No customers, no business. It’s that simple.
Regardless of how amazing your product or service is, no small business can survive without a regular stream of new customers.
Maybe you’ve tried getting noticed on social media. Or you’ve distributed flyers in your community. Perhaps you’ve even started blogging.
Unfortunately, without a clear plan, all these efforts can fall flat—or worse, waste your limited time and hard-earned money.
Below, we break down what customer acquisition is all about, share proven small business marketing strategies, and help you find the right approach for your SMB—whether you’re brand-new to the business scene, or simply looking to level up.
What Is Customer Acquisition?
Put simply, customer acquisition is the process of attracting potential buyers, with the eventual goal of converting them into paying customers.
But it’s about more than just grabbing people’s attention. Customer acquisition is also about guiding them along a journey until they choose your product or service.
It’s important to note that customer acquisition, which is all about gaining new business, is different from customer retention, which focuses on bringing existing customers back for more.
Of course, you need to first attract customers before you can keep them. That’s why customer acquisition is such a critical aspect of business growth.
So, how do you go about successfully reeling prospects in? It all comes down to having a well-crafted SMB customer acquisition strategy that involves:
- Targeting the right people.
- Using the right digital marketing and offline channels.
- Creating the right types of content.
- Regularly tracking your success.
- Refining your approach based on key learnings.
In the sections that follow, we’ll walk you through the key pieces of the customer acquisition puzzle, so you can start building a plan that works for your small business.
Understanding Your Ideal Customer
Communicating broad messages to the general population rarely delivers results.
So, before you get to work attracting new buyers, take some time to develop a firm understanding of the customers you’re trying to reach.
When you know who your ideal customer is, you can create a SMB customer acquisition strategy that’s focused and built to convert.
Define Your Target Audience
A target audience is a group of people most likely to buy or benefit from your product or service.
Not to be confused with target markets (a term that refers more broadly to a group of potential customers), target audiences are much more specific and defined.
For example, if your target market were “women aged 30-45 years living in urban areas,” your target audience may be “women aged 30-45 who are working professionals, living in downtown Denver, Colorado, who value sustainability and are interested in wellness.”
To identify your target audience, begin by looking at your current (or ideal) customers and followers:
- Consider demographics including age, gender, income, geography, education, and career. Flag what these people have in common.
- Then, take a deeper dive with psychographics. What are their beliefs and values, dreams and fears? What about their habits, hobbies and interests? All these factors can influence your audience’s buying decisions.
Remember: The clearer your target audience profile, the more easily you will be able to attract and acquire the right customers for your business.
Conduct Market Research
There are many ways to research your ideal customer audience.
Obviously, there is Census data, which you can access to understand local demographics. You can also look at Google Trends, as well as industry reports from major analysts like Forrester or Gartner.
But there are also low-cost and even free ways to do your own market research, helping you uncover all sorts of insights to inform your customer acquisition strategy:
- Surveys: A simple online tool like Google Forms or SurveyMonkey can provide a fast and affordable way to gather insights from current or potential customers on their preferences, needs, and buying habits.
- One-on-one interviews: Personalized conversations with customers and prospects let you dive deeper into people’s opinions and motivations. Use what you learn to craft messaging that attracts your target audience, guiding them toward purchase.
- Focus groups: Especially when participants are comfortable building on each other’s comments, this small-group discussion format can be a goldmine of valuable opinions and concerns regarding your product, service, and brand.
- Ongoing customer feedback: Direct input—whether from reviews, social media comments, comment cards, or post-purchase emails—can highlight what’s currently working and what needs improvement.
- Competitor analysis—Don’t forget to also monitor how your competitors are attracting customers! Study their websites, ads, pricing, customer reviews and more. Doing so will help you identify gaps and ways to differentiate your own business.
All together, this research will give you a well-rounded understanding of your market, so you can fine-tune your strategy and bring in the right customers.
Create Customer Personas
A customer persona goes even deeper than your target audience description—essentially personifying what an ideal customer “looks” and thinks like.
By using demographic and psychographic data to build these fictional personas, you can visualize exactly who you’re trying to reach.
