What's An Acquisition Channel? A Comprehensive Guide + FAQs

Customers are the key to the success of any business, but it's not always easy to reach your target audience.

When your potential customers can't find you, it's your job to find them! That's why it's vital for business owners to invest in a strong customer acquisition strategy. Not only will it help increase brand awareness, but by ensuring your brand is top of mind for all your prospective customers, you'll have a greater chance of generating leads and closing deals.

If you're looking to create a customer acquisition strategy to convert potential customers into paying customers, look no further. This guide will help your sales and marketing team better utilize your customer acquisition channels.

Keep reading below to learn more about what a customer acquisition channel is and how you can use one in your sales and marketing efforts.

What is “customer acquisition”?

So, you have a great product or service—now what? The next step in your business plan is to find some potential customers! This part of the sales process is called "customer acquisition."

According to Shopify, customer acquisition refers to: "the process of finding and persuading prospective customers to buy from your business in a way that is both measurable and repeatable—not random." That means putting in the effort to generate new leads and converting them into loyal, repeat customers.

The customer acquisition process requires many steps. Check out this helpful graphic of the "customer acquisition funnel" from Shopify:

Image. The customer acquisition funnel by Shopify.

It takes a collaborative effort from both your sales and marketing teams to bring a customer from the top to the bottom of the customer acquisition funnel. That means not only attracting the right customers to generate leads, but also maintaining a strong relationship with those leads so that you stay top of mind when they're ready to make a purchase.

What is "customer acquisition cost"?

The Corporate Finance Institute defines "customer acquisition cost" (CAC) as: "the cost related to acquiring a new customer." In other words, CAC refers to the resources and costs incurred to acquire an additional customer. These costs can range from search advertising fees to employee salaries. Depending on how successful your customer acquisition strategy is, your customer acquisition costs should ideally pay for themselves in the long-run.

The formula for calculating customer acquisition cost is:

Customer acquisition cost = sales and marketing ÷ the number of new customers

For a more in-depth explanation of customer acquisition cost and an example of how this formula is used, visit the Corporate Finance Institute website here.

What is a "customer acquisition channel"?

Now that you understand customer acquisition, you're ready to get the word out to your target audience. There are various methods your marketing and sales team can use to attract new customers. These methods are often referred to as “customer acquisition channels.”

Hubspot defines acquisition channels as: “the platforms companies use to promote their products and services to new audiences—including organic search, organic social media, and email.” Acquisition channels are the bridge between your business and your customers.

The channels you use will depend on the type of business you have. Local businesses, for example, may choose to rely on traditional acquisition channels—such as direct mail, newspaper, and radio ads—whereas larger businesses may look toward investing in traditional advertising, paid search, and social media campaigns to reach a wider customer base.

How do I use customer acquisition channels in my sales and marketing strategy?

Before you decide on your customer acquisition channels, it's important to understand your existing customers. Ask yourself, "where can I reach my customers at any given moment?" Do your customers consume more content through their TV or phone? Do they prefer to read print media or online news articles? Are they more likely to attend a webinar or an event?

Once you have a better picture of your current customer base, it's time to choose your customer acquisition channels. The customer acquisition channels you use will differ between your sales and marketing strategies. This is dependent on how customers interact with each customer acquisition channel, as well as their respective features. For example, paid ads and social media campaigns may be ideal for a marketing strategy, whereas cold calling and affiliate marketing may be better suited for a sales strategy.

Here are some of the top customer acquisition channels, according to a 2019 report by Yotpo:

What Are Your Top 3 Acquisition Channels?

Image. The highest-performing acquisition channels by Yotpo

Remember to be strategic. In a world where content is king, but content overload runs rampant, you want to ensure you aren't overwhelming your audience. Rather than aiming to use every single acquisition channel to reach your audience, make sure you're using the ones that are the most meaningful to them.

Which acquisition channels should I use in my sales strategy?

The goal of a customer acquisition strategy is to generate leads and promote conversion rate optimization, which every salesperson hopes will eventually translate into sales.

One of the most important parts of a successful customer acquisition strategy is choosing the right customer acquisition channels. The channels that complement sales strategies best include cold outreach, online and traditional advertisements, paid search, email marketing, and affiliate marketing.

1. Cold outreach

Naturally, the cheapest option here would be cold calling and cold emailing. This involves researching potential customers and directly contacting them. Your main customer acquisition cost would be the time, energy, and salary (and maybe, sanity) of your salespeople. If you use an autodialer, you may also need to factor in the cost of the subscription, as well.

If you're interested in a handy sales tool, check out our recommended Pipedrive-integrated autodialers.

2. Online and traditional advertisements

Advertising is pricey, but its effectiveness could be worth it for your brand. With website algorithms learning more and more about website visitors and social media users everyday, your reach could expand exponentially if you're advertising on the right platforms. Most advertisers charge for user impressions, however, so be prepared to pay for results.

3. Paid search

Paid search is a great way to organically gain new business and connect with your target market. Similar to paid ads, paying to appear in the sponsored advertising section of a search engine can get pricey, but it also means appearing higher up on your customers' search results. Your customer acquisition cost here is calculated by click, also known as Pay-Per-Click (PPC), but can lead to significantly higher visibility and traffic.

