Study smarter with Fiveable
Get study guides, practice questions, and cheatsheets for all your subjects. Join 500,000+ students with a 96% pass rate.
Customer acquisition isn't just about getting people to buy—it's about understanding how different channels work, when to deploy them, and what they cost relative to their returns. On your entrepreneurship exam, you're being tested on your ability to match acquisition strategies to business contexts: a bootstrapped startup can't afford the same playbook as a venture-backed company, and B2B acquisition looks nothing like B2C. Mastering these methods means understanding the underlying mechanics of customer acquisition cost (CAC), conversion funnels, and scalability.
The methods below demonstrate key entrepreneurial principles: organic vs. paid growth, push vs. pull marketing, owned vs. borrowed audiences, and the trade-off between speed and sustainability. Don't just memorize what each method does—know which business model each serves best, how they combine in a growth strategy, and what metrics matter for each. That's what separates a passing answer from an exceptional one.
These strategies build sustainable traffic over time without paying for each visitor. The underlying principle is creating assets—content, search rankings, communities—that compound in value and reduce long-term acquisition costs.
Compare: Content Marketing vs. SEO—both are organic and long-term, but content marketing focuses on creating value while SEO focuses on being found. In practice, they're interdependent: great content without SEO won't rank, and SEO without valuable content won't convert. FRQs often ask which to prioritize for a resource-constrained startup—SEO-optimized content is the answer.
These methods require direct payment for visibility or clicks. The core trade-off is speed vs. cost—you can scale immediately but must maintain positive unit economics where revenue per customer exceeds acquisition cost.
Compare: PPC vs. Retargeting—PPC acquires new visitors (top of funnel), while retargeting converts existing visitors (bottom of funnel). Smart entrepreneurs use both: PPC drives traffic, retargeting closes the sale. If an FRQ gives you a limited budget, retargeting typically offers better ROI because the audience is pre-qualified.
These strategies multiply your reach by borrowing credibility, audiences, or effort from others. The principle here is that third-party endorsement carries more weight than self-promotion, and you can scale without proportionally scaling your team.
Compare: Referral Programs vs. Affiliate Marketing—both are performance-based, but referrals come from customers (who love your product) while affiliates are marketers (who love your commission). Referrals tend to produce higher-quality leads; affiliates tend to produce higher volume. Choose based on whether you need quality or scale.
These strategies involve proactively reaching potential customers rather than waiting for them to find you. This is "push" marketing—effective for B2B, high-ticket items, and markets where customers don't know to search for your solution.
Compare: Email Marketing vs. Cold Outreach—email marketing targets people who opted in (warm), while cold outreach targets people who haven't heard of you (cold). Email marketing has higher conversion rates; cold outreach expands your addressable market. B2C typically relies on email; B2B often requires cold outreach to reach decision-makers.
These methods reduce friction in the buying decision by letting customers experience value before committing. The principle is that demonstrated value converts better than promised value—especially for products with learning curves or skeptical markets.
Compare: Free Trials vs. Freemium—both reduce barriers, but trials are time-limited (use everything for 14 days) while freemium is feature-limited (use basic version forever). Trials create urgency; freemium builds habit. Choose trials for complex products that need full experience, freemium for products with clear upgrade triggers.
| Concept | Best Examples |
|---|---|
| Organic/Long-term Growth | Content Marketing, SEO, Community Building |
| Paid/Immediate Results | PPC, Social Media Ads, Retargeting |
| Leverage Third Parties | Referral Programs, Influencer Marketing, Affiliates, Partnerships |
| Direct/Push Marketing | Email Marketing, Cold Outreach, PR |
| Reduce Purchase Friction | Free Trials, Freemium, Event Marketing |
| Best for B2B | Cold Outreach, LinkedIn, Partnerships, Events |
| Best for B2C | Social Media, Influencers, Referrals, Retargeting |
| Lowest CAC (Long-term) | SEO, Referrals, Community Building |
A bootstrapped SaaS startup needs customers but can't afford significant ad spend. Which three acquisition methods would you recommend, and why do they fit a resource-constrained context?
Compare and contrast referral programs and affiliate marketing. What type of business would benefit more from each, and what metrics would you track differently?
An FRQ describes a B2B company selling expensive enterprise software. Why would cold outreach and event marketing likely outperform social media advertising for this business?
Which acquisition methods build owned assets that appreciate over time, and which rely on rented audiences that require ongoing payment? Why does this distinction matter for long-term growth strategy?
A direct-to-consumer brand sees high website traffic but low conversion rates. Which two acquisition methods specifically address this problem, and how do they work together in the conversion funnel?