Strong Customer Acquisition in Retail: How to do it?

Customer Acquistion Strategies

The trend of customer acquisition always remains, regardless of whether you are a new entrepreneur or a seasoned veteran.

But for many companies, sales may be unpredictable and acquiring new customers can feel like a game of chance. 

Suppose you want to grow your business consistently and profitably. In that case, you should consider customer acquisition not as an outcome but as a process that may help you consider new customers, the total cost to get them through your door, and how much money each one would wish to spend with your company.

So, let’s start by understanding…

What is Customer Acquisition?

In simple terms, customer acquisition refers to the process of attracting, identifying and converting potential customers into paying customers for your business.

It involves various strategies and tactics to reach out to potential customers and convince them to buy from your business in a measurable and repeatable way.

The main aim of customer acquisition is to acquire new customers in a cost-effective and sustainable manner while ensuring that they are happy with the product or service and are likely to return for repeat purchases.

Now, let’s understand why it is important for a business.

Importance of Customer Acquisition

The process of customer acquisition is crucial for brands of any size and age as it allows businesses to:

  • Generate profits to meet the business costs, the salary of employees, reinvest in growth, and
  • To manifest transactions for outside parties such as partners, audiences, influencers and investors.

Customer acquisition can happen in various stages of the process, which are often known as a customer acquisition funnel.

Stages of the Customer Acquisition Funnel

The Customer Acquisition funnel visualizes the journey of a potential customer. This is what a typical Customer Acquisition Funnel and its stages look like:

Customer Acquisition

Top of the Funnel (Awareness)

Your first goal should be to generate awareness amongst your target audience at this stage. Typically, the focus is on a broad audience interested in your company’s brand, products or services without a definite intent to buy or avail of the services.

For example, our retail expansion company, 91Squarefeet, may use the hashtag #retail to expose social media posts to those looking interested in retail. Or may publish blog posts which answer the queries of the target audience.

Middle funnel (Consideration)

In this consideration stage, it is seen that the prospective customers have moved from the top to the middle of the funnel and have taken action.

They might have visited the page and signed up for a newsletter or maybe started following your brand on social media. It is now up to you how you persuade them to become your customer. 

Bottom of the funnel (Purchase)

This is the final stage a prospect goes through before they convert into a customer or a client. Usually, they have taken some action indicating a solid intent to buy or convert. This can be adding a product to the cart or signing up for a free trial.

Businesses will often send incentives, like a discount code, at this stage to convert prospects who are close to deciding to buy. There are many ways a business can find and convert these new customers, primarily online.

With digital marketing, it has become easier to track exactly how your business acquires new customers, discover and test new marketing tactics, and scale those that are going to work for you.

How to calculate Customer Acquisition Cost (CAC)?

Almost every new customer comes with a cost that can be calculated based on the marketing effort put in to acquire them. 

To know whether your customer acquisition efforts are working, you must understand how to calculate your customer acquisition cost.

Your Customer Acquisition Cost or CAC is simply the cost of marketing divided by the number of new customers.

Formula to calculate Customer Acquisition Cost

For example, say your social media marketing campaign brings in 50 customers monthly, and you have a $500 ad spend, your customer acquisition cost would be $10.

Marketing Spend ($500) / New Customers ($50) = CAC ($10 per customer)

Businesses calculate customer acquisition costs to understand if their marketing approach is profitable.

Using the above example, if each customer spends $50 on average on their first purchase from your business, and your gross margin on each order is 50%, your Net Profit would be $15 on each order.

Average Order Value ($50) x Gross Margin (50%) – Customer Acquisition Cost ($10) = Profit ($15)

For brands with a higher customer lifetime value, it may even make business sense for their customer acquisition cost to not be profitable on the first purchase.

If your data tells you that the customers you acquire will likely continue buying from your brand after their initial investment, you can afford to spend more to acquire each new customer. 

Using tools like Google Analytics and other tracking/reporting tools, you can know your customer acquisition cost for each marketing initiative.

