Defining User Acquisition<\/h2>\n\n\n\n
User acquisition refers to gaining a new user for your app, website, or any other platform\u2014the definition of acquisition changes as per the nature of your business. In most cases, user acquisition refers to an app install or an account created with your business. The first paid transaction made by the user is known as customer acquisition.<\/p>\n\n\n\n Pro Tip: \u201cIn order to measure goals accurately, whatever metrics you use to define acquisition has to be the same for a definite period of time. You can then track and redefine it according to your goals properly.\u201d<\/em><\/p>\n\n\n\n Customer Acquisition Cost<\/a> is the total cost incurred for acquiring a new customer. It compares the total marketing and sales cost to the number of customers acquired for a defined period. Marketing and sales spend mostly encompasses advertising costs, the salary of marketers, the cost of salespeople, etc.<\/p>\n\n\n\n There are multiple ways to define CAC. The above definition is the general best practice. But some organizations define CAC as the cost for only onboarding the customers<\/a> onto their platforms, and a different metric is used to calculate the cost for engagement<\/a> and retention.<\/p>\n\n\n\n Pro Tip: Define a metric just for the user acquisition cost to better understand your overall acquisition cost.<\/em><\/p>\n\n\n\n Broadly, these are the channels for acquisition:<\/p>\n\n\n\n![\"user](\"https:\/\/rocketium.com\/academy\/wp-content\/uploads\/2021\/06\/User-Acquisition-vs-customer-acquisition.png\")
What is Customer Acquisition Cost (CAC)?<\/h3>\n\n\n\n
![\"customer](\"https:\/\/rocketium.com\/academy\/wp-content\/uploads\/2021\/06\/CAC.png\")
4 Ways to Choosing the Right Channels for User Acquisition<\/h2>\n\n\n\n
![Source<\/a><\/figcaption><\/figure>\n\n\n\nThere are multiple ways to define CAC. The above definition is the general best practice. But some organizations define CAC as the cost for only onboarding the customers<\/a> onto their platforms, and a different metric is used to calculate the cost for engagement<\/a> and retention.<\/p>\n\n\n\nPro Tip: Define a metric just for the user acquisition cost to better understand your overall acquisition cost.<\/em><\/p>\n\n\n\n4 Ways to Choosing the Right Channels for User Acquisition<\/h2>\n\n\n\nBroadly, these are the channels for acquisition:<\/p>\n\n\n\nPaid Search and Display ads<\/li>Affiliate and Influencer Marketing<\/a><\/li>Social Media<\/li>Email<\/li>Website \/ Blog<\/li><\/ul>\n\n\n\nChoosing the channels for user acquisition depends on multiple factors:<\/p>\n\n\n\n1. Based on Budget<\/h3>\n\n\n\nChoose the channel and number of channels according to your budget<\/a>. Generally, you should budget 3% to 5% of your gross revenue for marketing. If the gross revenue of your business is less than 5 million per year, you should budget 7% to 8%.<\/p>\n\n\n\nSocial media marketing can cost anywhere from $4000 to $7000 per month, including running paid ads. A basic monthly cost of running campaigns on one platform could range from $1000 to $2500.<\/p>\n\n\n\nThe average cost per click across different types of businesses and keywords in the US is $1 to $2 for Google ads on the search network and less than $1 on the display network.<\/p>\n\n\n\n2. Based on Business Goals and Targets<\/h3>\n\n\n\nIf the goal is to increase brand awareness, engage with audiences on social media channels. Promote visual elements on Instagram and Pinterest. Publish videos on Youtube and Vimeo.<\/p>\n\n\n\nFor example, IHOP uses Instagram to engage with a generally young audience by posting mouth-watering food photos\/videos, memes, and customer-submitted images.<\/p>\n\n\n\n <\/div> <\/div> <\/div><\/div><\/div><\/div>](\"https:\/\/blog.intercomassets.com\/blog\/wp-content\/uploads\/2018\/11\/Inline-1-768x195.png\"){kind=link}