5 Customer Acquisition Mistakes You Can't Afford to Make From following the crowd to worrying about ROI, here are errors entrepreneurs make when it comes to acquiring customers.
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In The Social Network the actor portraying Mark Zuckerberg argues plastering the site with ads would ruin Facebook before it ever had a chance to take off.
We know who won that battle. After it launched in 2004, users enjoyed a clean interface. Then, in 2012 Facebook rolled out a wave of efforts to turn likes into dollars. The cha-ching rang out after it grabbed data from users' abandoned online shopping carts to retarget customers with sidebar ads.
Smart move on behalf of the social-media platform. This change helped Facebook make millions upon millions of dollars – but most companies don't have the luxury of waiting eight years to acquire customers and make their first dime. They need to get it right from the get-go.
That said, too often entrepreneurs make assumptions that go against good business sense.
Here are five common mistakes that emerge in the customer-acquisition process:
1. Assuming first-time visitors will become loyal customers
So, someone visits your cutting-edge website after attending a PR event. Now what? Increased website traffic isn't enough. Savvy customer engagement involves retargeting. In fact, 14 percent of companies with more than 1,000 employees spent more than 50 percent of their budgets on retargeting in 2014 alone.
Another solution is a call to action, which will a pain point or provide an invitation to interact with a brand.
2. Getting antsy about ROI
New products need time to blossom. When $1,000 in marketing doesn't result in a $1,000 return one week later, don't implement drastic changes. In many cases, the customer acquisition journey is a lengthy one. From the moment a new potential customer discovers your brand until he chooses to buy something, he's likely researching competitors, checking for third-party validation and looking for discounts or promotional offers. Be patient.
Short-term traffic can be deceiving, so resist the urge to make risky choices based on misleading small data sets. If ROI looks bad over a short time horizon, take a look at other metrics such as click-through rates, quality scores, bounce rates and time on site from visitors originating from a new ad channel.
3. Setting the financial resources bar too low
Many entrepreneurs have unrealistic expectations about how much money it takes to bring in prospects. If a company has $10,000 to spend on acquisition, the question becomes "For how many months?"
A business owner who doesn't know that answer doesn't have enough money. On top of that, entering a new market comes with a price tag. Be prepared to pay for the learning curve. Venture into unknown business territory with caution and realistic expectations.
4. Blowing the first impression
The natural response to completing a product's first iteration is to shout it from the rooftops but scarcity sparks interest. Imagine someone's excitement over backing a Kickstarter project being burst when the prototype sells out. The intersection of "want" and "can't have" is a lucrative place to be in.
Early messaging also makes a huge difference. TOMS garnered interest by offering a fresh brand associated with social good.
5. Following the crowd
While everyone is talking about Instagram ads, Periscope influencers or whatever's hot that week, take a look at where people are migrating their ad dollars from. If the Google AdWords marketplace is expensive and generating less-than-ideal returns, look to other marketplaces while trying to rank in search engines other than Google. Bing and Yahoo account for 20 percent of the search market and offer a lower cost per click on the same terms in many cases. If everyone crowds the hottest trending marketplaces, the cost to serve ads in those places will skyrocket.
Can't afford the retargeting applications everyone's talking about? Cost-free website pixels can capture leads, too. Google and Facebook have scripts you can place on your website to track visitors. Once you know who has been to the site, you can spend as much or as little as you're comfortable with instead of throwing money at a third-party platform or "specialist."
In a frosty investment market, it might be comforting to say, "Let's just get customers and figure out the money later." But we can't all be Facebook, so creating a customer acquisition method that boosts profits quickly isn't a luxury -- it's the only way to survive.