Here, the key to unlocking new ways to grow your business is experimenting with different customer acquisition strategies and attributing the results.

7 Customer Acquisition Strategies (and how to use them) 

Now, let’s explore some of the customer acquisition strategies you can use to grow your business and how to prioritize them. 

1. Use Paid Advertising 

One of the most common ways to acquire new customers is through online advertising. Many brands turn to Facebook, Google and other platforms to run ads because they provide comprehensive measurement tools that allow you to optimize your ads and get the most out of your budget. 

Regarding online advertising, Facebook and Google Ads are among the biggest paid traffic providers. But almost every social platform, marketplace or search engine you can think of offers the option to buy ads, so deciding which one to use is a matter of understanding who your customer is and where they spend their time online. 

Although each paid advertising platform has its specifications, they mainly charge for user impressions (how often your ad is seen), using a metric called CPMs (cost per one thousand impressions).

They also allow advertisers to choose whom they want to target based on their demographics, interests, and other traits. Using these targeting parameters provided by an online advertising platform, you can narrow in on prospective customers and acquire them through paid ads. 


  • Fast growth: If you’re looking to scale your business rapidly, paying for traffic is the quickest way to do it. Your business is guaranteed to get exposure, and with the right strategy and optimization techniques, companies can quickly increase their budget to acquire customers rapidly. 
  • Targeting abilities: One of the significant advantages of paid ads is the ability to target the audience, to whom your ads are shown. For example, with Facebook Ads, you can use Interest and Behavior targeting to reach practically any unique niche based on user behaviour on the platform. 

Potential Pitfalls 

  • Expensive: There is an ongoing discussion about the rising CPM year-over-year of popular online ad platforms like Facebook due to algorithm changes and competition.

    While it’s still possible to acquire customers profitably, brands may need to work on improving their website conversion rate, customer retention, and average order value to offset the rising costs of advertising.
  • Learning Curve: Running paid ads isn’t rocket science, but the platform’s intricacies might be enough to intimidate those without experience.

Good for 

  • Businesses with a Budget: Most advertising platforms don’t require upfront payments or minimum spending to access their audiences, but they still need to be cheaper.

    To be successful at paid ads requires testing different creative variations, audiences, and overall strategies to be profitable, so those with some money to invest in marketing will benefit in long term. 
  • Businesses with creative assets: One of the key factors to success with paid ads is having the right creative that can attract new customers to your business. Suppose your brand has an archive of photos, videos, and copy that can successfully introduce new people to your product and convert them into paying customers. In that case, you should consider putting some money behind them. 

2. Negotiate Influencer Sponsorships 

If you have a marketing budget, one of the quickest ways to get your product or brand in front of a relevant audience is by paying someone with an online following to promote it. This is called Influencer Marketing.

It has become a popular form of online advertising, even rivalling referrals from real-life friends, according to a survey done by Twitter. 

The success of influencer marketing involves finding the right influencers to promote your product. The challenge is to identify those who have an active, engaged following that would be interested in your product and the creative ability to produce content that reflects well on your brand. 


  • Brand awareness: Working with significant influencers can bring people into your customer acquisition funnel through brand awareness. With influencer marketing, you are paying not only to acquire new customers but to have your product or services exposed to a wider audience so that it is top of mind of the audience when they are in the market for the particular product and services. 
  • Niche targeting: A micro-influencer, who is, someone with a smaller, more dedicated following, can give businesses with niche products immediate access to a relevant online audience.

    These micro-influencers usually cost less to work with and have better engagement metrics, which means your sponsored content is more likely to get noticed by their followers and lead to a higher conversion rate of customers. 

Potential Pitfalls 

  • Tracking ROI: One of the shortcomings of using influencers as a paid marketing channel is the need for more extensive tracking than most social platforms have for sponsorships.

