No matter how good its product or service is, IT and technology companies won’t be successful if they can’t attract enough customers.
This is where the impotence of having a customer acquisition strategy comes in.
Customer acquisition is—-simply put— the process of attracting random people and converting them into paying customers. It is always an essential aspect of any business’s success, and without a clear idea of how to acquire customers consistently, the business will struggle to grow.
For IT and technology companies, however, customer acquisition can be especially challenging due to several reasons. For instance, the technology industry is constantly evolving, which will translate into rapid changes in customer behavior. An IT and technology company must stay on top of the latest trends and technologies just to stay relevant in front of its customers.
So, how can we effectively plan and execute customer acquisition for IT and technology companies?
In this guide, we will discuss all you need to know about how to achieve customer acquisition success for IT and technology companies. We will also explore the potential challenges in customer acquisition in the IT industry and provide tips on how to tackle these challenges.
By the end of this guide, you’d have learned about the following:
- What is customer acquisition, and how it works
- The importance of customer acquisition
- The specific challenges of customer acquisition in the IT and technology industry
- Three different aspects of customer acquisition:
- Lead generation
- Lead nurturing
- Lead conversion
- Customer acquisition tactics and channels, including:
- Content marketing and SEO
- Social media marketing
- Email marketing
- Offline and online events
- Public relations
- Paid advertising
- How to choose the right customer acquisition tactics and develop a comprehensive strategy
- Monitoring and continuously optimizing customer acquisition efforts
Sol, let’s dive in and discover your ultimate guide to customer acquisition right away.
What Is Customer Acquisition?
Customer acquisition refers to the holistic process of converting a potential customer into a paying customer. It begins with identifying a potential customer from a group of essentially random people, capturing their contact information, nurturing them through the sales process, and converting them into paying customers.
We can divide customer acquisition into three different aspects or phases:
- Lead generation: identifying and attracting potential customers and capturing their contact information
- Lead nurturing: nurturing the captured leads until they are ready to make the purchase. Lead nurturing mainly involves providing potential customers with information and resources to educate them about the benefits of your product or service and convincing them to buy.
- Lead conversion: essentially the process of closing the sale, getting the nurtured leads to purchase your product/service, or signing a contract (i.e., a subscription.)
Each of the three phases has its own tactics and strategies, and the complexity of each step is what makes customer acquisition potentially challenging.
Why Is Customer Acquisition Important for IT and Technology Companies?
Customer acquisition is critically important for IT and technology companies due to several reasons:
- Business growth and increased revenue: acquiring new customers grow the company’s customer base and naturally generates additional revenue streams. A customer acquisition strategy allows your business to consistently attract and convert new customers, allowing the IT company to grow.
- Competitive advantage: in today’s very competitive IT and technology industry, acquiring new customers is essential in establishing a competitive advantage. The more customers or users an IT product/service has, the more credible it is perceived in the market. Thus, strong customer acquisition allows the IT company to establish a stronger foothold in the market and outpace its competitors.
- Business stability: relying solely on existing customers or subscribers is risky for any business, as they can always go to your competitors if you’re not careful. The ability to consistently acquire new customers can reduce your dependence on retention, diversify your revenue streams, and improve your business stability.
- Access to more insights: having more customers will provide access to valuable feedback and insights from more people. In turn, these insights help you inform product development, drive your innovation, and tap into new opportunities. Actively engaging with new customers can allow IT and technology companies to stay ahead of market trends and their competitors.
- Market expansion and diversification: a strong customer acquisition strategy enables IT and technology companies to target new customer segments, new geographic locations, or even new markets altogether. It allows the company to diversify its customer base and tap into unexplored opportunities, which in turn, can allow the business to grow even bigger.
- Investor confidence: having a robust customer acquisition strategy can demonstrate the IT company’s growth potential and business feasibility, which can, in turn, help attract investors and secure loans. Consistently acquiring new investors can strengthen the company’s financial position.
