Understanding the Meaning of Hot, Warm and Cold Customer Acquisition

Last updated on April 15, 2019

Understanding the Meaning of Hot, Warm and Cold Customer Acquisition

Looking at the title above, you may wonder whether we mistook the topic with how you like to drink your tea. However, hot, warm and cold are valid terms used by marketers to define various categories of prospect. A prospect is any person your company wants to attract to become its customer. This is a complex process which starts with the moment when the person is aware of your business and culminates (but does not end) with the moment when they actually make a purchase. Along with this process, prospects go through three distinct phases: cold, warm and hot. Do you begin to understand the pattern? It is somewhat similar to a game of hide-and-seek. You are cold when you are far away from the target, warm as you are getting nearer, and hot when you hit the target. This is how online marketing works…of course with more complications and subtleties. What we will do today is to detail the meaning of each category of customer acquisition, and the steps and actions needed to move your prospects from one phase to the next one.

Cold Customer Acquisition

Do you remember the unsolicited calls you used to get from telemarketers trying to sell you anything from home insurance to satellite TV subscriptions? This is called cold calling and this is what cold customer acquisition is. A company approaches a person who has not heard anything about it before and tries to open a channel of communication. In the online world, the equivalent of cold calling is when a person lands on your website for the first time, either by clicking on an ad or from Google search results. These people are not familiar with your brand and your products or services, so your main goal in this phase is to familiarize them with your business. How do you do this? By directing them to areas of your website which contains content which has the purpose of:
  • helping the prospect find a solution to a problem;
  • showcasing your products, solutions and company history;
  • establishing your business as an expert in the field, who can provide a helpful solution to their problems.
Along with this process, you will direct them to opt-in pages, where they will have to leave their name and email address in order to gain access to more valuable and in-depth content (ebook downloads, video tutorials, guides, etc.).

Warm Customer Acquisition

At this point, your prospects know your business and products. They have visited your website several times, and have even subscribed to your newsletters and read your blog posts every once in a while. What you need to do now is give them that final extra reason they need to make the first purchase. In order to reach this goal, your newsletter and ads should be targeted at:
  • inviting them to take part in a webinar where you demonstrate the benefits of your products;
  • offering them a free demo or trial version of your digital products;
  • promoting discounts for new customers;
  • launching invites for an event you host where your products will be featured.

Hot Customer Acquisition

After making their first purchase and being satisfied with your products, your customers enter the hot circle. This is when you need to focus on getting them to repeat the purchase and even become your brand ambassadors. You can do this by:
  • offering discounts for referrals to their friends;
  • promoting a complementary product (or a special incentive upsell) to their current purchase;
  • setting up a loyalty program with increasing discounts or complimentary or exclusive products on subsequent purchases.
All in all, the three circles of customer acquisition have the key purpose of helping you find and keep loyal customers for a long period of time, extending their customer lifetime value beyond the point when you recover your acquisition (marketing and promotion) costs. It is a complex game with many pitfalls, but with the help with the right marketing specialists as your partners, it can be as easy as a game of hide-and-seek- for your business.

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Jennifer Ray
Jennifer Ray is the creative director and founder of Redwood. She is an expert at custom web design, WordPress development, digital marketing, UX design, local SEO, branding & graphic design. With 20 years of experience, Jennifer brings an unmatched level of expertise to her clients in the Raleigh & Wake Forest area.

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