Customer Acquisition for Startups – Our No-Nonsense Framework

Customer acquisition for startups is often a challenge. I’ve managed significant marketing budgets to attract clients online. Here’s a strategy for fast and effective customer acquisition for startups and growth firms:

Customer acquisition for startups

The Issue: Many businesses are too focused on their product to think about distribution. How will you attract clients? There is no single answer to this difficult question.

What are your choices on customer acquisition for startups.

There are three methods of customer acquisition:

1) Viral, product-led growth including content marketing,

2) Paid communication including promotion of brand content, and

3) Unpaid (SEO, User generated content (UGC), Public relations etc)

Everyone wants to create a product that is so good that it attracts users by itself. This is a rare occurrence.

Paid advertising

Many companies are hesitant to invest in marketing since it is easy to lose money and end up with no solutions. Here’s how it usually goes: They begin to lose money and become concerned. Pause. They transfer to a different platform. The same event happened once more.

Paying for customer acquisition, on the other hand, can be a powerful tool:
Find your top consumers > Improve your product > Model out the cost of expansion > Refine and scale quickly > Identify winning message / value propositions.

Who this guide is for?

You have a product or service that people pay for, you have a marketing budget of at least R100 000 per month (this amount varies depending on price point and conversion rate) The best case scenario is that you have enough money to test and learn all the time.

 Our high Growth Customer acquisition Framework

There’s a reason Google and Facebook account for more than half of all digital advertising revenue.

Customer acquisition for startups - google - facebook

a) Customers who use Google have the highest intent. Facebook has the most effective ad targeting platform with the most users. These two resources will provide you with all of the information you require.

So you bought traffic, now what? Once you have users, you must evaluate three factors:

  • Are you attracting the right users?
  • Is everything tracking properly (if not, you’re wasting your money)?
  • How many users are required to reach a conclusion?

b) Aim for 50-100 conversions if you’re receiving conversions at 1-4x your breakeven value. Focus on pre-sale events like add to cart, account creation, and so on if you’re not seeing conversions. Upper funnel metrics can be used as less expensive proxies for optimization.

Customer acquisition for startups - funnel

c) The range of possibilities:

Your revenue is higher than your ad spend (unlikely. If so, you’re awesome)
Your revenue is less than your advertising spend (most likely)
No income at all but a lot of advertising spend (worst case)

d) Consider the worst-case scenario:
Nobody purchased or converted. You still have a lot of information. How many people clicked on your ads? Which campaigns were the most popular? How much did it cost you to get someone to visit your website or download your app? Where did people drop off in their engagement with you? Is there something we can learn here and improve for the next round of promotion?

e) Use these “upper funnel” metrics to guide ongoing adaptive testing in the absence of conversions. If you notice a difference in ad performance, focus on what worked. Re-design a step if you notice a significant decline in user engagement after it.

f) Paid marketing is a continuous process.
You may buy as much fast feedback on your product as you desire with paid marketing. Obtain some information. Take notes on the data. Improve your product, website, advertisements, and so on. Get more information. Choose what to do next based on what you know now.

Predicting a profitable path

You may figure out what inputs you need to get profitable once you have a decent number of conversions. As you collect additional data, you will refine your model. Let’s have a look at an example:

Consider the following scenario: R10,000 spent on advertising – 5,000 visits R (R2 CPC) – 250 conversions (5% conversion rate, R40 CPC), R20 lifetime value per conversion So you’ve spent R10,000 in order to earn R5,000. Is it frightening?
This is actually rather fantastic.

Why is 50 percent ROl so great?
To break even, simply multiply your effectiveness by two. A 2x improvement should be rather simple at this point. We can virtually double our effectiveness by improving three variables by 25%. Alternatively, consider doubling your pricing.

Consider user acquisition to be a machine.

Each conversion step is a component of your machine. Improvements to any aspect of the machine will enhance its overall efficiency and bring you closer to profitability.

Let’s summarise

The 1st Customer Acquisition Content Framework – Begin with Google and Facebook – Split your budget – Measure everything – Model a route to profitability – Double down on what works – Iterate – Scale

If you need support and want to find out more about our digital marketing services – or want to take advantage of a free conversation with our SEO consultants, contact us for a free consultation with a member of our team.

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