- Improve customer retention: acquiring new customers will also contribute to improving retention and reducing churn, which is critical for technology SaaS businesses. A critical aspect of successful customer acquisition is a thorough understanding of your customer’s needs, which will allow you to provide a better customer experience and increase the chances your customers will become repeat customers.
Unique Challenges to Customer Acquisition in the IT and Technology Landscape
While implementing customer acquisition is almost always challenging for any business in any industry, there are some challenges and obstacles unique to the highly competitive and rapidly evolving IT and technology industry.
Here are some of the most important ones:
- Constantly changing technological landscape: by nature, the IT/technology industry is about constant developments and rapid advancements. Businesses need to always stay updated with the latest trends and must constantly innovate, or else potential customers will simply choose their competitors. However, in practice, this can be very challenging, as it requires heavy investments in R&D and employee training/education to adapt to the new technologies.
- Intense competition: it’s no secret that the IT/technology industry is very competitive. You may be competing with more than ten different companies for the same target audience, and standing out amidst all the noise can be extremely challenging. A clear, unique value proposition (UVP) and comprehensive marketing strategy are simply critical.
- Technical barriers: your IT/technology product may require compatibility with a specific OS, integration with existing systems/solutions, or technical expertise for installation or implementation. Not to mention, the IT products or services you offer may involve complex technical concepts and jargon/terminology, so communicating the benefits to potential customers can be difficult. Simply put, your IT or technology company—and your team—will need to have a deep technical understanding to be able to acquire customers effectively.
- Longer sales cycles: not always, but the sales cycles of IT/technology solutions are typically longer than average due to the non-physical nature and complexity of the products offered. The longer sales cycle will naturally mean more leads will fall off along the way before they convert into actual customers. This means extensive lead nurturing tactics while continuously establishing credibility are critical in ensuring customer acquisition.
- Data security and privacy concerns: since IT and technology products/services naturally deal with personal and sensitive data, as well as cybersecurity concerns, ensuring potential customers that you have implemented robust security measures and compliance with data privacy regulations are highly important. However, it can be challenging in practice.
When crafting and executing your customer acquisition strategy, it’s crucial to take these challenges into account. We’ll explore how to do so in the next sections.
Identifying and Understanding Your Target Audience
The first and arguably the most important step in crafting a customer acquisition strategy is to identify your target audience and gather as much information as you can about them.
There are many different approaches you can use to identify our target audience, but for technology and IT companies, typically, it will involve four basic steps:
Step 1: Defining the ideal customer profile (ICP)
An ideal customer profile, or ICP, is a description of the type of person (or company for B2B tech companies) that would get the most value from your product, service, or solution.
Hypothetically, when your product/service is presented to your ICP, they will have the fastest and most successful sales cycle, as well as the most optimal retention rates.
For BC tech/IT companies, here are the steps on how to define your ICP:
- Conduct basic market research: identify who your ideal customers are, what their wants and needs are, and their pain points.
- Identify demographics: gather as much demographic information as you can about this customer, including age, gender, location, income level, education level, etc.
- Identify psychographics: identify psychographics information, such as interests, hobbies, lifestyle, values, etc.
- Identify buying behavior: analyze how your target customers make purchase decisions. Identify their buying triggers.
- Create a buyer persona: a buyer persona is a semi-fictional model of your ICP that includes all the demographics, psychographics, and behavioral details you’ve identified. A persona will help you in creating more targeted marketing and sales campaigns. We will further discuss how to develop buyer personas for your IT/technology company in the next steps.
For B2B tech/IT companies, here are the steps on how to define your ICP:
- Identify your target industry: what industry or niche are you targeting with your IT solution? Once you’ve identified the industry you are targeting, you can then narrow down your target audience using firmographics, such as:
- The average size of the company in the industry
- The average company revenue
- The ideal location for the company
- Figure out your target customer’s pain points: what are the problems these companies are facing that your IT solution solves? Knowing their pain points will help you how to position your product or service as a possible solution.
- Identify your target customer’s objectives: what are the goals these target companies are trying to achieve? Understanding their goals and objectives will help you communicate how your product/service can help these companies achieve their goals.