    While paid advertising platforms can track those who view or click on your ads, most influencer posts should be tracked through UTM links to know the location, discount codes, and other creative mechanisms. You need to track them to avoid not knowing whether a sponsorship produced sales or not.
  • Upfront payments: Most of the time, a creator will ask for an upfront payment. It protects influencers against potential scammers but can be risky for businesses since there is no guarantee the influencer will help you acquire customers.

    Creating a commission-based payment structure, solidifying your agreement with a contract, or using an escrow service can help mitigate such kind of risk.

Good for 

  • Products that require demonstration: Say you have a new, innovative product, and you want the average consumer to become more familiar with it. To do this, there needs to be more than a simple photo advertisement to attract prospective customers.

    By working with an influencer, you can have them test out, demo, or provide validation for your product that can be shared online to help convince prospective customers. 
  • Trendy Brands or Products: Often, influencers are looked up to for their ability to discover new products or trends, whether it be in fashion, food, or technology.

    If your business or brand has that “cool” factor, approaching an influencer with the opportunity to advertise your product might be more appealing as it helps them keep their audience engaged, making it a worthwhile partnership on both sides. 

3. Build an Email List 

Lead generation is often the first step to customer acquisition. It involves collecting information from potential customers to nurture them or retarget them with ads to convert them into customers. Most first-time visitors to your site won’t buy on the spot. 

Collecting email addresses is seen as one of the best lead-generation investments for customer acquisition because of the revenue that email marketing produces for businesses. According to Campaign Monitor, 59% of marketers surveyed see the most ROI from email. 

There are many ways to build an email list, from driving paid traffic to a page with an email capture form to offering a welcome discount on your website for new subscribers.

Once your email list is built, you can run email campaigns and set up automated emails to send targeted messages to your list through email marketing services like ConvertKit or Mailchimp.

These emails can be personalized and triggered based on behavioural data to help you turn leads into customers. 


  • Recurring revenue: One of the most significant benefits of building an email list is that it allows you to market to customers over a long period, extending the lifetime value of each customer acquired.

    Once the email is collected, you can set up email automation to continue engaging the customer and recommending new products. 
  • Customer data: Aside from nurturing prospective customers, an email list can help you find new prospects using “lookalike audiences”.

    Lookalike audiences are a tool provided by advertising platforms like Facebook and Google. An advertiser can upload a CSV of collected emails to find users similar to the business’s existing leads.

Potential Pitfalls 

  • Delivery Rates: As spam filters become more sophisticated, getting your emails delivered to someone’s inbox has become increasingly difficult for brands.

    An estimated 50% of emails are considered spam. Personalizing your email communications and following best practices regarding email design can help improve the deliverability of your campaigns.
  • Low-quality emails: Although an extensive email list sounds excellent, quality always overrides quantity. Although some email acquisition tactics may work, analyzing each email source’s conversion rate is essential to ensure your acquired quality leads.

    One way to decrease your email marketing costs is by regularly cleaning your list of those who haven’t opened an email from you in a long time, otherwise known as your “unengaged list”. 

Good for

  • Businesses with multiple/consumable products: If your product is consumable and therefore needs to be replenished (like coffee), or if you have a line of complementary products (like clothing), email can become your most significant source of recurring revenue.

    Suppose your business has a complete collection of products you can continue introducing to customers. In that case, you can maximize your ROI by keeping in touch with them via email and creating strong repeat purchase habits. 
  • New product launches: If you’re still in the product development stage of creating your business, collecting emails can help you prepare for a successful launch. One famous example of building a pre-launch email list is the story of Harry’s, a men’s grooming brand that collected close to 100000 emails in one week.

    A waiting list helps put those who are genuinely interested in purchasing your product on a list and builds suspense around being first in line for something new. 

4. Start a referral program. 

A personal recommendation from someone you know goes a long way. Research has shown that word-of-mouth referrals are one of the most effective forms of marketing. People trust those they know, so they listen when friends tell them to check out a new product or brand. 

To use referrals as a new customer acquisition strategy, it is up to the business owner to make it easier for those loyal customers to recruit their friends.

