User acquisition

User acquisition is a term that describes the strategy and processes businesses apply to get new people to buy their product, use their app, or register for their service. 

Businesses use a variety of methods to try to get as many users as possible to sign up. For example, a company will develop advertising campaigns, promotions, and rewards that are focused on attracting new users. Getting more users on board will help the business to accelerate growth and perform better.

What is user acquisition?

User acquisition is all about getting more users – typically for apps, platforms, and services. 

The purpose of user acquisition is to keep a steady flow of new users and revenue for the business. User acquisition involves using one of the following methods to attract new users:

Why is user acquisition important?

User acquisition is essential for most modern business models as it helps companies to increase their customer base and maximize their revenue. 

Setting out a comprehensive user acquisition, implementing it carefully, and measuring the results is a big factor in maintaining long-term success, especially for app and digital services businesses.

Measuring user acquisition accurately enables businesses to analyze which advertising and marketing approaches work best to gain new users and optimize their processes.

How much does user acquisition cost?

The cost of user acquisition can vary greatly depending on the type of product or service, industry, target audience, and the specific acquisition strategy being used.

For example, the cost of user acquisition through paid channels such as Google AdWords or Facebook Ads can range from a few cents to several dollars per user. The actual overall cost depends very much on the advertiser’s budget and the quality of the ads.

What are the KPIs for user acquisition?

The main KPI for user acquisition is CPA which stands for cost per acquisition. CPA is calculated by dividing the total overall cost of the acquisition campaign by the number of users acquired.

Other related KPIs include:

How to improve user acquisition

An effective way to improve user acquisition is to pay close attention to KPIs and identify which acquisition methods lead to the highest CPA and aim to bring this value down. In doing so, you should also increase your ROI. 

Some examples of how to reduce CPA include: