Stages of Customer Acquisition in eCommerce

One of the most common reasons why eCommerce businesses struggle to attract and retain customers is their lack of understanding and knowledge about the customer acquisition stages.  

Unless you understand different stages of customer acquisition, you can’t create effective strategies tailored to customers on each stage of their journey with your brand.

Using the customer acquisition cycle effectively will help you build a strong, loyal clientele that recommends your brand to others.

If you want to learn about the stages of customer acquisition for eCommerce and how to use them effectively in your strategy, keep on reading. 

What is the Customer Acquisition Cycle?

Let's say you're about to launch your online store. You've done thorough research to come up with a solid product and marketing strategy, you've created an impressive website, and now it's time to get your first customers. How do you go about it?

One of the most important lessons you can learn as an eCommerce entrepreneur is how to acquire customers in a sustainable fashion. That’s where the customer acquisition cycle comes in. 

The customer acquisition cycle is the entire scope of activities that take place in a company's effort to attract, acquire and retain customers.

It involves:

  • Identifying potential customers
  • Attracting them to the business
  • Converting them into buyers
  • And then retaining them so you can gain repeat sales.

This process comes with its own unique set of challenges, but it's also what separates successful businesses from those that fail.

A common misconception is that the customer acquisition cycle begins with a marketing campaign — which is only one part of it.

This process includes a number of steps, from initial contact with your brand to repeat purchases. These steps are referred to as “stages of customer acquisition.”

Example of a Customer Acquisition Cycle

To understand how these stages work, suppose you run an online boutique that sells women's clothing and accessories.

You might generate traffic by posting content on Instagram showing off your latest products and driving people to your site with a link in your bio. When they visit, they're converted from casual browsers to buyers with a discount code or free shipping offer.

And if they're happy with their purchase, you might keep them coming back by sending out a coupon for their next order or notifying them of new arrivals through email blasts.

5 Stages of Customer Acquisition in eCommerce

5 stages of the customer acquisition cycle

The stages of customer acquisition in eCommerce cover the customer journey from the moment they become aware of your brand to when they become your loyal buyers.

The five main stages are:

  • Awareness
  • Consideration
  • Conversion
  • Retention
  • Advocacy.

Let’s explain them. 

Awareness

Awareness stage of the customer acquisition cycle

The first step in the customer acquisition cycle is awareness. Customers become aware of your brand and products through different channels, such as:

  • Paid advertising
  • Social media
  • Organic search results
  • Word of mouth.

At this stage, customers aren't ready to convert yet, but they are learning about your brand and what you have to offer.

Sometimes, you cannot directly influence this part of the cycle. However, a well-planned advertising strategy can surely help you bring more eyeballs to your brand and even create a buzz around it.

Consideration

Consideration stage of the customer acquisition cycle

After new customers learn about your product and are intrigued by it, they'll begin researching and looking at reviews to learn more about its features and benefits. They may also look at competitors' products to see how they compare.

Once customers are fully informed about what you have to offer, they will consider buying it or not.

This is the most pivotal part of the customer acquisition cycle because customers will decide whether to purchase from you or not based on their impression of your brand up to this point.

This impression is primarily based on factors such as:

  • Price
  • Quality
  • Availability
  • Convenience of shopping with you.

Conversion 

Conversion stage of the customer acquisition cycle

When someone purchases from your online store, they've completed the first stage of customer acquisition — they've been converted from a visitor into a customer.

The conversion stage requires giving your prospects enough information about your product or service to convert them. You also need to make it easy for them to take action.

To be successful in this stage, understand what motivates buyers to make purchases, such as social proof or special deals. Then, create an effective strategy that urges them to take action. 

Retention

Retention stage of the customer acquisition cycle

Retention is a crucial part of eCommerce sales and marketing because it keeps customers returning again and again — even if they have other options available elsewhere online. 

Once you've acquired a customer, you want to keep that customer around as long as possible. Keeping them happy with exceptional service after making purchases ensures that they’ll keep coming back for more. 

Advocacy

Advocacy stage of the customer acquisition cycle

After you've converted someone into a paying customer (and hopefully kept them around), you want them to recommend your product or service to others.

To make sure this happens, provide great experiences that encourage positive word-of-mouth marketing — things like outstanding support and contributing to causes your customers care about can make all the difference here.

If your products are truly amazing and you’ve created a positive brand experience, people will naturally share your business with others.

Why Understanding the Customer Acquisition Cycle is Important for Your Business 

Customer acquisition is a subject that is highly discussed among business owners, managers, and marketers.

Why?

Because it’s one of the most important factors for determining how well your business will do.

Customer acquisition involves identifying your market and customers and then planning ways to communicate with them effectively as they move through the stages of consumer decision-making.

Understanding this process is essential for any eCommerce business. It helps companies determine how to prioritize their time and resources in order to drive sales.

By knowing what actions drive conversions and sales, you can focus on acquiring new customers in a way that will be profitable over time.

Final Thoughts 

Customer acquisition is an essential part of any business' growth, and eCommerce is no different.

Understanding the customer acquisition cycle is incredibly important for any business.

It will help you:

  • Make smarter decisions about your spending
  • Achieve profitability faster
  • Grow your business into a brand that is recognized by all.

If you can increase your number of customers and convert them into loyal buyers and advocates of your brand, your eCommerce business will grow like rapid fire.

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