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User Acquisition Made Simple

INSPIRED & WRITTEN BY Arcadier

You’ve spent months perfecting your online marketplace and coming up with an awesome game plan for the launching campaign. You wait for users to pour in to check out your website, and you try to find more effective ways to convert them into returning customers.


The customer acquisition process is hardly predictable. Not being able to acquire customers at a low enough cost can put a damper on your marketplace’s success. As you launch your marketplace and try to acquire and retain customers, don’t miss these important steps:

Identify whether your marketplace is ready for acquiring users

To check whether or not your website makes sense to people outside your startup team, you need to get customer validation. As discussed in chapter 8, the same processes used to validate the viability of your business idea can be applied here too.


Have you tried A/B testing to improve conversion rates on your landing page? If you have not, then you’re not ready. You can always make improvements — just a small tweak to a landing page could cause a 30% increase in conversions. Your website may be missing some key information, or maybe it hasn’t gone through adequate testing. Never launch your product when it’s not ready.

Have a well thought-out customer acquisition strategy

Having a detailed customer acquisition strategy will mitigate risk and improve your chances of success. This is your plan of action, where you plan out all the platforms that you will use to reach your targeted audience, your key performance indicators, timelines, and the roles your team members will be taking on.


You could choose to offer users something for free, enabling rapid customer acquisition. In that case, is your website ready for the traffic? You could also make social media sharing on your website as easy as possible. Whether it’s sending a pre-written tweet explaining that the user has just bought something, or a Facebook post to like a page of your website, social media is an easy way to create a viral loop. Public relations, pay-per-click ads and content marketing are also other great areas to focus on.


Remember that you are designing not just a product or service, but an experience for your users. Something as simple as having live help tools, an e-mail marketing plan, and a mad lib sign-up form can also help increase conversions and customer retention.


A creative mad lib sign-up form makes it fun for users to sign up. Photo credit: Creatrix.

Is your team ready to implement the strategy?

Make sure that everyone in your team understands the user acquisition strategy and what their roles in the strategy are. During the launching phase and in the early stages of acquiring customers, something is bound to go wrong. There may be bugs that you didn’t know about, or some customer complaints regarding product or service delivery. After all, you’re just starting out.

You can minimise the chances of these things happening by predicting what could go wrong, but you can’t prevent it when it happens.


Have a dedicated team that can react swiftly and come up with solutions. Crisis management efforts need to be coordinated across all functions. It’s also important to have someone, or even everyone if needed, taking on the role of customer support to respond to a new customer’s questions and concerns.While your development team is working to fix a bug, you may have to take on the communications and marketing role to address customer complaints on social media and communicate proactively about your efforts to fix the bug.

Estimate the cost of customer acquisition and the ability to monetise customers

In order to have a viable business model, you need to take into account these costs:

  • Customer Acquisition Cost (CAC) = Total (marketing) costs spent on acquiring more customers divided by number of customers acquired in the period.

  • Lifetime Value of a Customer (LTV) = Prediction of the net profit attributed to the entire future relationship — including support and after-sales service — with a customer.

Photo credit: Forentrepreneurs.com.


As shown in the diagrams above, a business if profitable when the customer’s lifetime value exceeds the acquisition cost. Since the web allows new ways for you to acquire new customers at a low cost, you should focus more on monetising your customers. If you’re not planning on using much capital, you should also aim to recover your CAC in less than 12 months.


Here are some factors and activities that affect CAC and LTV:

Photo credit: Forentrepreneurs.com.

Measure, analyse, and experiment

You can have so much data and still not know where to look. Identify your goals and a few core metrics for you to focus on during each stage of your marketplace’s growth. One common mistake that startups make is looking at vanity metrics to judge the success of their user acquisition efforts. These vanity metrics are things like Twitter and Instagram followers or Facebook fans, which have no real value.


If all else fails, experiment with other platforms your potential customers might be on. Facebook might be the most ubiquitous platform, but depending on your audience, putting ads on other platforms such as Linkedin might work much better for your marketplace.


The key might lie in minor details you overlooked, but it could also lie in how visible your website is to your target audience, which we will discuss in the next chapter.

After reading our article, these are the questions that should pique your interest:
What tweaks can be made to your marketing and communication strategy to improve conversion rates?
Which social media platforms and channels are your targeted audience using?
Looking at your current customer acquisition strategy and activities, what can you do to achieve a well-balanced business model (CAC

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