A product launch is a seminal event for a company. An extensive amount of time and talent are dedicated to it. It’s thrilling when a launch makes a big splash in the market and sales spike. But, how is your company going to acquire customers after the first wave of buyers have bought?
The buzz and excitement that a launch triggers will wear offthink Segway and Tesla. What then? So many companies focus on how to get their products to market and not on how they are going to grow sales once the products are available.
Every company needs to have a plan for sustained customer acquisition of its products. As important is what it’s going to cost to convert prospects to customers. What is your company going to spend to get a lead? How much is your company going to pay to close a transaction?
The average cost to acquire a customer can easily surpass the amount of money that an average customer will spend with your company. The aggregated Lifetime Value of a Customer (LTV) needs to ultimately exceed the cost of customer acquisition (CAC), or the business is unsustainable in the long-term.
For most companies, the goal is to keep sales and marketing touches to a minimum so that the business’ acquisition costs do not soar out of control. There are certainly exceptions to this approach, such as Groupon, which seems to be the current poster child of the “spend whatever is necessary to get customers” strategy. (It’s too early to tell if their mega-marketing expenditures will crush the company’s finances or result in a profitable, on-going business.)
As your company considers its cost structure in light of the product it has to sell and the methods available to market it, consider the following post-launch customer acquisition strategies:
Free Trial– Allow prospects to trial your product for free for a limited period of time. Encourage them to use it during the trial period. Then, try to convert them to paying customers. Examples of heavy promoters of free trials are Netflix, GoToMeeting and Salesforce.com.
Freemium Product – Make a scaled down version of your product available for free. Get sign ups and hopefully hook people on using it. Then encourage them to pay for the more robust version of the product. This strategy has become increasingly common in the software and app industries.
Inside Sales – Hire an internal sales team that uses the phones, email and social media to close deals. Have them offer real-time sales assistance to website visitors, respond to inbound inquiries, make outbound calls to people who opted-in to promotions, or send upsell emails to free trial participants.
Channel Partners – Don’t sell your product alone. Extend your company’s reach through partners. Have others sell it for you. The cost structure of an indirect channel is often less than selling via a direct sales team. Depending on the product, partner types may include online affiliates, VARs, system integrators, service providers, retailers and more.
Search Engine Marketing and SEO – Getting listed at the top of the first page of a Google search is internet nirvana for businesses. Doing so organically requires a commitment to SEO. Doing so via Google Adwords requires an adherence to an ongoing search engine marketing campaign.
Word of Mouth and Social Media – Word of mouth (WOM) momentum usually takes time to build. The company must invest the resources to fuel it. Some methods of sparking WOM include identifying who the influencers are in your market and spending the effort to cultivate them as evangelists. Social media helps bolster WOM through the blogosphere, build-up awareness and brand affinity via Twitter followers and Facebook Likes and trigger viral opportunities using YouTube.
These approaches to customer acquisition are a sub-set of the many options available to businesses. What others would you suggest be added to the list? Why?