Overhauling Your Customer Acquisition Model: How to Spend Your Budget Where It Really Counts

Overhauling Your Customer Acquisition Model: How to Spend Your Budget Where It Really Counts

Remember the good ol’ days when crafting a customer acquisition model was like a reliable recipe?

A user-friendly site, a dash of customer service, shoot your customers a few emails, pepper in some advertisements, and …


Unlike grandma’s Thanksgiving stuffing, your business strategy won’t deliver the same level of satisfaction if it stays the same for decades.

You likely have several strong strategies in place, with loads of analytics data that give quantitative metrics for how those strategies are performing. But how do you interpret the ones and zeros and translate them into actionable insights?

How can you know which strategies are truly improving your bottom line, and which ones are just draining your budget?

A world of e-opportunities opens up when you marry your quantitative and qualitative data.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

If you find that an acquisition strategy is flat out failing, you can nix it and reallocate the budget to one that does — or even a profit-booster outside of the acquisition realm, like free shipping or your customer retention program.

You can retool the strategies that are performing pretty well, but could use some improvement.

Most importantly, you can double-down on the strategies that bring you the most ROI, the highest loyalty and customer lifetime values (CLVs), and the most agreeable customers to do business with. (Because let’s face it: just because a customer is profitable, doesn’t always mean they’re worth it.)

You can also use these insights to uncover new opportunities that you never even knew were there, like a new type of website to advertise on, or a completely new medium that you haven’t traversed yet but discovered that your ideal customer is into.

A Checklist for Asking the Right Questions

If you’re not already a data junkie, your overhauling strategy will benefit immensely from digging into your existing information. When I say digging, I really mean digging.

Sales figures, analytics metrics, surveys — at large, these results can be nothing short of intimidating. Frankly, without the right lens of analysis, they can also be pretty arbitrary.

The numbers are important, but to truly get value, you’ll need to infuse qualitative data observations.

Bust out your data shovel to answer questions like:

  • Who’s visiting the site? Are they the ones who should be visiting?
  • Where did they come from? Which user acquisition strategies can we credit for their visit?
  • Are there any observable patterns in the user sessions where customers convert, spend the most, and return? Can we better sculpt our model around them?
  • What’s the customer lifetime value (CLV), or the net profit of each customer after marketing and other acquisition costs are taken into account?
Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

Key Channels to Look at & How to Look at Them

Ecommerce merchants often wonder about the ROI and effectiveness of acquisition channels. Is my Facebook ad doing anything for my bottom line? Am I getting more for my dollar from search engine marketing or social?

To answer these questions, you have to look deep inside the acquisition funnel. Acquisition channel analysis will enable you to scrutinize behaviors and patterns in different contexts, providing much needed benchmarks to understand and overhaul what isn’t working.


Facebook leads the pack for most ecommerce orders, overall revenue, and the majority of referral sales. Almost 85% of all orders from social media platforms come from Facebook. But what part of Facebook do you focus on? The ads? The Facebook group?

Start by analyzing the performance of your Facebook ad campaigns. If you haven’t already, add the Facebook pixel on your website, then set up conversion tracking to know the revenue being generated by your ad campaign. You can then choose events (actions) to track.

Ideally, ecommerce merchants want to track “purchase events” to know how their Facebook ads are performing. A certain value can be attributed to this event. For example, an ecommerce store selling luxury sofas at $1000 a set can assign a $1000 value to the purchase event.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

Compare the purchase conversion value of the different ad campaigns you’re currently running. Consider this metric as the Holy Grail. You’ll likely want to increase spend on the ad campaign that generated the most revenue, as it played a major part in acquiring profitable customers.

Also, the overall purchase conversion value from paid acquisition should be compared with the conversion value generated by other avenues on Facebook, like Facebook groups.

You may find that promoting your brand in Facebook groups results in greater revenue than what Facebook ads bring in. The boutique clothing retailer Zig Zag Stripe reached more than $6 million in sales by selling items via their Facebook group.

Invest in the more profitable strategies that offer promise to your brand. For example, a part of the marketing budget can be spent on bringing relevant influencers inside your Facebook group to talk about the unique value of your brand.

Search Engine Marketing

The eMarketing Sherpa eCommerce benchmark study examined more than 4,000 ecommerce merchants. The study found that ecommerce brands spend 29-57% of their budget on paid search (pay-per-click, or PPC), with companies earning less than $1 million per year spending more on search engine marketing (SEM) than companies earning more than $1 million per year.

Google Adwords is the preferred PPC solution for ecommerce businesses, because 98% of searchers select a brand that’s on the number one page of search results.

Because of the flighty nature of AdWords, it’s important to keep a close eye on performance fluctuations and how they tie into the costs and ROI of your acquisition model. The owners of FringSport, a Crossfit and home gym equipment supplier adopted a similar approach while generating 60% of the brand’s sales online.

“We were slow to move strict oversight and accountability over our PPC campaigns. We now have a process by which our PPC campaigns have a few months to prove themselves out on an ROI basis or they get the axe. We should have moved to this system earlier.”

