Your business will thrive only when you have a constant flow of customers going through your sales pipeline. The question then should you emphasise on customer acquisition or lead generation to grow quickly?
If you’re faced with this dilemma, it’s probably because you simply can’t draw the line between these two terms. Well, while they’re closely related and often considered as being the same, they’re not the same.
You certainly want to grow your business faster and are wondering which between acquiring customers and generating leads you should focus on to amplify your marketing efforts.
In this article, we draw parallels between the two terms to help you know where you need to focus your customer acquisition cost (cac) more to achieve your goals.
Market penetration is the ratio of services/products sold against the projected total estimate. Brands need to know their market penetration to have a sense of their estimated total market size and percentage of customers buying their services and products. This, ostensibly with the aim of eliminating competition and owning the entire market share. Market penetration also refers to actions brands take to surpass competitors and control a large market share to become a market leader. Knowing the percentage of the market size you control is critical for both established and new brands.
How Do You Calculate Market Penetration?
Customer acquisition refers to the steps your company takes to convert leads and acquire customers. It’s how you manage inquiries and prospects gained from your lead generation efforts. Customer acquisition is best viewed as a funnel where you take prospects from visitors to become customers by attracting, engaging and delighting them. That is, you look at the client’s needs and interests and nurture them to point of purchase before shifting to customer retention.
For your customer acquisition strategies to succeed, you need to identify customer pain points, their interests and budget. Only then will you market to them effectively to the point of closing a sale. It’s important to mention that done right, the customer acquisition process will include lead generation. However, while lead generation focuses on bringing people in the funnel, customer acquisition emphasises on moving the leads down the customer journey. This means sorting the leads, nurturing and qualifying or disqualifying them.
Some of the common customer acquisition channels are:
Content targeting middle and bottom of funnel prospects
Lead generation refers to the tactics your company employs to attract customers with the aim of getting them to engage with your brand. The purpose of lead generation is capturing the attention of your target client before bringing them at the top of the funnel paving way for client acquisition.
The moment you have the attention of a prospect, they become a raw lead. At this point, they’ve shown interest in your product or brand but are not a hot prospect. This calls for lead qualification.
Some of the common lead generation tactics you can use are:
Paid social links to gated content
The difference between customer acquisition and lead gen is evident when you decide to optimise these processes. While most marketers tend to give more weight to lead generation as a precursor to client acquisition it doesn’t always have to be this way.
By focusing on lead gen alone, you might end up with too many prospects in your funnel that are not the best hence can’t be qualified for client acquisition so you end up with no customers acquired. This is because bad leads can’t move through the buyer journey as they have no chance of becoming your clients.
Conversely, when you optimise your lead generation for customer acquisition, you’re likely to attract high quality leads that can translate to satisfied customers. This is an excellent strategy for bringing down your customer acquisition cost.
Deciding which, acquiring new customers and lead generation is more important isn’t easy. You need both to increase your customer lifetime value to grow your business efficiently and effectively because when you have the right strategy, they complement each other.
A solid customer acquisition strategy incorporates lead generation. A great lead generation strategy gives you a targeted pool of prospects for nurturing in your customer acquisition efforts. These two processes complement each other.
Book a call with Growthonics today to learn how we can support your business growth.