sell your products.

Also, keep in mind that in the course of your business you will lose customers. Customers move on and maybe they only needed to make a purchase from you once and never again.

A customer acquisition strategy will help you keep the ball rolling with the help of new customers streaming in. That’s not to say that you shouldn’t work on customer retention, which you should and must because it’s generally agreed upon that acquiring new customers is a lot more pricey than retaining them. But for you to garner loyal customers, you must continually acquire new ones first.

Speaking of cost, let us move on to CAC or customer acquisition cost.

 

Cost of Customer Acquisition

Customer acquisition cost otherwise referred to as CAC, is the price of acquiring a new customer. You know by now that to get the word about your store out, you will have to market your store and maybe even pay for ads. 

Calculating your CAC will help you figure out how much each new customer is costing you. The price of customer acquisition is reportedly five times more expensive than retaining an existing customer, so ideally, businesses like to keep CAC as low as possible.

Your CAC is the cost of marketing expenses divided by the numbers of customers that you acquired through your paid efforts.

In other words: CAC = Marketing Costs/Customers Acquired 

For instance, if you have allocated $100 in 6 months for online ads, and acquired 50 new paying customers during that period, your CAC amounts to $2 per new customer. If you are just starting out and planning your CAC ahead of time, you won’t be able to get a really good sense of how much your cost per customer will be, but having an estimate of how much you are willing to spend on customer acquisition is a great way to be prepared.

If you have already been running your marketing campaign across different channels, then this is where calculating and knowing your CAC will come in to give you some valuable data. If you know which marketing channel is giving you the lowest CAC, then you’ll know exactly where to double down on your marketing efforts.

Now that we have talked at length about the concepts behind customer acquisition, let’s talk about how to improve your CAC.

 

Get the Right Customer

One of the most important steps to take in running your dropshipping store is to define your target audience.

First of all, how can you acquire your customers if you don’t know who or where they are? You must never go into your customer acquisition plan blind, and you should certainly not go about the business targeting a wide range of people. If you attempt to target everyone, you might as well target no one. That kind of approach is costly. Acquiring new customers takes time and monetary resources, so you must target the right kind of customers for your business.

If you want your customer acquisition effort to be worth your while and effective then you should clearly define the target market that will ultimately be more receptive to purchasing your products.

A target market is a group of consumers who share similar characteristics, whether it be age, gender, hobby, lifestyle preference, etc., that make them more likely to need and want certain products because it caters to their specific needs, desires, and lifestyle.

When you have established who your target audience is, then you can begin defining your customer acquisition plan.

 

Leverage Content Marketing for Long Term Wins

Content marketing is the gift that keeps on giving. 

No matter what type of marketing tactics you use, content marketing should be part of your process, because content marketing is an integral aspect of gaining new customers. Content marketing wins because you are providing relevant and valuable content that attracts your prospective customers to your business.

Content marketing must always be strategic in its approach, it must be focused on delivering relevant information at a consistent level to attract and retain a carefully defined target audience. Creating great content around your marketing strategy is also considered a long term approach to build a strong connection with your target audience, because you are delivering something valuable and relevant to them, and not just mindlessly pushing your products.

Since content marketing is considered a long-term approach, think of it as building a library of content that will continue to reach your prospective buyers and reduce your CAC over time.

Here is how content marketing can give your customer acquisition plan a big boost:

Seo-  Search engines favor businesses that publish quality content regularly. So if you are running a blog alongside your online store, content marketing can help you rank higher on search engine results pages, allowing new customers to discover you more easily.

Social Media- Social media marketing should not be set apart from content marketing. When you engage in social media marketing, you are sharing valuable and entertaining content that is targeted at an audience with the goal of acquiring new customers, retaining them, and growing your business.

Customer Relations- When you create great content, you are creating a mutually beneficial relationship between you and your target audience. When you share good material, the more customers will want to connect with you and trust you based on your authoritative content.

