A living guide
Last updated: 3.8.21
This post is about getting new customers for a startup.
It provides a framework for long term customer acquisition success through growth marketing.
What is growth marketing? There are a number of definitions out there, but here’s how it’s defined for this guide:
Growth Marketing: Using highly measurable, ROI-driven customer acquisition, engagement, and retention experiments to increase conversions whether it’s a paying customer or an email list signup.
Growth marketing combines components from both marketing and growth.
It's more data driven and technical than typical marketing work, but less technical and product driven than typical growth work.
This post is focused on customer acquisition, but future posts will cover onboarding, retention, and other topics.
Why this guide?
While there’s no shortage of writing on growth marketing, it’s all very focused on short term tactics.
There just isn’t much content from a strategic, long term view, so I wrote this guide to share what I’ve learned running growth and marketing for startups and to improve my own knowledge.
Growth Marketing Strategy vs. Tactics
Your growth marketing strategy is the business’s overall plan for reaching potential customers and turning them into new customers.
It identifies who you’re selling to, how they like to buy and what to say to them to get them buying.
It helps you maintain relevance and consistency across each interaction with your audience while your tactics ensure that those interactions happen.
Strategy is about the long term while tactics are short term projects. Strategy rarely shifts while tactics can change frequently.
Each component of a growth marketing plan can influence other components, and good strategy makes sure all the parts fit together.
The components you need to start acquiring customers:
Target Audience: The group of people you’re marketing to, including both your customers and people you want as customers.
You have a product to market and now you need an audience to target. You have the entire potential audience for your product, but your current product only serves a portion of them.
And out of that group, you’ll have different sized segments you can create by slicing and dicing based on different characteristics.
All of these potential audiences require some minimum level of marketing personalization to be convinced to buy your product.
Defining your audience
The larger your audience segment, the more variation it will have behaviorally, demographically and culturally and the more viewpoints you need to consider.
This increases the tradeoffs you have to make, decreasing the amount of personalization you can do, making your marketing less effective.
You wouldn’t sell a product to the CEO of a company the same way you’d sell an individual contributor nor would you sell a tool to small businesses the same way you’d sell to the Fortune 500.
The more tightly defined your audience is, the easier it is to market to them.
As a thought exercise, imagine selling to one person and only that person. You’d quickly know them so well you could guarantee a sale every single time.
A more tightly defined audience allows you to learn their needs and concerns faster.
Some audiences are easier
Some audiences are just easier to market to than others.
They’re easier to:
As you’re deciding who to target, take into account these aspects for the different groups.
Research your audience deeply
To persuade people to buy from us, we need to know the needs and concerns that drive them to become a customer or buy the competition.
Different groups have different buying processes and are trying to fulfill different needs and wants. The better you know your target audience, the more effectively you can market to them.
By knowing how your audience thinks and behaves your marketing is more likely to reach them in the right place, be relevant in their world and increase their trust in you.
What to research:
Funnel: A series of steps your audience goes through to buy from you or interact with your business in another way.
Funnels provide a very helpful structure for optimizing the steps in your buying process to drive more conversions.
A funnel step can be entering credit card information, using a feature in your app or clicking on an ad.
Improving your conversion rates is about reducing or increasing friction.
Reducing friction increases the number of people who convert to the next step, but can result in lower conversion rates farther down the funnel and lower quality customers overall.
Increasing friction is used to increase the quality of conversions to the next step.
The more expensive a product and intensive the sales process, the more a company should qualify a customer before spending the resources to really sell them.
AIDA and AARRR
Both marketing and growth have high-level funnels used for strategy.
For Marketing, it’s AIDA:
For Growth, it’s AARRR:
AIDA captures the stages a customer goes through up until acquisition and AARRR starts with acquisition and ends with customer referrals.
Take both these funnels into account for a more strategic look at the health of your business and opportunities for optimization.
AIDAR and Growth Funnels help with monitoring the health of your business, but aren’t helpful for optimizing a specific ad campaign. For day-to-day optimization, you need much more specific funnels.
For example, these are typical funnel steps for an ad campaign:
Positioning: The process of finding the place in the market for your product that highlights your competitive advantages.
The goal of positioning is to occupy a unique corner of your market that plays up your strengths and downplays your weaknesses. The components you need to consider for your positioning are:
These components all influence each other, making positioning a difficult process.
Even the best positioning is a series of tradeoffs.
Your real competitors
Customers think about products and brands in relation to other products and companies.
There is no position without competitors to place it against and a market to place it in.
Determining who your actual competitors are is a common place for startups to make mistakes.
Some common mistakes:
Positioning creates assumptions
You position your product to create assumptions among your audience.
Good positioning creates assumptions that are both true and highlight your strengths.
Highlighting strengths that aren’t true may help you get the initial sale, but will lead to unhappy customers.
Position your product against enterprise companies and customers will assume it’s for large companies even if it’s built for small businesses.
Positioning is a massive growth lever
Positioning creates an anchor that many aspects of your downstream marketing are attached to, informing components like your product roadmap, marketing campaigns, and product pricing.
Position your product poorly, and it won’t matter how good the rest of your marketing activities are.
Messaging: The key points supporting your positioning that you break down into your copywriting.
Messaging refers to how a company talks about itself and the value it provides. Your messaging provides a foundation for campaign themes and guides what your ads say for example.
Building out your messaging structure starts with your primary message, which is informed by your branding, positioning, and the audience you’re targeting.
Your primary message is an elevator pitch that contains your product’s key messaging points.
Key message points
Key messaging points should be clear and concise, use language your audience understands, and differentiate your product while going through the key benefits you offer.
Key messaging points are supported by proof points, or the evidence that makes your messaging points true. This can be a product feature, an industry expert quote, or an award.
Good key messaging points include believable information relevant to your audience and address how they help customers meet their goals.
Messaging’s first job is to inform and its second is to build trust. You build trust by showing you understand your audience and their situation.
You do this by addressing their concerns and using scenarios specific to them on your website and through your buying process.
Copywriting is the end result of building a messaging structure and it touches on many areas of marketing, whether it’s your marketing website, ads, or blog posts.
For effective copywriting:
Marketing site: Your public web pages under your main domain like your Homepage, Features page, and About page.
The purpose of your marketing site is to inform people in your target market about your product and influence them into buying.
Any significant marketing effort will drive folks to your site who aren’t in your target market. A good website will filter them out early so you don’t waste resources on them.
Three levels of information
Potential customers will go to your site in different stages of their buying process. Consider the three levels of engagement based on what stage they’re in.
The more information you have on your website, the:
A good marketing site builds trust. You want to remove the unknowns in a potential customer’s mind while building your product’s credibility as the right solution.
You get this done by:
Showing that others like it as well with:
Customer acquisition: The process of converting your audience members into customers.
How do you get new customers? Once you have a website or landing page that builds trust, it’s time to research which channel will drive quality customers and can be scaled.
The major online acquisition channels are:
Every channel has a minimum investment required to be a significant source of traffic or sales. Strong competition increases the requirement.
It’s easy to underestimate how much work or money you need to put in a channel to get good results.
When the investment is underestimated, it’s easier to justify working on more than one channel.
You’re far better off putting a quality effort into one channel than splitting your time and money across three. Many tactics don’t carry over from one channel to the next.
How to pick a channel
Every channel has tradeoffs and some are just a poor fit overall for your business.
Business products perform poorly on Snapchat and Tiktok, but well on Twitter and Facebook, while consumer products can sell through all three but bomb on Linkedin.
Measure each channel you’re considering by:
How to get good at a channel
As channels become more competitive, your growth with that channel will slow.
To stay competitive in the short term, watch for new features in the channels that are working for you.
To stay competitive in the long term, keep an eye on emerging channels.
Experiment: The test of a growth marketing hypothesis, typically at the tactical level with a control.
A/B tests dominate startup experiment conversations, but they’re only one part of an experimental culture.
Many initiatives don’t make sense to be A/B tested, but still benefit from an experimental planning process.
The elements of good experiment strategy:
You'll want to follow the Question-> Hypothesis-> Test-> Analyze process of the scientific method for your experiments. This simple structure helps minimize bias and drive consistency.
Start with small experiments
Keep your experiments only as big as they need to be to test your hypothesis, which often means focused and small.
The smaller the test, the less work to launch it which means less risk and faster testing and learning.
Earn your way up to larger tests by successfully implementing smaller tests.
This applies both to getting tests built as well getting the necessary buy-in from stakeholders.
Many dream of that one A/B test that drives explosive growth, but the reality is that strategy is more responsible for significant growth long term than any one idea.
And while you can’t predict the future, running impact assessments can expose planning mistakes and provide more guarantee around outcomes.
Have processes for:
The factors to consider for individual tests:
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I have run growth and marketing at startups like Heap and Periscope Data (acquired by Sisense), helping to generate millions in revenue. Marketing education is a passion of mine and I'm building products to help people grow startups faster.