This can be achieved by setting up a referral program in which your existing customers are rewarded each time they get someone new to purchase from your business.

Apps like Referral Candy offer ways to encourage customers to refer friends through marketing emails, discounts, and incentives for the customer and their newly recruited friend. 


  • Low cost: Since personal referrals are so effective, using a referral program is a low-cost form of new customer acquisition.

    The fees associated with setting up a program include a subscription to a referral program app and the discounts given to the new customers recruited. 
  • Repeat purchases: Often, when customers refer a friend, they are rewarded with a small perk, like a discount code, off their next purchase. This creates the added benefit of encouraging repeat purchases from existing customers—an extra boost in revenue that can help make your referral program even more profitable. 

Potential Pitfalls 

  • Low engagement: While you might be excited to launch your referral program, there is no guarantee your customers will share that same enthusiasm and want to participate.

    If your customers have yet to receive good service from your business or aren’t in love with your products enough to recommend them, a referral program might not be the right customer acquisition channel for you.
  • Organization and tracking: Since referral programs can involve creating customer rewards, hunting who has referred customers and even loyalty points for each customer, staying organized is essential to making the program run smoothly.

    This is why many businesses use an app to manage their entire referral program. If you’re considering keeping track of referrals manually, you may encounter issues that frustrate customers. 

Good for 

  • Businesses with existing customers: To run a successful referral program, a business needs to have an existing customer base to work with. If you have a low number of existing customers, their referrals may not even cover the cost of setting up a referral program.
  • Businesses with loyal customers: While every company wants loyal, engaged customers who would love to share your products with their friends, not all are strategically designed to do this. Good customer service, quick delivery, and easy returns help create more loyal customers willing to refer their friends. 

5. Running Traditional Ads 

It turns out that digital marketing hasn’t killed old-school advertising, as modern marketers have started to return to more traditional forms of advertising, like print media and direct mail, to acquire new customers.

With the ubiquity of display ads, digital marketing efforts have become more accessible for consumers to ignore or opt out of through ad blockers.

Traditional media, from small-scale efforts like printed flyers to billboards and even TV ads, can be an excellent way to diversify your customer acquisition channels to reach a new, targeted audience. 

At the same time, technology has significantly improved both the costs and accessibility of traditional advertising methods for small businesses.


  • Decreasing costs: According to AdAge, the cost to advertise on the biggest TV shows is decreasing. If your goal is to reach as many people as possible for the lowest cost, the broad and massive reach of TV ads might make economic sense for your brand.
  • Consumer trust: Consumers’ confidence in digital ads has increased, especially as more well-known brands begin running online campaigns. However, according to a US study published by Marketing Sherpa, print and TV ads still top the charts regarding advertising channels consumers trust most. 

Potential Pitfalls 

  • Tracking: The flipside of having such a broad reach with traditional advertising is the need for more precision tracking with digital channels. When running a print or TV campaign, it is likely, not possible to always know the precise ROI from a campaign.

    However, some digital-first brands like Icon above have demonstrated how integrating a first-purchase discount code into their subways ads can help track customer acquisition from these campaigns. 

Good for

  • Local businesses: With traditional advertising bearing a hefty upfront fee, efficiencies in these channels might be found with local print, TV, and radio ads.

    If your business can only ship to a specific state or is designed for a local audience, like celebrating a city’s sports team, advertising in local media can reward you with low-cost reach while still being highly targeted. 
  • Businesses with high-priced products: Average order value plays a significant role in high-priced media. If your order value is high and your profit margins strong, the risk of spending on big-budget traditional ads can be offset by the need for fewer purchases to be profitable. 

6. Search Engine Optimization (SEO)

When looking for a product or service, many consumers search on Google. Creating website content that helps your brand appear in the search results for relevant queries is known as SEO or Search Engine Optimization.

Doing Keyword Research and implementing your findings into a content strategy for your website pages and blog can help you climb Google’s rankings, bringing you to search traffic filled with potential customers to your website. 