Paid search works most effectively if paired with a strong search engine optimization (SEO) strategy. Think about integrating this tactic with your other channels to get the most out of your investment.

4. Email marketing

This is a great strategy if you're focusing on increasing brand awareness. Believe it or not, people do read their emails — especially if there is a benefit involved, such as discounts, promotions, or exclusive content.

There is also valuable insight to be gained if you integrate your email marketing strategy with your customer relationship management software (CRM). Email marketing is a great way to strengthen your brand reputation, learn more about your customer base, and stay in touch with your customers throughout the buying process.

5. Affiliate marketing

Investopedia describes affiliate marketing as: "an advertising model in which a company compensates third-party publishers to generate traffic or leads to the company’s products and services. The third-party publishers are affiliates, and the commission fee incentivizes them to find ways to promote the company."

Affiliate marketing will help you save time while still generating unique leads that you may not have direct access to. By leaning on a third party to bring in new customers, you will be able to broaden your reach. Beware, however, as there are risks involved.

Read more about the potential for fraud in affiliate marketing on Investopedia.

6. Conversational marketing

Conversational marketing is a dialogue-driven approach that engages customers through real-time conversations at pivotal moments in their customer journey.

Popular conversational marketing tools include chatbots, live chat, video calls, and voice calls. Check out our FAQ guide on conversational growth and the follow-up article on the 5 steps for implementing a conversational growth strategy!

Which acquisition channels should I use in my marketing strategy?

Get creative, because in today's marketing environment, customers are craving content like never before. Your best acquisition channels will require you to create content that is meaningful and valuable to both potential customers and your own customers, as well. Some great examples of acquisition channels that complement marketing strategies include social media platforms, loyalty programs, and search engine optimization.

1. Social media platforms

Social media is everywhere. It's become a vital part of our everyday society, and people spend hours scrolling and communicating via the many social channels available today. Essentially, that means that there are millions of people online who are hungry for new content, making social media platforms the perfect place to increase brand awareness.

Our two most important tips when looking to create a social media strategy geared to acquiring customers are:

Tip #1. Make sure you're using the right social media platforms

Let's imagine you work for a toy company, and you're looking to post about an exciting new toy release. Which social media platforms would you focus on? If you post on TikTok or Instagram, you'll most likely catch the eye of younger audiences. If you post on Facebook, your audience will mostly consist of parents and/or relatives who wield more buying power. These are factors you'll need to consider when deciding which social media platforms are right for your brand.

Tip #2. Don't overwhelm your audience with content

How often should you really be posting? Keep in mind that your content is not the only content your audiences are seeing. In order to avoid spamming viewers, be conscious of the content you post and focus on social media posts that bring value to your audience.

2. Loyalty programs

It's no secret that people love free stuff. That's why we recommend implementing a loyalty program to get your prospective and current customers to have more meaningful interactions with your brand. Successful loyalty programs can also lead to word-of-mouth lead generation, which is a valuable channel that is difficult to tap into.

3. Search engines/SEO strategy

As we mentioned before, a strong SEO strategy is key to getting the most value out of paid search. SEO allows you to move up the rankings on search engines, so your website, blog, or social channels appear higher on a search results page.

SEO In 5 Minutes | What Is SEO And How Does It Work | SEO Explained | SEO Tutorial | Simplilearn by Simplilearn

Frequently asked questions

How many customer acquisition channels should I use?

We recommend using multiple channels to better reach your target audience. A well-rounded customer acquisition strategy could include a combination of Google ads, affiliate marketing outreach, cold outreach, and direct sales, for example. While paid advertising can be pricey, you can balance out your customer acquisition cost by supporting your strategy using more cost-effective channels like cold outreach.

What's the difference between "customer acquisition" and "customer retention"?

The answer is simple. Customer acquisition efforts help you acquire new customers. Customer retention helps you keep those customers coming back for more. To learn more about customer acquisition and customer retention, as well as how they can help increase your customer lifetime value, check out this helpful video below:

Customer Acquisition & Retention | Episode 2 by Success by LiveChat

What are acquisition channels?

Acquisition channels are the different ways you can attract customers to your business. These could be paid advertising channels like Google Ads or SEO, unpaid channels like content marketing and influencer marketing, referral programs, email campaigns, or anything else that helps bring new people to your website.

What are equipment acquisition channels?

Different from marketing acquisition channels, equipment acquisition channels are the ways you can acquire equipment and materials for your business. These could include leasing or renting equipment, purchasing used equipment, buying new equipment outright, or using asset-sharing services.

In closing

There are many customer acquisition channels available to help with growing your business, boosting brand awareness, and getting new customers. If you enjoyed this article and are looking to take advantage of these many channels, we recommend that you collaborate with both your sales and marketing teams to build a strong, cohesive customer acquisition strategy that complements their work.

Sarah Chan Rejante is a digital marketer and social media coordinator based in Toronto, Canada. She has a Bachelor’s Degree in Public Relations from Humber College and is passionate about marketing and getting in front of customers in the right way.

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What's An Acquisition Channel? A Comprehensive Guide + FAQs Sarah Chan Rejante December 21, 2022