When your startup is first launching, the pressure to “be everywhere” online is significant. “You’ll fail without investing in Facebook Ads,” one article claims. “The most engaged buyers are on Instagram,” argues another.
Given this onslaught of conflicting advice, it’s no surprise that the average B2B marketer creates eight types of content and is active on six different social networks, according to data from the Content Marketing Institute:
Especially when you’re new, expanding your reach in this way might sound appealing. After all, you’ll reach more people if you’re available on more platforms, right?
Well, maybe not.
Attempting to drive growth on multiple user acquisition channels divides your resources and dilutes your focus.
It’s better to do one channel well than to do several poorly – especially when you’re first starting out. To do that, begin by mapping your existing user acquisition channels (if any) so that you can proceed with an approach that’s right for your audience, your resources and your business’s current stage.
Why You Need to Map Your User Acquisition Channels
A lot of young businesses wing it when it comes to choosing user acquisition channels. They go by gut feel, or by what worked well for a buddy of theirs or another startup in their space.
And I’m not throwing shade here – I’ve been there, and done that.
But let me give you an example that demonstrates why it’s so important to run the numbers before executing on anything.
A while back, a friend of mine had a startup, and he swore up and down that doing integrations and partnerships was going to be his growth channel. His goal was to get his company’s first 1,000 customers, but I ran the numbers and figured out that even the best-case scenario would only drive a few hundred.
His first partner was going to promote his company and their integration to their email list of 1 million people.
Sounds great, right?
The email goes out to 1 million people, and let’s estimate that 50% open the email and 10% click on the link. That’d put 50,000 visitors on his website. Now, let’s assume that 3% of those visitors took him up on his SaaS product’s 30-day free trial. That results in 1,500 new trials, and assuming he managed a 40% conversion rate to paid subscriptions (which is pretty generous, and assumes he’s figured out his activation and onboarding processes), that’d leave him with just 600 customers.
Let’s do another example… Suppose you have a product or service that’s a bit more expensive and that requires human contact from your sales team to close the deal. Since you don’t have dozens of salespeople on hand, you decide to drive people to a webinar that’ll be able to handle a big audience in a short period of time.
You reach 50,000 with your webinar advertisement, and 10% of these people sign up to participate. On the day of your event, only 50% of your sign-ups actually show, so you wind up with 2,500 attendees. At the end of the webinar, you do an amazing job selling your offering and get 10% of attendees to do a sales demo or trial your service. This gives you 250 leads. Now let’s say your salespeople are awesome and actually convert 50% of them. Your total? 125 new customers.
In neither one of these scenarios did we hit that “1,000 new customers” target, but we’ve got bigger problems:
- None of these numbers are realistic. Most partners don’t have a 1 million-person email list, and the hypothetical open rates, click-through rates and conversion rates I used aren’t going to be that high in the real world (at least, they won’t all be that high).
- In the first example, you’ve burned your dev resources to work on integrations that won’t help you meet your goals.
- In the second, you’ve taken up critical marketing and sales resources to create assets, run webinars and conduct sales demos. These people could have all been working on something more productive – and that goes double if you’re the founder and doing all of this.
Finding Your User Acquisition Channels
So, if you can’t go off your gut feel, what should you do? Check out the process below that I use to identify user acquisition channels.
Step #1 – Understand common growth channels
There are tons of different marketing and growth channels out there, but the following are the strategies I use most commonly:
- Cold email or cold calling. Cold messaging is pretty cheap to execute, but you need to put some time into ensuring you’re reaching out to the right people. If possible, warm your leads up by connecting via social engagements in advance of your message.
- Viral referral loops. This can include word-of-mouth referrals, structured referral schemes and viral loops that enable existing customers to bring on more new customers. The cost associated with this strategy varies based on the program you implement, but this is how Uber, Airbnb and Dropbox all got big.
- Paid advertising. You can use AdWords for this, but I’m loving Facebook ads lately as a starting place. Keep a careful eye on your costs. You can get new customers very quickly with paid ads, but if you aren’t tracking ROI, you can blow your budget.
- Content marketing and SEO. These strategies work VERY well, but they take a long time to show results (usually 6-12 months). They can be cheap to run, but if you’re using them for growth, expect to wait a while.
- Influencer marketing. Get a few big names to love your product and scream it from the rooftops. If you do it well, you can be very successful, very quickly. But, unfortunately, that means everyone wants to use this approach. Getting influencer attention can be tough without a major competitive advantage.
- Microtool or epic content piece creation. Release a free tool or ebook to build an audience and get traffic. At Linktexting.com, we use this ebook https://www.linktexting.com/playbook/ to generate leads.
Step #2 – Identify your competitive advantages
Consider what you do well and what your competitors do poorly. Look for gaps in the channels your competitors are winning and use these weaknesses to plan your strategy.
Don’t forget, you can also win on price by starting low to gain traction.
At Mailshake, we’re currently priced at $9/user, while our competitors are between $29-$120/user. We plan to increase our price down the road, but for now, we’ve set our prices low to enter the market.
Step #3 – Run the numbers
Take a look at the examples I shared above and run your own predictions based on whatever data you can find. Look at the numbers on your current channels and estimate the numbers for possible channels you could try. Compare your results against the resources you have available in terms of cash, time, etc.
For reference, at Mailshake, every 10 customers we acquire results in one new referral customer. That means each new customer is worth 1.1 customers to us and informs how much we can spend to acquire new users.
Step #4 – Pick your top 1-3 channels
This shouldn’t come as a surprise based on what I said earlier in this article, but my recommendation is always that businesses begin by finding one single effective channel first. Then, as that’s working, work on another while you continue to optimize your first channel.
Take it from marketer Neil Patel:
“Jumping in head first and attempting to manage, say, four or five different channels can be overwhelming, and you’re unlikely to kill it at any strategy. Even if you’re a savvy marketer who knows the ins and outs of the process, you simply can’t devote the necessary time to extract the full potential of any single channel.”
Step #5 – Evolve your approach over time
“Any great growth team is ready for and responsive to change, nimble, and always, always adapting. They go beyond adapting, and truly embrace change building their team and process around it.”
If you’re early in your business, finding growth channels is about traction – not scale. Now isn’t the time to think about long-term growth – it’s about figuring out what’ll get your first customers in the door. In their book, From 0 to 1,000 Customers & Beyond, Hiten Shah and Steli Efti recommend balancing short-term and long-term growth strategies according to the following breakdown:
- 0–10 customers: 90% short-term tactics | 10% long-term tactics
- 10–100 customers: 80% short-term tactics | 20% long-term tactics
- 100+ customers: 20% short-term tactics | 80% long-term tactics
Don’t Mistake Growth Hacks for Growth Channels
Too many marketers confuse growth hacks and growth channels, leading them to invest significant resources into strategies that’ll never move the needle.
Approach growth from a smarter place. Do the research, and run your numbers. Make educated decisions, and then focus your energy on a single growth channel that’ll help you reach your early customer acquisition goals. Never be afraid to toss a campaign that’s performing poorly, and you’ll never have to worry about overinvesting in channels that won’t support your growth.
How did you decide on the user acquisition channels you’re using right now? Leave me a note below with your approach to this process: