Your ultimate user guide to CRM customer acquisition

Your ultimate user guide to CRM customer acquisition

The tragedy of the global pandemic deaths has provided many lessons, not least for business. Among these lessons has been the need for resilient customer acquisition strategies. With the business world still recovering, times have been challenging – not least for small businesses. As ever, though, out of catastrophe comes opportunity. So in many ways, now has never been a better time to put in place customer acquisition strategies for the future and the best way to do that is with the help of CRM.

What you will learn in this article

  • What we mean by customer acquisition
  • How to calculate acquisition costs
  • Why costs are rising
  • What makes customer acquisition and customer retention different
  • Getting started with CRM

What’s customer acquisition?

It’s a fancy term for turning prospects into paying customers. Customer acquisition relies heavily upon:

  • creating and managing marketing campaigns
  • tracking campaigns
  • and reporting tools that quantify their effectiveness.

In short, it helps you understand how marketing and promotional activities impact conversion rates. One of the main benchmarks used to calibrate success is CAC (Customer Acquisition Cost). 

How to calculate acquisition costs

CAC is essentially the cost of acquiring a customer compared to how much revenue they will generate throughout the relationship. Calculating CAC varies depending on the size of your company. Generally, though, CAC is worked out by totaling up your marketing costs. This includes:

  • Staff wages
  • Software costs
  • Advertising costs
  • Marketing campaign costs
  • Outsourcing and other overheads.

You then use this total cost and divide it by the number of customers acquired. Suppose you spent $4,000 on marketing and acquired 40 new customers; the customer acquisition cost would be $100.

Why customer acquisition costs are rising

The rule of thumb is that acquiring a new customer costs around five to twenty-five times the cost of retaining an existing customer. In today’s uncertain times, small businesses are struggling to break through in a noisy marketplace. A small business is also under pressure to maximize the Return on Investment, which can be an almost impossible task. This is because customer acquisition costs are increasing exponentially. Several reasons lie behind this, but the four most prominent factors are outlined below.

Customer churn

This is when a customer decides to end their business relationship. This could be down to several things, including:

  • Cancellation of a subscription or membership
  • Closing an account
  • They want to buy a product or service elsewhere
  • Or they want a free trial or product sample

This is why onboarding and follow-up management from your CRM system is critical in building lasting customer relationships. It can also weed out freeloaders only interested in a ‘freemium.

Loss of trust

A loss of trust is a contributing factor to churn. Many customers feel skeptical or distrustful of businesses in general. However, there are many reasons a customer may decide to jump ship. These can include but are not confined to:

  • Poor customer experience 
  • Product or service failure
  • A data privacy leak

The internet is a jungle

The internet is pay-to-play when it comes to online ads and sponsored content. Large companies can simply outspend small rivals to get prospect eyeballs on their content. However, a solid content marketing strategy can help even the smallest enterprises compete and narrow the gap between paid sponsorship and free content publication.

Customers distrust salespeople

Cynicism about salespeople has never been higher. Though there are variations across industries, prospects increasingly rely on their own research about a product or service before even contacting your company.

Often just reading a few reviews is enough for a prospective customer to make up their mind about you and your business. Therefore, as the conventional sales pipeline erodes, so does the accuracy of CAC forecasts.

Customer acquisition vs. customer retention

Customer acquisition and customer retention are like the opposite ends of a seesaw. You don’t want to put too much weight on one and not the other. There’s a delicate balance to be struck, for sure.

Many analysts, however, will argue that too much emphasis and money is placed on customer acquisition at the expense of retaining customers. Since customer retention is so much cheaper, they argue, why not focus on that instead? But it’s not quite as clear-cut as all that. While customer retention is cheaper overall, it still takes a significant effort to pull off. You have to 

  • devise cost-efficient easy to minimize customer churn
  • build your customer base
  • increase lifetime customer value through cross and upselling, upgrades, and loyalty programs, etc.
  • strike a balance that drives sales but doesn’t drive customers away.

Customer acquisition and customer retention are different disciplines that require different tailor-made strategies. Therefore, you mustn’t sacrifice one to bolster the other. The best way to perceive it is; customer acquisition drives business growth, but customer retention moves it up a level. There is an adage in there somewhere. But hopefully, it’s a little snappier than above.

In the final analysis, customer acquisition and customer retention are like your children; you are not allowed to have a favorite. Instead, you have to be even-handed and do your best to get them to work together in harmony.

How to get started with CRM

If you need to generate leads and increase sales, small business CRM is the answer, even for the most modest operations. Getting started with CRM customer acquisition is not a tough nut to crack. For small businesses, the best way forward today is inarguably cloud-based CRM systems. This is because they are:

  • highly affordable
  • all the tech is hosted online,
  • they are easy to implement and straightforward to use
  • and they can scale up to match your growing business demands.

Therefore, it’s a good idea to concentrate your attention on cloud CRM providers. And take up a few free trial offers to evaluate various platforms before making your final decision.


Generating leads, nurturing them, and then converting leads into regular, repeat customers for the long haul is the rationale for CRM. Every business can benefit. Contact us today. We are the cloud CRM specialists for small business and will talk through how we can help you win more customers.

May 23, 2022

Team Samdock

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