The importance of tracking customer acquisition funnels
Every marketer, whether they realize it or not, uses acquisition funnels.
At some point, the marketing department ran a campaign to introduce users to the brand. At another point, a new campaign was launched aimed at proving value.
Finally, they launched a new campaign aimed at driving conversions.
In the world of customer acquisition, this is what’s known as a Top of Funnel, Middle of Funnel, and Bottom of Funnel customer acquisition flow.
By tracking the efficacy of each of these funnel stages, marketers can better allocate resources to the stages that need to be elevated. For example, if you’re getting lots of impressions and clicks on your top of funnel paid search ads, but that isn’t translating into conversions, then you can reallocate budget to the middle of the funnel where you can better prove value of the brand to incentivize more purchases or sign ups.
How to track customer acquisition
The process of tracking customer acquisition starts by understanding your audience and ends with running specific formulas to measure paid media effectiveness.
- Understand psychographic and demographic audience information: the more you know about your audience, the better you can tailor your marketing mediums towards them.
- Select the right KPIs: each customer acquisition funnel stage includes different KPIs that may (or may not) be important to you. Identify which KPIs matter at each stage, so you can track effectively.
- Optimize your conversion rate: Each stage of the acquisition funnel will start with impressions (how many users see your ad). From there, you need to calculate the ideal number of users that should be converting on that ad. A conversion can mean something different at each stage. For example, at the awareness stage, a conversion could simply be a click through to your landing page where they can consume more content.
- Optimize specific channels: now that you know which metrics you’re tracking, it’s time to measure the effectiveness of each funnel stage and optimize accordingly. In the next section, we’ll cover specific ways you can optimize funnel stages.
How to optimize each customer acquisition funnel stage
In general, there are three main levers you can pull to optimize different funnel stages:
- Messaging – the different words and copy you use on your ads
- Targeting – the audiences you’ve selected for your ad reach
- Imagery – the stylistic approach of your ads
When optimizing your messaging, consider challenge-testing your headlines, your body copy, and your calls-to-action (each in isolation).
When optimizing your targeting, the best bet is to start with a very narrow target audience, and then expand outwards as you start to see higher take rates on your ads.
With imagery, we recommend challenge-testing the background colors alongside the specific objects on your ads. In our experience, the best performing images are often those of humans instead of inanimate objects.