- Create a persona for your ICP: for B2B tech companies, you have to create two different layers of buyer personas: one modeling the target company and another modeling the different decision-makers in the company (you can follow the steps we’ve used for B2C companies above). For each of these buyer personas, you should include the detailed information you’ve identified in the previous steps, like pain points, goals, challenges, etc. Creating these buyer personas will help you create more targeted marketing messages and materials.
Last, but not least, it’s critical to remember that as your business grows and evolves, so will your ICP. It’s important to review and update your ICP regularly so it reflects the latest condition of the market.
Step 2: Conducting market research and competitive analysis
Market research is the systematic process of collecting and analyzing data about the product/service, its target market, opportunities, and threats.
We can perform market research using many different methods, including:
- Surveys: you can ask a group of people (i.e., your existing customers) questions related to your product/service and their purchase behaviors. You can conduct surveys online with tools like Google Forms or SurveyMonkey, in person, or over the phone.
- Focus groups: involves bringing together a small group of people to discuss your product/service or marketing ideas to get feedback. Focus groups can be effective for testing marketing campaigns/messages or gaining feedback on new products/services.
- Interviews: one-on-one conversations with your customer. Interviews can be useful for gathering in-depth information about your potential audience’s thoughts and experiences.
- Secondary research: collection and analysis of data that has been published by others (i.e., trade publications, research by other companies, industry reports, academic journals, etc.)
If you are an established tech/IT company with a sizable number of existing customer base, a viable approach is to conduct surveys, interviews, or focus groups on your existing customers.
Gather as much information as you can while referring to the ICP you’ve identified in the previous step. Try to identify patterns and trends regarding potential customers’ goals, pain points, interests, and priorities.
If you are a newer business with little to a non-existing customer base, then your option is to perform a competitive analysis.
While typically, we use competitive analysis to identify competitors’ strengths and weaknesses, here, our focus is to look at your competitors’ target audiences and marketing approaches.
Here’s how to do it:
- Identify your competitors: identify your direct and indirect competitors. The simplest way is to identify businesses that offer similar IT products or services to yours.
- Identify their target audience: once you’ve identified your competitors, the next step is to analyze their website, marketing materials, and social media pages to identify their target audiences.
- Analysis: identify patterns and trends, and try to identify the demographics, psychographics, and behavioral factors of your competitors’ target audience. Use this data to identify whether you are going to pursue this same target audience or look for gaps/opportunities your competitors haven’t targeted.
Step 3: Identifying buyer personas and their pain points
As briefly discussed, a buyer persona is a detailed hypothetical/fictional model of your target audience.
Here is an example of a buyer persona for an IT/technology company:
Name: Jane Doe
Job Title: IT Manager
Company: XYZ Corporation
Location: San Francisco, CA
- Age: 35
- Gender: Female
- Income: $100,000+
- Education: Bachelor’s degree in computer science
- Jane is responsible for keeping XYZ Corporation’s IT infrastructure up and running.
- She is constantly under pressure to keep up with the latest technology and security threats.
- She is also responsible for training XYZ Corporation’s employees on how to use new technology.
- Jane wants to find a solution that will help her keep XYZ Corporation’s IT infrastructure up and running securely and efficiently.
- She also wants to find a solution that will make it easy for her to train XYZ Corporation’s employees on how to use new technology.
- Jane is limited by XYZ Corporation’s budget.
- She also has to get approval from XYZ Corporation’s management before she can make any changes to the company’s IT infrastructure.
- Jane is active on social media and regularly reads IT industry blogs.
- She also attends IT industry conferences and events.
As you can see, the buyer persona should include all the demographics, psychographics, behavior, and pain points data you’ve gathered in the previous steps. The buyer persona should be as detailed as possible so you can better understand your target audience’s needs and challenges.
As you learn more about your target audience, update the buyer persona accordingly. This is to make sure that the persona always reflects the current state of your market.
Step 4: Creating a customer journey map
A customer journey (or buyer’s journey) map is a visual representation of your buyer persona’s experience with your company from when they learned about your brand’s existence until they finally made a purchase.