Paid Ads- for your paid advertising to work, you need great content behind it. Failure to achieve good content may result in people clicking on your ads, only to click the back button in less than a minute. This won’t help your conversion rates and CAC at all.

Many marketers today say that “Content is king”, so why not combine content marketing with whatever strategies you may already have in place to improve your customer acquisition rates?

 

Social Media Marketing

Social media has become integral to running a business. Because of how big a part social media plays in the lives of people today, not having a business that people can connect to on social media is just as good as having a business that doesn’t exist at all. This is even truer if you are running an online store with no physical counterpart.

Social media marketing comprises of two methods: organic and paid advertising. Both are useful in building awareness to your brand and in sharing relevant content with your audience that links them up to your shop and its products.

There are billions of people using social media every month, so trying to acquire customers organically is possible, although it may take some perseverance. The key to social media marketing is to go about things purposefully and to go where your audience is.

For instance, if you are targeting young athletic men for your sportswear shop, Pinterest may not be the way to go, considering it is usually so much more popular with female shoppers. The idea is that you have to be accessing the right network to be successful.

If you are targeting Millennial shoppers or Gen X shoppers, then go for Facebook, Instagram, and Snapchat.

Sponsored posts on Facebook, Instagram, or Twitter are a great way to acquire customers because they put your ads right under the eyes of your target audience—in other words, the people with the highest potential of becoming our customers. Paid ads help you get things going a little quicker than if you were to go about things organically, but you can get far mixing the two methods up for maximum reach.

 

Search Marketing

Like social media, search marketing can be done organically or through paid methods. Whenever you go and search something on Google or your preferred search engine, you type in a search query that leads you to a page also know as the SERP or Search Engine Results page. The higher you rank on the SERP, the more visible you are to search engine users and the more traffic and new customers you get to your online store.

The aim of ranking high on the SERPS comes down to search marketing. Just like social media marketing, there are paid and free ways to go about search marketing. Organic search marketing is also known as SEO or Search Engine Optimization.

For search engines like Google, it is their goal to provide users with good quality results as much as possible. There isn’t an exact proven method to get your site to rank highly on the SERPs. Methods you can use include:

  • Creating quality content to increase authority.
  • Putting your main keyword in the search title
  • Linking internally to your site
  • Use video
  • Write meta tags to match keywords
  • Get external links to your site from other sites
  • Keep updating your site with new content
  • Create external links to your site through social media

There’s more that goes into SEO but these are just some of the basics to help you improve your search ranking and acquire those customers organically. Working on SEO is also inexpensive, and many of today’s companies big or small prioritize search engine optimization because it is truly one of the best ways to acquire customers.

SEO takes quite a bit of time and some dedication. If you don’t want to go by this route or you wish to complement your SEO efforts with paid search marketing, then there is a short cut to the top in the form of pay-per-click ads. You see these ads on the very top of the SERP, the only distinction between paid ads and the organic search is that the paid ads have “ad” stamped next to their URL. PPC theoretically improves your ability to get customers to your site and may be worth looking into.

 

Back to You

Customer acquisition is everything for your dropshipping business, no matter how small or large and no matter the stage your business is in. It is a process that you must prioritize throughout the entirety of your dropshipping venture.

The key to growing your customer base is in marketing and in delivering your marketing message to the right customers. The first thing you must do is define your target audience so that you can place your marketing effort down where it counts the most. Not only will this help you target the right customers, but it will also help you lower your CAC in the long run.

 

Your Thoughts

What are your thoughts on the importance of customer acquisition and the role that it plays in your dropshipping business? Are you looking to improve your online store’s ability to connect and acquire new customers more effectively? If you are, let us know.

At Ecommerce Pro, we love to discuss the future plans of your online business ventures and to share practical solutions that help you meet your eCommerce and dropshipping business goals. If you have any questions regarding this article, we would like to address them. Please feel free to begin a conversation with us today!

About the Author

Ecommerce Pro content team crafts resources with the objective to provide advice for new and existing ecommerce entrepreneurs on how to effectively launch, grow and manage their online business.

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