Customer acquisition is a process that consists of an overall funnel or an overall process that’s about;

• Acquiring
• Engaging
• Retaining Customers
• Extracting value from the customers while giving them value in return.

Typically, when you first acquire customers the return is negative i.e.  You initially acquire some sunk cost in setting up the structure and channels with which you intend to reach your customers before a single sale is made. You have to invest to encourage customers to learn about you, you have to invest resources to engage them and you have to invest resources in getting them to make a buy-in.

Acquiring
At this level of customer acquisition, the resources invested must be reflective of both the budgetary strength of the organization, the industry within which the organization is functioning, and the desired reach or impact.

There are a few things to note about concerning your customer acquisition process;

• What are all the activities that you have to engage customers in, in terms of making them aware of the need for the product or service you offer
• How are you going to encourage them to get information about you as a possible choice in the meeting and fulfilment of the need your product or service solves?

These discrete activities involve cost and they’re all critical to the acquisition process. In the Acquisition process, there are two crucial things to consider.
1. The Principle of selection.
2. The principle of treatments.

The principle of selection is that customers that are selected by other customers, or that come in because of referral, on average tend to have higher customer lifetime values and lower customer acquisition costs.

Getting existing customers to refer other customers
We have been looking at thoughts in the customer acquisition process. We have also looked at one really important engine for the entrepreneur and customer acquisition dynamics; which are getting existing customers to refer other customers. This is important because they’ll have higher CLV’s, and those customers who were referred, will then be more likely to do referral themselves.

Methods to Acquire Customers
Another method by which you can acquire customers can vary according to location. So, this is just another important factor to think about when you acquire customers.

Let’s look at this in summary. There are four methods;

• Method number one is to acquire customers through offline word of mouth.
• Online word of mouth
• Magazine advertising
• Through people doing an online search

Customer Acquisition Process
Assuming you are selling a product or service that is not observable in the act of consumption, like wearing a headset. In this case, you might want to think about, can I create content that people might be willing to share and that creates visibility or observability into the product?
Imagine creating a very humorous piece of video content for a product that people don’t actually observe others using, e.g. a guy shaving his face with a razor. That’s not socially observable. I don’t have people come to my house and then watch me shave, but because of that funny content, I might then share it with others.

Another crucial point to know in the customer acquisition process is the level of risk in terms of failure the customer is exposed to in terms of purchasing your product or service. Can your product or service be adopted without incurring too much functional risk, i.e. this thing hopefully is going to work; Not too much social risk, i.e. it’s not embarrassing for them to do so. And not too much financial risk, i.e. if I buy into your product or service, it’s not going to become some unintended or negative financial consequence.
And then finally, this is particularly important for those of you who are addressing perhaps less developed markets around the world; Can the product be tried or consumed in relatively low cost or small units. We call that divisibility.

If you can think through this framework and adapt it to your business, you can create a customer acquisition process that helps you sustainably grow your business.