A typical customer journey map for an IT/technology company may look like this:
- Awareness stage: The buyer persona becomes aware of a company’s product or service.
- Consideration stage:
- The buyer persona research the company and its competitors to learn more about possible options. They may compare prices, read reviews, or contact the companies with questions.
- They narrow down their choices and are considering making a purchase.
- Purchase stage: the buyer persona finally makes their purchase and becomes a paying customer.
- Use stage: the newly-converted customer starts using the company’s products or services. They may encounter some challenges or issues during this state and start forming an opinion about the product/service.
- Retention stage: here, the customer decides whether (or not) to continue using the product or service. They may consider factors like product quality, the ratio between price and value, and customer support quality.
- Advocacy stage: satisfied customers help to attract more customers by advocating/promoting the product or service to their peers. At this stage, essentially, the customer assists your customer acquisition efforts for free. The IT/tech company may also start a referral campaign so the customer will be more encouraged to refer others to earn rewards.
Creating a customer journey map will help you identify what customer acquisition tactics and channels you’ll need to utilize at each stage of the journey.
Crafting a Compelling, Unique Value Proposition (UVP)
A unique value proposition (UVP) is a statement that explains why your customer should choose your IT solution over your competitors.
Assuming you’ve identified and understood your target audience—as we’ve discussed in the previous section—here are the steps on how to craft your UVP:
- Identify your product/service’s unique selling point: identify the one single thing that sets your product or service apart from your competitors. This can be a unique feature only your solution offers, a more affordable price than your competition, or anything else you offer that no one else does, or at least, no one does it better than you.
- Highlight the unique benefits: your value proposition statement should highlight the unique benefits of your product or service. Focus on the benefits that are most important to your target audience. These benefits can be:
- Problem-solving: how your product or service can help solve a problem your potential customer is facing.
- Value-added: how your product or service can add value to your target audience’s lives.
- Emotional benefits: improving your target audience’s emotional state. For example, increased productivity, reduced stress levels, etc.
- Address pain points: your value proposition should also address customer pain points. Identify the biggest challenges your target customers are facing, and explain how your product/service can help them overcome these challenges.
- Differentiate yourself from the competition: last but not least, your UVP should differentiate your product/service from the competition and should emphasize why your customers should choose you over your competitors.
For example, if you are a technology company selling CRM software, here is a UVP example that follows the above framework:
Our CRM software empowers businesses to effortlessly track customer interactions, generate leads, and successfully close deals. With its user-friendly interface, affordable pricing, and adaptable scalability, it’s the ultimate solution for companies of any size seeking to maximize their potential.
Establishing an Effective Online Presence
In today’s digital landscape, and especially in the IT and technology niche, it’s virtually impossible to achieve success without a strong online presence.
While an online presence is now a very broad subject comprising many different digital channels, you should especially focus on the following:
- A professional website: your website will be your digital storefront and will often be the first impression your potential customers will have about your brand. Make sure your website is well-designed, fully functional (error-free), and includes all the important information potential customers need to know about your business. Fortunately, with CMS platforms like WordPress or website builders like Wix and Squarespace, it’s now much easier and more affordable to build a professional-looking website.
- Optimize your website and your content for search engines: use SEO (search engine optimization) best practices so your website can rank higher on relevant keywords. Most people won’t scroll past the first page of Google searches when they are looking for information, so optimizing your website for SEO is critical to ensure that your website is visible to potential customers. While the idea of SEO may be overwhelming at first, in practice, it only comprises four key areas:
- Creating and publishing high-quality content. If your content is good and relevant to your target audience, it will climb the search results sooner or later
- Optimize your content and metadata (title tag, meta description, heading tags, etc.) by including the target keyword and its variations. However, focus on keeping the content natural and valuable for human readers, and do not overstuff your content with keywords.
- Get more backlinks/inbound links from high-quality and relevant websites. There are many methods to do this, but the best approach is to build lasting relationships with other websites and influencers in your niche
- Optimize the technical aspects of your website to make sure it has optimal user experience and is crawlable/indexable by the search engines.