Here are a couple examples of different customer personas:
| “Budget-Conscious Brenda” | “Wellness-Focused Will” | |
| Age | 49 | 27 |
| Job | Office Manager | Freelance graphic designer |
| Location | Suburban Chicago | Austin, Texas |
| Annual Income | $55,000 | $90,000 |
| Goals | Save money, find durable products that last for years | Maintain a healthy lifestyle, support local |
| Challenges | Limited budget, suspicious of online offers | Balancing wellness with a busy work and social schedule |
| Buying Behaviors | Reads product reviews, uses coupons, looks for discount codes online | Prefers to buy local, follows health brands online |
| Interests | Meal prepping, DIY crafts, games night with family | Yoga, organic food, minimalist living |
| Motivation for Purchases | Practicality and value | Major purchases must align with personal values of community, sustainability, and wellness |
Ultimately, customer personas can give you the clarity you need to more easily tailor your small business marketing strategies and content choices.
Building a Strong Online Presence
Being online today isn’t just a nice-to-have for SMBs—it’s an absolute must if you want to be discovered by potential customers.
Meanwhile, every digital marketing channel and piece of content you put out there is an opportunity to boost brand awareness, make a connection, and build trust.
Website Optimization
A well-designed and optimized website is critical to customer acquisition success.
As you build it out, be sure to integrate these key elements to not only attract visitors but also motivate them to take action:
- Focus on user experience (UX): UX is the overall feeling users get when they’re on your website. To create a positive UX, prioritize simple navigation, fast load times, and well-organized content.
- Ensure mobile responsiveness: With smartphone usage continuing to hit new heights, it’s critical to ensure your website is mobile-friendly. A mobile-first design, which prioritizes designing for smaller screens, will help boost UX, ensuring visitors can find the information they need quickly.
- Focus on search engine optimization (SEO): When people want to find information or buy a product or service, their journey typically begins with an online search. Insert strategic keywords, headings and optimized images into your site. This will encourage search engines to green-flag and recommend it to potential customers.
- Use clear calls-to-action (CTAs): The goal of a CTA is to move people beyond interest, to action, whether that’s signing up for an e-newsletter, buying a product, or something else. As you create your website content, ensure all CTAs are action-oriented, concise, compelling, and impossible to miss.
By adopting these strategies, you’ll create a smooth path that encourages prospects to engage with your brand.
Social Media Marketing
Given its interactive nature, social media is an especially powerful tool for SMBs who want to build brand awareness and acquire new customers.
To help you pin down which platform(s) your business should be on, consider the following:
- Audience behaviors, preferences and needs: Where does your target audience tend to spend time online? What types of content do they prefer to engage with? Which platforms would they likely go to find solutions to their problems/needs?
- Where your competition is: Where do similar businesses or brands have a social media presence? Study the kind of engagement they’re getting on each channel. Also review their content for inspiration on what might work best for your own small business.
- Content types: What types of content do you hope to publish—images, videos, written posts, or maybe a mix? Traditionally, Instagram, YouTube and TikTok are more video/image-based, while LinkedIn and Facebook are better suited for longer-form text. That said, these platforms can support a variety of content formats.
Regardless of where you choose to promote your business, always remember the “social” in social media! These tools are venues for meaningful interactions and building relationships—not for just posting content.
In other words, don’t make your platform one-sided. Be sure to ask questions of your followers, respond to their comments, and remain open and engaged. Over time, your social media efforts just may transform prospects into loyal, long-term customers.
Content Marketing
The term “content marketing” refers to a long-term strategy where your business creates and distributes content with the goal of attracting, engaging, and nurturing a target audience.
According to most companies, content marketing is a solid strategy for generating leads. However, it’s not enough to merely gain people’s interest—your content must also eventually motivate them to purchase.
Therefore, your content must be relevant, tailored, informative, and speak directly to the needs of your target audience (and/or customer personas).
Experts agree these content marketing tactics can be effective for customer acquisition:
- Blog articles: Publishing regular articles helps drive organic traffic to your website and showcase your expertise, industry knowledge, and understanding of customers’ pain points. Be sure to populate your blog with articles that guide them through each stage of the buying journey.
- Short-form video: Quick, engaging videos of up to 60 seconds are perfect for social platforms that feature reels. These bite-sized clips capture people’s attention quickly. Plus, video is a great vehicle for clearly explaining your products or services.
- Success stories/case studies: These proof-positive stories showcase how your product or service solved real people’s problems or fulfilled their needs. Whether written or in video/audio format, these narratives focus heavily on results and benefits.
Social media is certainly one important component of a solid content marketing strategy, often serving as a conduit between your audience and your online content.
