Customer acquisition but broken down by company stage
And guidelines on how to hit that growth escape velocity
Over the past week, I’ve encountered a range of growth problems but mostly revolving around the most optimal customer acquisition channel. Companies fail because they’ve either failed to identify the best distribution channel for their product or spent too much money on multiple channels too soon.
Overall, it’s a function of the stage of the company, your target market, and the problem you are trying to solve.
For early-stage companies:
Companies in this stage are primarily looking for early adopters who can try the product and provide valuable feedback that helps you improve the product offering. It lets you validate the idea and gain early traction in the target market segment. This is the stage where you are kick-starting your growth engine.
If you are in these early stages, your customer acquisition efforts should entail sharing the product with friends and colleagues or sharing it in communities where your potential customers hang out, creating content on platforms that are commonly accessed by the target user persona, and doing 1:1 cold outreach to potential product testers.
For post-Product-Market fit companies:
If you’ve found the initial product-market fit, you must now capture a sizeable TAM (total addressable market). You probably have funds to prove your business and growth model at this stage. This is where you start the journey to validate your first product/channel fit. Depending on your product and target customers, paid ads, product virality, partnerships, SEO, and sales, are common strategies.
For companies in scaling mode:
Companies in this stage are looking to accelerate growth. They want to reach larger customers, expand to adjacent use cases, or expand to newer geographies. Customer acquisition tactics deployed in this stage depend on what has been tried previously and layering on additional channels. Higher spending channels such as sponsoring trade shows, hosting events, and adding more channel partners are common tactics companies deploy at this stage.
Remember that these channels have helped many startups achieve better distribution and customer acquisition. However, the channel that works for your business will be very specific to YOUR business and the target market. NOT all channels mentioned in each stage are to be deployed in tandem.
You must validate that a channel works for your business quickly before doubling down on it. This is where setting appropriate success metrics and experiments helps.
Once you validate that a channel works, you must double down on the channel before spending resources on discovering another growth channel. This means deploying all your engg, product, success, and marketing resources to work cross-functionally till you start seeing diminishing returns.
Once a channel has been saturated, you should layer other channels to drive further growth and scale.
PS: Don’t forget Retention! All of the above without a product that retains customers is not sustainable. Ideally, you want a product that retains and acquires without spending incremental dollars on that channel. Remember loops, not funnels.
#growth #acqusition #startups
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