Acquiring new users is one of the most important parts of growing a successful product or business. Good acquisition is about getting the right users who will find value in your product and stick around for the long haul. Get this right, and your business grows. Get it wrong, and you get bogged down in churning customers, endless onboarding, and a very small lifetime-customer-value. There are effective ways to reduce churn in SaaS, though it’s best to find good customer fit to begin with. In this blog post, we’ll explore acquisition metrics, strategies to attract users, and how to make their sign-up experience as smooth as possible.
What is Acquisition?
Acquisition is all about getting new people to sign up for your free trial or freemium plan. It’s the first step in turning potential users into loyal customers and building strong future relationships. But why is acquisition so important?
Why Acquisition Matters
Acquisition is how your business grows. It tells you how many new customers are joining, which helps you measure the effectiveness of your marketing and outreach efforts. Learn more about acquisition and growth from HubSpot. For example, if you’re running social media ads to drive traffic to your website, tracking those sign-ups will help you determine if the ads are working. Insights like these allow you to invest more in what works and adjust or stop channels that aren’t delivering. Your time and resources are finite.
Getting new users who see value in your product is critical to growth. When you attract people who genuinely find value in your product, they’re more likely to stick around, engage with your offerings, and ultimately become long-term customers. Understanding your acquisition numbers helps you make better decisions, grow your business, and create a stable future.
Key PLG Acquisition Metrics to Track
To make sure your acquisition efforts are working, it’s important to track a few key metrics:
Sign-up Conversion Rate
The sign-up conversion rate is the percentage of visitors who complete the sign-up process. It shows how effective your landing pages and calls-to-action are at converting interest into action. Read more about improving conversion rates from Neil Patel. If you have a high conversion rate, it means your message and user experience are working well.
Customer Acquisition Cost (CAC)
Customer Acquisition Cost (CAC) is the total cost of acquiring a new customer. This includes all marketing and sales expenses divided by the number of new users. For more on calculating CAC, visit Investopedia. CAC helps you determine if you’re acquiring customers in a cost-effective way. A lower CAC means you’re getting users efficiently, and you’re spending your money wisely.
How to Track These Metrics
- Use analytics tools to see where people are dropping out during the sign-up process. This will help you identify problem areas and make signing up smoother. If you’ve already set up the tools in my previous post, good for you! We’ll be using these soon. If not, head over to Building a Strong Digital Marketing Foundation and start installing the free stack. You’ll thank me later.
- Calculate CAC by adding up all marketing and sales costs (like ads, salaries, software tools) and dividing by the number of new users acquired during that period.
CAC Calculation Checklist
- Include all advertising costs (e.g., Google Ads, social media ads).
- Count affiliate costs, sales team salaries and commissions as appropriate.
- Add costs for marketing tools and software.
- Include creative or content production costs.
- Divide the total by the number of new users acquired.
Ways to Improve Acquisition
To get more users, focus on practical strategies that either improve the user experience or effectively target the right audience.
User Experience Strategies
- Improve Onboarding Flows: Make sign-up and onboarding as easy as possible. A smooth onboarding process helps users understand the value of your product quickly and makes them more likely to stay. Customer churn reasons often trace back to a poor onboarding experience.
Marketing Strategies
- Drive Targeted Traffic: Use SEO to reach people who are searching for solutions like yours, and consider paid ads to target specific audiences. Check out this guide to driving targeted traffic by Moz.
- Create Helpful Content: Make content that speaks directly to the problems your target audience is facing. By offering value early on, you build trust and encourage people to sign up. For more on content marketing, see Content Marketing Institute.
Quality Over Quantity
Remember, while it’s tempting to get as many users as possible; it’s really about attracting the right users who will find value in your product. When you focus on quality, you attract users who are genuinely interested, which leads to higher engagement and a lower churn rate. This ultimately increases the lifetime value of each customer and supports a healthy, growing business. You may need to work into this, casting a wide net at first, but it’s a good sign when you know the difference between a good prospect and one that just isn’t the right fit for your product or company.
Homework
Ready for your homework for Acquisition? Pick a few of these and answer them. Bonus points if you don’t just pick the ones that don’t make you think too hard.
- What small experiment could you run today to improve your acquisition strategy and bring in more high-quality users?
- Can you think of a recent example where one of your core beliefs about acquisition was incorrect? Have you adjusted your mindset or approach for this yet?
- What acquisition strategy are you avoiding because it’s too much work right now? Is there a quicker way to test just a small part of this?
- Who are your ideal customers, and how does your current acquisition strategy help you attract them?
- What are the characteristics of bad prospects for your product? How are you helping prospects to disqualify themselves out before they start clogging up your resources?
- Have you optimized your onboarding flow to make it as easy and engaging as possible for new users?
- Do you have a “favorite” marketing channel that isn’t producing? Why are you still pushing this?
- How does your content address the specific pain points of your target users, and is it helping to build trust before they sign up?
- Are you prioritizing the quality of users over quantity? How do you ensure/measure that new users find real value in your product?
- How do you measure the success of your acquisition campaigns, and what adjustments have you made based on these insights?
- Have you recently tested different messages or calls-to-action to see what resonates best with your target audience?
Final Thoughts
If you’re looking for ways to improve your acquisition strategy, take a moment to assess your current onboarding flow, check your key metrics, and try one of the strategies discussed in this post. Remember, acquisition is the first touchpoint—it’s where your relationship with your customers begins, so make it count!
The next post will focus on Activation, helping users achieve value in your offer.