  • Passive, Organic traffic: Every second, over 99000 queries are entered into Google’s search engine, making it the most visited website on the internet.

    If you optimize your website and content towards this goal, you can capture a small percentage of those searching for products in your niche and successfully acquire them as customers. 
  • Evergreen: SEO is often referred to as a source of “evergreen” traffic since content created and posted months or even years ago can continue to rank on the first page of Google and drive traffic to your site.

    A good piece of evergreen content can bring your website new traffic without the need to pay continuously for every unique visitor. 

Potential Pitfalls 

  • Slow growth: If you want to show up first on Google’s search results, you can pay with Google Ads to be the first sponsored link visitors see.

    However, if you aim to show up organically on the first page, it can often take time and patience for Google to recognize your website as an authoritative source.
  • Competition: Specific niches are highly competitive regarding search rankings, making ranking on the first page more difficult. Tools like Ubersuggest can help you understand the level of competition for different search queries and keywords and provide ideas for less competitive alternatives. 

Good for

  • Those willing to play the long game: SEO is a measurable and reliable source of organic traffic, but success requires consistent effort and constant learning. The Google algorithm is prone to change, and staying on top of the latest strategies on both the technical and creative side of SEO is essential to making this channel work.
  • Content Creators: While SEO may seem quite technical, it is widely known that the quality of a website’s content to satisfy searchers plays a critical role in its ability to rank in Google search results.

    The ability to write well and create creative content ideas that align with your keyword research can help organize your content above the competition.

7. Creating an Online Audience 

With social media, individuals have attracted huge online followers of potential customers. Companies like Mamaearth have cultivated Instagram followings in the hundreds of thousands and even millions.

There are several ways to build an online audience on social media. Almost all of them require time, consistency and content to attract new followers and keep them engaged.

Your online following not only lends your brand authority but also creates an audience of customers you can reach whenever you want to promote a new product or increase sales


  • Organic traffic: Although there might be costs associated with creating an engaging social media account, it is often seen as a source of organic traffic since it can help share your content for free. Your followers can share your content or tag your brand, bringing you more organic followers and potential customers.
  • Social proof: Social media has no shortage of visible numbers, whether the number of likes or comments a photo gets or your total subscribers. These metrics lend authority to your brand in the form of social proof.

    When potential customers decide to check your brand out online (which they often do), the size of your online audience and its engagement adds legitimacy to your brand.

Potential Pitfalls 

  • Slow Growth: If creating an online audience was easy, everyone would be an influencer. Building an organic following, and turning it into a customer acquisition channel, takes time, especially in contrast to paid advertising. 
  • Algorithm Changes: One of the biggest threats to content creators on any platform is a sudden change in the algorithm that once helped them gain traction. In 2016, some of YouTube’s biggest channels claimed that their views dropped as much as 30% due to suspected algorithm changes.

    If you decide to build an online audience, your ability to reach that audience and convert them into customers will always be controlled in some part by the platform itself.

Good for

  • Content Creators: If you’re the creative type who is skilled in the area of writing, photography, video, or entertaining people online, building an online audience as a form of customer acquisition is a good use of your skills. 
  • Businesses on a Budget: If you’re strapped for cash, creating an audience with an organic reach can be a cost-effective way to attract new customers. Unlike paid ads, there isn’t a fixed cost associated with exposing your brand to new people.

Conclusion: How to Increase Customer Acquisition?

While customer loyalty and repeat purchases are essential elements to the overall development of the company, bringing new customers through customer acquisition can help you expand and grow beyond.

Customer acquisition is all about understanding how customers find your brand and why they decide to buy which may help you optimize and scale that process.

It will allow you to spend your marketing budgets more effectively, and strategically and thus you can grow your business over time.

It is very important to know which channel will work as a customer acquisition tool for your company. This involves continuously testing new approaches and mediums, allowing one to find out what works best for your business and preventing you from being reliant on a single source.

And if you want to build stores that give exceptional shopping experience to your customers and help you in acquiring new customers, Contact Us or mail us at

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