To see the profitability of your campaigns, set up conversion tracking and assign values to conversion actions that generate revenue. Once you have the numbers, you can drill down to apply as much qualitative data as possible to the customers you earned from this channel.

Harnessing feedback loops is a powerful, proactive strategy for gathering qualitative data. It helps to get into the minds of your visitors and customers to see why they buy, why they don’t buy, and how you can tweak your strategies to retain existing customers while successfully enticing new ones. If you haven’t already, check out a piece from earlier this year on how to master feedback loops.


Remarketing is a great way to generate sales and reach customers in those corners of the web where you may not have thought to look on your own. Whenever your site gets a new visitor, the remarketing, also called retargeting code drops an anonymous browser cookie.

As the visitor continues to use the web, the cookie reports back to your retargeting provider so it can trigger the appropriate ad.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts


If you’re not already remarketing, check out tools like AdRoll, ReTargeter, and Meteora. Google and Facebook also offer remarketing services for customers who run ads on their PPC platforms.

You’ll also want to keep an eye on device types that purchases are taking place on. Do mobile shoppers make more purchases on weekends? In this case, consider scheduling your emails to these segments during the weekend, around the hours that the bulk of the purchases have taken place.

Tie Up the Ends, Even if They’re Not Loose

Another important consideration when figuring out what to look at and how to look at it: looks can be deceiving.

Let’s say for example that your SEO strategy is pulling in the highest-ticket purchases, while your Facebook ads are attracting customers who buy lower-ticket items. Strictly by the books, you might conclude that your SEO strategies deserve a bigger slice of the customer acquisition strategy pie.

But if you look closer, you find that those high-ticket SEO purchases tend to be one-off and less frequent, while your Facebook customers are consistently and loyally returning. As a result, Facebook brings in roughly the same revenue as SEO.

However, when you consider the higher costs of your SEO budget in comparison to your Facebook ad spend, you find that your Facebook CLV is actually higher.

You still need both - but now you’ve got the data and insights to back up a higher investment in Facebook ads, while contemplate how to improve repeat purchases from customers acquired through your SEO strategy.

Get Personal with Your Ideal Customer

Understanding your ideal customers is one of the biggest assets and focus points in the acquisition overhaul process. At the baseline, it’s important for you to segment your visitors and contacts to customize your messaging. If you’re not familiar, check out this great email list segmentation guide for whipping your lists into shape.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

Your quantitative data shows you their demographics and behaviors, but who are they really? What are their biggest pain points, and what does your brand mean to them personally? Are you harnessing your communication channels to effectively illustrate your value to them? What are they interested in, and where do they get the information that quenches these interests? What other corners of the web make up their natural habitat?

The ultimate goal of all of these efforts is to be able to zero in on your buyer personas, or ideal customer profiles — the ones who love your brand just as much as you love them.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

Once you know these intimate details, you can leverage them for your acquisition strategy.

For example, do your ideal customers hate Facebook and listen to podcasts? Maybe it’s time to cut an underperforming channel in your budget and reallocate it to a company podcast.

Is your key demographic all over Instagram? Then that's exactly where you should start investing, especially because the wins on Instagram for ecommerce are piling up fast

Even if you don’t create a new channel, now you know to stop wasting money on that channel so you can reallocate to a strategy that’s working like offering free shipping, or a better unboxing experience.

Overhauling Your Customer Acquisition Model: How To Spend Your Budget Where It Really Counts

Remember: Customer Satisfaction Is the Most Important Long-Term Metric

Focusing on revenue and profitability is crucial if you want to succeed. However, don’t let these short-term goals interfere with the true long-term value of your brand.

Ultimately, your customer acquisition and retention strategies should focus on keeping your customers happy. You know by now that acquiring a new customer is more expensive than keeping an existing one.

Perhaps you’ve heard that saying by William Bernbach of Doyle Dane Bernbach in his 1965 interview with the Wall Street Journal:

“Great advertising can make a bad product fail faster; it gets more people to know it’s bad.”

You can see killer results from dynamic, innovative strategies to transform your acquisition models — but frankly, even the best strategies won’t compensate for a subpar customer experience. According to research from McKinsey, 70% of customers’ buying experiences are based on how they feel they’re being treated.

You already keep customer service at the top of your list, but are you continually working to optimize the entire experience for visitors and customers?

Are you truly doing everything you can to meet — and hopefully exceed — the expectations of your customers, while earning new visitors’ trust that you’ll exceed their expectations too? Assuming that your answer is yes (because we have bigger problems if your answer is no), you’ll still need to make sure your theory is correct.

You can do so by looping back to feedback loops!

An Insight-Driven Approach to Customer Acquisition

When describing the right strategy for overhauling your acquisition model, “data-driven” doesn’t quite cover it. When you zoom out to take a comprehensive approach, combining quantitative and qualitative data, you’re shifting from numbers and words into the realm of actionable insights.

Your customer acquisition model should be unique to the shifting needs of your business — save the traditional recipes for family gatherings.

(Sorry, grandma.)

About the author

Dan Virgillito

Dan Virgillito is a storytelling specialist, blogger and writer who helps digital startups get more engagement and business through online content.

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