- Be active on social media: build a strong presence on relevant social media platforms like LinkedIn, Facebook, Twitter, Instagram, YouTube, and so on that your target audience frequents. Regularly share interesting, relevant, and valuable posts and actively engage in conversations (including complaints and negative feedback.) Attract more social media followers and drive traffic to your website.
- Utilize paid advertising: use paid advertising to support your organic presence. The idea is to shorten the time needed to build organic traffic and social media followers by investing in highly-targeted advertising (Google Ads, Facebook/Instagram Ads, LinkedIn Ads, etc. Craft compelling ad copy and visuals, and target your ads to the right audience.
Best Practices in Different Customer Acquisition Tactics and Channels
In this section, we will explore different customer acquisition tactics and methods you can use in the three different phases of customer acquisition. It’s crucial to remember that customer acquisition is not about relying too much on one or two marketing channels but rather about integrating multiple channels to work together in a holistic strategy.
We’ll share best practices and tips for each channel to achieve this objective.
- Lead generation tactics
There are two main focuses of lead generation:
- Attracting as many potential customers as we can to our website or other platforms (i.e., social media profile)
- Convincing these potential customers to submit their contact information, mainly email addresses, so we can follow up with lead nurturing efforts.
To achieve these, we can leverage different tactics and channels, including:
Creating and publishing high-quality content in various forms (blog posts, social media posts, videos, podcasts, webinars, etc.) remains the most effective way to drive traffic to your website.
Here are the best practices for using content marketing for lead generation:
- To attract potential leads, content should be high-quality, relevant, and valuable for your target audience. Do not focus on promoting your products/services in your content (hard-selling,) but focus on providing value.
- No matter how good your content is, it won’t bring any value as a lead generation tactic if nobody knows about it. Content promotion is critical, mainly via SEO, but also by promoting your content on social media, email newsletters, and other channels.
- Include a lead magnet offer. Lead magnets are something valuable you offer for free, like gated content (eBook, whitepaper,) discount coupons, free trial, etc., in exchange for their contact information. Include a compelling call to action alongside this lead magnet.
Social media marketing
The main role of social media marketing in lead generation is to drive traffic to the website, but you can also share a link to an opt-in form or a landing page on your social media profile or post.
Some key considerations when using social media as a lead generation tactic:
- It’s critical to choose the right social media platform or platforms. You should use the platforms your target audience frequents but also the ones relevant to your business.
- Regularly share relevant content that provides value to your target audience and establishes your position as the thought leader/expert in your niche.
- Run contests and giveaways to generate buzz and interest in your brand. Make it mandatory to submit their email addresses/contact information when joining your giveaways or contests to capture leads.
- Actively engage with your followers and potential customers by commenting, liking, and sharing their content.
Paid advertising can virtually guarantee to amplify your business’s reach and quickly generate more leads. However, running ads can be very expensive if you are not careful, and you may end up losing money even if you generate a lot of leads and convert them into customers.
So, the main concern when using paid advertising in lead generation is how to manage costs, and here are some best practices to do so:
- Leverage the targeting capabilities offered by advertising platforms like Google Ads or Facebook Ads to target your ads to the right people. Accurate targeting is the key to maintaining the cost-efficiency of your ad campaigns.
- Use clear, concise, and compelling ad copy that can quickly grab potential customers’ attention.
- Use strong visuals. How your ads look will significantly affect how potential customers perceive your brand.
- Regularly track your ads’ performances. See what’s working and what’s not, and adjust your strategy accordingly.
2. Lead nurturing tactics
There are several focuses in lead nurturing:
- Establish your business’s credibility and trust so potential customers will have more confidence in purchasing from you
- Building relationships with potential customers while guiding them through the customer’s journey, step by step.
- Educating the target customers about the quality of your product/service and convincing them that your solution is the best for them.
To achieve these objectives, we can also leverage various channels:
Email marketing is the most important lead generation tactic, allowing your IT/technology company to deliver highly targeted and personalized content. With email marketing, you can send the right message to the right people at the right time, maximizing the chances of them converting.
