Exploring the Acquisition Process: The Role of Marketing Activities and Searching Behavior in Driving New Users Toward Acquisition

Firms are spending a lot of efforts and resources in acquiring new, and possibly valuable, customers. First purchase is often considered as the moment of acquisition and the most crucial point of the business relationship in the managerial practice. However, little is known about the process that leads to the acquisition of new customers, and when a customer can be considered fully acquired. The purpose of this research is twofold. First, we aim at analyzing the evolution of the acquisition process over time, investigating the role played by marketing activities and search behavior in turning prospects into valuable customers. Second, we intend to provide a better representation of the concept of customer acquisition, particularly in non-contractual settings. In order to achieve these goals, we estimate a Hidden Markov Model on a unique dataset, where both clickstream and transactional data of an e-tailer company are merged to provide a complete view on prospects and customers’ behaviors. We find that: (1) potential new customers pass through up to five hidden states that characterize the acquisition process. While in these stages, individuals can be described as directed searchers, deliberative searchers, first triers, acquired customers, and loyal customers; (2) the road to acquisition is heterogeneous as different migration paths across states exist; (3) both marketing activities and pre-acquisition behavior have an effect in driving prospects towards acquisition, and this effect changes according to the state in which the individual is; (4) the first purchase does not necessarily entails the acquisition of the customer: it could be just a tentative approach to start a relationship with the firm.