Leveraging Offline Channels
In today’s ever-online world, it can be easy to forget about old-school marketing. But offline tactics still matter, especially for reaching audiences who aren’t as active online.
Here are a few of the most effective ways to bring in new business from outside the digital marketing landscape:
- Networking events: Industry meetups, mixers, local business group get-togethers, these (often informal) in-person gatherings are excellent for building relationships and finding leads.
- Trade shows: These events offer a physical space for showcasing your products and services and generating leads. Consider offering swag, providing hands-on demos, and exclusive promotions to attract as much foot traffic as possible to your booth or table.
- Industry conferences Conferences are a great place to boost brand visibility with highly targeted, industry-specific audiences. You can sponsor a booth or even apply to give a presentation.
- Community engagement: This activity can be a highly effective strategy for acquiring local customers. By sponsoring/participating in events and supporting community causes (e.g., food drives, fundraisers, etc.), you show commitment to those around you, while encouraging others to choose your business over competitors.
- Community media and advertising: Traditional (aka legacy) media is not dead! Local print and broadcast media, and in-store promotions can play a major role in attracting new customers. Consider placing a coupon in a community paper or buying a promo on local radio.
Ultimately, by integrating both online and offline efforts, you can expand your reach and connect with a broader range of potential customers.
Measuring and Optimizing Your Efforts
So, how can you tell whether your customer acquisition strategy is working?
By tracking key metrics, you can keep your finger on the pulse of your business, see what’s working, and spot areas for adjusting your approach.
Website Traffic
Behind-the-scenes of your website is a treasure trove of all kinds of fascinating metrics—including the number of people who visit your site, where they’re coming from, how they’re interacting with your content, and much more.
These numbers provide valuable insights into how many potential customers are discovering and engaging with your brand online.
Conversion Rate
The conversion rate is the percentage of visitors or leads who complete a desired action. The formula is:
Conversion Rate = (Conversions ÷ Total Visitors) × 100
For example:
- If 200 visitors come to your website and 5 of them make a purchase, your conversion rate is 2.5%.
- If you give 500 people a coupon at a trade show and 50 redeem it, the conversion rate is 10%.
Generally, anything from 2% to 5% is considered a “good conversion rate.” The higher the rate, the more confident you can be in your SMB customer acquisition efforts.
Customer Acquisition Cost (CAC)
This term refers to how much it costs your business to acquire one new customer. You can calculate your CAC with the following formula:
CAC = Total Marketing & Sales Costs ÷ # of New Customers Acquired in a Given Period
For instance, let’s say you spent $1,000 on social media and trade show swag in one month, and you acquired 25 new customers within that same timeframe. Your CAC would be $1,000 ÷ 25 customers = $40.
This means it costs your business $40 to acquire each new customer.
The lower your CAC, the more efficiently you’re acquiring customers—a sign that your efforts are cost-effective and sustainable. Conversely, a high CAC suggests you may need to refine your strategy.
Return on Investment (ROI)
This metric helps you figure out how much profit you’re making from your efforts, versus how much you spend on it.
To measure your customer acquisition ROI, you need to first determine your CAC (above). Then, use the following formula:
ROI = (Revenue from New Customers – CAC) ÷ CAC × 100
For example, let’s assume you spend $1,000 on a local radio ad. That ad brings in 50 new customers, who generate a total of $3,000 in revenue. So, ROI = ($3,000 – $1,000) ÷ $1,000 × 100 = 200%.
A positive ROI means your customer acquisition efforts are paying off—that is, you’re making more than you spend (congrats!). A negative ROI, meanwhile, signals you’re spending more to acquire customers than you’re earning from them.
Bitty: Your Trusted Partner for SMB Customer Acquisition Financing
Customer acquisition is an ongoing process—one that requires strategic thinking, consistency, and the right resources to do well.
But let’s face it, the costs to build brand awareness and bring in new customers can add up fast.
That’s where Bitty comes in.
We understand that SMB owners don’t always have cash on hand to fund their growth. Maybe you need financing to boost your SEO, invest in a video production firm, or attend a key industry trade show.
With fast and flexible revenue-based financing, Bitty makes it easy to cover your customer acquisition costs—without the stress and rigidity of traditional loans.
Ready to take things to the next level?
Reach out to Bitty today and get the working capital you need to grow your customer base.
