Building traction in a new market is challenging. Start-ups and other growth-stage companies face a myriad of choices when defining their value proposition. How can these companies build their marketing strategy and acquire new customers with limited resources?
1. Define Your Audience
This is one of the most critical but overlooked steps in growth planning. Ideally, everything should be built around your customer. Think about who you created your product and/or service for. Audiences can generally be defined by demographics (B2C), firmographics (B2B) and psychographics, such as lifestyle, interests and behaviors.
Next, ensure that the size of your target audience within your target geographies is large enough to support your desired growth potential for your business. Finally, develop your ideal customer personas and why they buy. Pro Tip: gather some great intel to help inform your personas using survey tools like Survey Monkey, Google Surveys, or Pollfish.
2. Define Your Goals
Knowing your growth goals (e.g. revenue, profit, units sold, etc) is important, but ensuring that they are attainable and well informed is imperative. It is crucial to do research, modeling, and forecasting to help inform and define your goals. When researching, use tools like Google Ads Keyword Planners, Amazon Brand Analytics, Facebook Ads Manager and other 3rd party ad platforms to estimate the size and relative costs of your target audiences for each channel within your target geographies.
Do your research on how much revenue each customer will generate – customer lifetime value – based on how you will price your product or service and how often will a customer need to buy. From there, you can determine your target customer acquisition cost, or how much you are able to pay to acquire each customer and still be profitable to your desired level.
3. Define Your Positioning
Do a thorough analysis of your competitive landscape to learn who your competitors are, how they are marketing themselves to your target audience, and determine how you will stand out. When crafting your messaging, primarily focus on your WIIFM (What’s In It For Me) and clearly define the benefits, not just the features that you offer. Focus on why your target audience should choose your products/services over other options.
Then validate and refine your approach by cheaply surveying your target audience using tools like Google Surveys, Pollfish or Survey Monkey. Use the feedback and insights you receive from the surveys to hone in on the message and/or creative that resonates most before spending your limited media budget on campaigns. This will greatly increase the likelihood that you attain traction (otherwise known as product-market fit) and ensure that your marketing strategy and media budgets are strategically aligned.
4. Define Top Channels for Customer Acquisition via Rapid Traction Testing
Now that you have established your target audience and positioning, finding the best channels to acquire customers is the next challenge. How can you determine which channels will not only be most cost-effective in reaching and converting your audience, but also provide the ideal scale? Sometimes getting only 1 or 2 customers from a channel each month is great and cost-effective – while in other situations that volume may not be enough to drive growth for your business. For most of the world’s most successful businesses there are only 1-2 primary channels for customer acquisition. The idea is to test the different channels where you believe volume and efficiency are attainable, in an effort to drive the most attainable results.
Think about all the marketing channels available to your business: social media, email, SEM, affiliate marketing, trade shows, etc. Plot your options in a bullseye pattern. The outer ring consists of all channels you consider to be options to promote your product or service. Think about the audience size, expense, behavior and the cost per potential lead for each channel. Choose six that you consider to be most promising – move them into the next ring – and run a test. Spend a small amount of money over a two to six-week period and see which channels provide the most leads. You will want to hit both efficiency and volume goals, but consider the quality of your leads: are these the customers you want?
As the name implies, rapid traction testing is done quickly, with channels tested in parallel, not sequentially. But be specific with your targeting and measurement with each channel. The goal is to get useful feedback and eliminate extra noise. When testing each channel, ask yourself whether the acquisition cost and customer mix is optimal for your business. Ultimately, you will end up with one to three channels that provide you the target group of customers at the lowest price.
5. Let Data Drive Decisions
Testing is critical even after your initial ramp-up. Take stock of where you are at each milestone. After the first 12 months, assess your progress toward your goals and make adjustments. Continue to track your results from each marketing channel, consider your customers and think about where you are headed. The most profitable channels may change over time. If you are looking to grow your company over the long term, you need to take the time for an unbiased approach to planning.
David Schaefer is vice president at SR&B Advertising, a full-service advertising agency in Bel Air, MD. SR&B is a proud AMA Baltimore sponsor.