April 27, 2019

The best way to spend $500k on acquisition

Brad Dunn @jesterhoax

I'm putting together a hiring plan at the moment for a team dedicated to acquisition, (acquiring new customers) . I have worked for SaaS companies before as a Product Manager, an executive, and have also in a past life spend time in Marketing and Sales, and in all that time I have seen huge amounts of waste when it comes to marketing spend, and lots of focus around activities that create a lot of noise, but not a lot of return.

Given the frugal nature, and perhaps economic creativity that exists in the IH community, if you had roughly $500k p/a to spend on a team dedicated to acquiring new customers,

  1. What kind of roles would you create
  2. And what kind of tactics and practices would you NOT want that team to focus on.
  1. 5

    I think it really depends on the growth channels that have proven to be successful so far. I'd spend ~$50k doing experiments on SEO, paid ads, referrals, etc., and then double down on the channel(s) that seems to be working best!

  2. 4

    Oh, I wish I had the luxury of $500k!

    For Ministry of Testing we currently have a budget of around $150k (basically 3 staff members) - all our efforts go into maintaining, engaging and growing the community and creating content alongside said community. We have a community manager and marketing person and then me who oversees stuff.

    I refuse to spend money on advertising. :)

    1. 1

      I know what you mean on advertising. Your approach is something similar to what I'm hoping to propose.

  3. 2

    Community and support are king. The more available and responsive your team is the greater your customer success is. I tend to double down on these resources.

    Content is Queen. Setup a proper blog (ghost, wordpress, etc). Write, write, write. Take the time to distribute those writings. Speak in terms of value to your users rather than about the product. To accelerate search visibility have your team link them from distributed content (i.e. guest posts on medium, HN, reeddit, etc). Goal is to accelerate ROI.

    Solid drip email marketing converts. I tend to contract someone who can help scale our drip email as I find it valuable. Coordinating a transactional e-mail drip works wonders. Even if all the email aren't opened there is a soft marketing opportunity / reminder in the inbox that keeps your product top of mind.

    Don't run ads for conversion. Run ads for branding. There is a duality to ads and advertising in acquisition marketing in general. The reality is that last event attribution can be easily measured however it's not taking into account all the other touch points along the customer journey which lead to that event. Running ads (retargeting specifically) for brand impressions may not lead to clicks of those ads, however there is a quality to them which allows you to maintain mindshare with someone who has touched your product prior.

    Again, all depends on what the product is. It can easily be a thing of driving phone calls and then spending on people to close over the phone (which tends to always outperform for me).

  4. 1

    If you have not read it yet, there is a book called Traction: How Any Startup Can Achieve Explosive Customer Growth by Weinberg and Mares which gives a really good inside on not only how to gain traction but build marketing efforts for the long term. Here is a summary: https://medium.com/@yegg/the-19-channels-you-can-use-to-get-traction-93c762d19339 All the best!

  5. 1

    Couldn't tell you what kinds of role I'd create. Unless you're hiring generalists, that would depend on the channels you're targeting, which would depend on both the market you're targeting and your long-term goals.

    Would what would I not want the team to do? Hmm.

    I'd avoid thrashing. Testing new channels is great, but I've seen so many founders cycle so rapidly that they abandon their most promising channels prematurely. You need to stick with things and give yourself the opportunity to do a good job, because in every channel you'll be competing with others who are 100% dedicated to it and are doing great work as a result.

    On the flip side, it's important to be able to call it quits. It helps to have clear hypotheses for why a channel will work, a means to invalidate those hypotheses, targets you're trying to hit, and an exit plan. It's so easy to get committed to a marketing channel that's not working, and yet find all sorts of reasons to stick with it. This is especially true with content marketing, where you're creating stuff that people like. For example, with IH we have our podcast and our Instagram account. If we abandoned either one, people would be upset. But they're very time-intensive, so if they they turned out to be marketing "failures" and we stuck with them anyway, they'd become a huge drag on our team's productivity. You don't want every experiment to become yet another anchor your ship is dragging behind it.

    I'm personally very averse to getting locked into external platforms. It's risky and you might get screwed. I like homegrown channels, like a newsletter, a community, etc. Some social media is safer than others (Twitter vs Facebook). Google SEO is pretty safe, too. So long as you aren't using black- or gray-hat tactics, their periodic algorithm changes will probably help you rather than hurt.

    I'd avoid long feedback loops. I like quick wins, quick feedback, so you can course-correct. That's why both content and social media are great. Ads are great, too.

    I'd avoid channels that don't fit my traffic goals. It's easy to hear lots of great things about a channel but forget that the people singing its praises have different goals than you do. For example, answering questions on Quora can work really well for small numbers, but if you're already getting hundreds of thousands of visitors, it's not going to move the needle for you. Speaking at conferences can put you in front of hundreds of people and convey a lot of trust and expertise, so it's typically better for selling small numbers of expensive products. On the other end of the spectrum, things like SEO and advertising can lead to truly massive amounts of traffic over time.

    This is all generic high-level stuff. Hard to get more specific without knowing your specific situation.

    1. 1

      This was such a rewarding response @csallen - thank-you.

  6. 1

    I built and managed a 2 manager + 21 sales team to cover the full EMEA, different nationalities/languages/cultures.
    PM me if you want to discuss as it's impossible to detail in a post.

  7. 1

    You should divide the budged on 3 segment -

    1. Social Media Marketing - Mainly focus on facebook campaign and linkedin campaign and definitely focus on other's social platform.
    2. Google AD'S - It's only cost when someone are interested on your product so it will give you instant profite.
    3. SEO of your site - It will get you long time benefit's for your company.
  8. 1

    Performance marketers. I know that are some comments here against last click attribution but I've seen how much it can skyrocket growth.

    If you can figure out your customer Lifetime Value and get a Customer Acquisition Cost (CAC) that make sense. Spend it on a good marketer/agency and put the majority of it in paid ads (Facebook, Google, Linkedin, etc).

    The benefit of paid acquisition is that it scales like crazy.