Here are the best practices for using email marketing as a lead-generation tactic:
- Segment your email list based on criteria such as demographics, behavior, interest, stage in the customer’s journey, and so on. Proper segmentation allows you to ensure that your emails are relevant to each recipient while also enabling personalization.
- Leverage email automation tools to execute drip marketing: automatically sending out sequences of emails based on the actions taken or specific behaviors shown by the prospect. Drip campaigns allow you to ensure that your leads are getting relevant information in time.
- Perform A/B testing on different elements of the email (subject lines, content, photos used, CTA, etc.) Determine the best possible version of your email and adapt your strategy.
- Monitor your results: track the results of your email marketing campaigns so you can evaluate what’s working and what can be improved. Use this data to make a more informed decision on how to adjust your email campaign in order to improve its contribution to lead nurturing.
Content marketing can also play an important—albeit different—role in lead nurturing:
- Use content to educate potential customers about how your product/service can help them achieve their goals or solve their problems.
- Diversify your content format (blog posts, ebooks, infographics, podcasts, webinars, videos, etc.) to keep your leads engaged. Experiment with different formats and types to find out which is the most effective in nurturing leads.
- Carefully craft your content to address the specific interests and pain points of your leads, and personalize when possible.
Retargeting is a type of paid online advertising in which your ads are only shown to those who have visited your website or taken a specific action that implies an interest in your brand/product/service.
Retargeting allows you to improve the cost-efficiency of your advertising campaign, and here are some best practices:
- Choose the right platform that offers retargeting. Google Ads and Facebook Ads are two of the most popular ad platforms available.
- Your retargeting ad’s copy and visuals must be relevant to your leads’ interests
- Use clear calls to action (“Learn More,” “Sign Up,” etc.) to encourage your leads to take action
3. Lead conversion tactics
The last phase of customer acquisition is lead conversion, which is the process of convincing leads and turning them into paying customers.
There are also a variety of tactics we can leverage to convert leads, including:
- Free trials and product demos: offering free trials or product demos can be a great way to let potential customers try your solution before they make the purchase. This is an especially effective tactic for software companies (including SaaS companies.)
- Customer support: providing excellent customer support, for example during the free-trial period, can help convince potential customers to purchase from you.
- Discounts and promotions: the age-old tactic of offering discounts and promotions remain effective in encouraging prospects to buy your tech product or service.
- Eliminating obstacles: make sure it’s as easy as possible for potential customers to make the purchase. Eliminate every possible obstacle like making sure your website is 100% secure, ensuring a seamless payment process, etc.
Wrapping Up: Analyzing and Optimizing Customer Acquisition Efforts
The last (but not least) thing you should do is to track and analyze key performance indicators (KPIs) of the customer acquisition efforts.
Ideally, you should separately monitor the unique KPIs of each customer acquisition channel discussed above, but the most important ones include:
- Cost Per Acquisition (CPA): the average amount of money spent to acquire one single new customer. Calculated by dividing the total cost of all customer acquisition efforts by the number of conversions generated within the timeframe.
- Customer lifetime value (CLV): the total expected amount of money an average customer will spend over their “lifetime” (the course of relationships) with your brand. CLV should be higher than CPA to be considered healthy.
- Conversion rate: the percentage of people who take a desired action at each stage of the customer acquisition phases (i.e., signing up for an email newsletter, downloading a free trial, making a purchase.
It’s critical to identify relevant KPIs that can help you measure performance against your customer acquisition goals. Tracking and analyzing these KPIs will help you identify areas where your customer acquisition efforts are working and where they could be optimized.
Regularly review and analyze the performance of individual customer acquisition channels, identify opportunities, and adjust your strategy accordingly.
It’s also important to stay updated on changes in industry trends and best practices. Again, the IT and technology industry is a rapidly changing field, so you’ll need to constantly stay on top of these changes to ensure your customer acquisition tactics remain relevant and competitive.
Staying agile and adaptable is key to staying competitive in the IT and technology industry.