A Systematic Approach to Building a Customer Acquisition Engine
Quick note: I’m sending out a regular post instead of a Tuesday Roundup because I wanted to introduce the topic of my next webinar. The Tuesday Roundup will resume next week.
In my conversations with founders, customer acquisition is usually at or near the top challenge because they don’t know how to crack growth. They typically find themselves doing random things they think will work. They implement different tactics, but there’s no structure holding it all together. This article puts it all together into a scalable, repeatable process.
The key to successful growth marketing is to build a system with an overarching strategy rather than random individual tactics. This post introduces founders and their companies to a systematic approach to creating a growth engine. I’ll dive deeper into the approach in a free webinar next week.
When I started TheraNest/Therapy Brands, I did not have the funds to build a marketing team or spend a lot on customer acquisition. I knew my biggest risk was customer acquisition, not product development. Given limited funds, I believed hiring a marketer could be a company-killing endeavor if I got it wrong. I knew what to look for in a great software developer, but I wasn’t sure how to hire a marketer. So I focused on building my skills as a growth marketer and chose to partner with an outsourced engineer on product development. Over time, I acquired growth marketing skills from books, webinars, videos, and practice. This framework is what became apparent to me as I put together all the tactics I learned from various sources.
Here’s a common approach by companies without a growth system: “Well, company X does Facebook Ads, so let’s start doing them.” Or, “SEO is important, so let’s start creating content that will rank.” The problem is that if your marketing consists of randomly trying to see what will work rather than building out a system of experimentation and optimization over time, you’re doing it wrong.
The goal is a predictable, repeatable, and scalable routine for acquiring customers and nurturing prospects. A growth engine comprises a set of projects and tasks that are then enhanced, expanded, and repeated based on data and best practices. This means that acquisition channels may change, and the tactics within channels may evolve (we’re all familiar with the constantly changing algorithms). What doesn’t change is the routine of experimentation, publishing, measuring, and optimization.
The Foundation of A Continuous Growth Loop
The foundation of your growth engine starts with clarity about your ideal customer, a high-quality product, and the unique differentiators of your product. Your ideal customer persona will help determine your initial growth channels and the marketing funnels you feed traffic from those channels into.
Growth marketing is a well-defined combination of channels and funnels built and optimized over time. Your customer persona and the chosen channel(s) will determine messaging and tactics within each channel and funnel. Set metric goals and expected outcomes for each channel to track; the same goes for funnels. This interconnection creates a continuous growth loop. There are several important metrics to track per channel. Depending on the channels, some well-known metrics include cost per lead, click-through rate, conversion rate, first-page keyword ranking, open rates, likes, and follows, among others.
The Channel
Once you’re clear on your customer, you must find where they gather. Research and compile a list of where your customers congregate in large numbers and how to reach them.
Think – if I were just going to reach my ideal customers, where do they hang out? Do they gather in Facebook groups? Are they meeting each other in Reddit threads? Is the average customer typically starting their journey with a search? How will they describe you or your product? Answering these questions is crucial in selecting your first effective channel. Select your focus channel from these congregation points.
My recommendation for the earliest stage is to pick one core channel to drive traffic to your site and landing pages. As you grow, you’ll expand to other channels. But to perfect your marketing engine, you should narrow your focus to one channel and execute that channel very well.
A better option if you have the bandwidth is two channels: one for direct or performance marketing for short-term transactional customer acquisition and another for long-term prospect nurturing that focuses on capturing emails and/or followers.
With your focus channel selected, set target metrics for each campaign in your channel and measure them at set periods, typically after 5 to 7 days from launch. Get best practices and benchmarks for each channel and use them to guide your target metrics. Don’t set and forget. You’ll systematically and periodically learn from and optimize every campaign based on data.
The Funnel
Next, you need to build funnels for your campaigns. This is where the customers will go once you’ve gotten their attention and they’ve responded to your call to action. Every campaign must end in a funnel. For example, suppose your Facebook ads take your customers to a landing page to start a free trial, and the prospect initiates a free trial. In that case, the prospect ends up in your free trial funnel, hopefully becoming a new customer.
If your campaign is a nurture campaign, say with a lead magnet to capture emails, the campaign should end in a nurture funnel to build a relationship with the prospect over time. A nurture campaign aims to populate a funnel full of potential customers you can reach out to in the future to bring them into the transactional funnel and turn them into customers. You can create and deliver content in different ways, but make sure it’s relevant and tailored to give someone a compelling reason to enter the transactional funnel at some point because you’ve delivered significant value. Think of nurture funnels as going on a date. You’re not getting married yet, but you are looking to impress, be loved, and be appreciated...you get the message.
Always start with two funnels, even if you only have one channel. The transactional funnel is your direct sales funnel. You’ll book demos, get trials, and close sales here. As you move customers through your transactional funnel, many will not convert. If someone doesn’t convert, move them to the nurture funnel. This is how you create the growth loop.
Just like with your channels, each funnel campaign should have goals and metrics associated with them. Track your progress and define how you will continuously iterate on each funnel.
Interrupt, Connect, Offer: The Core Components of Every Campaign
For every campaign in your channel and funnel, focus on three things to get results.
The first is your hook. The hook is your interrupting mechanism that catches your prospect's attention long enough to listen to your story.
The second element is connection. The job of your story is to help connect with your customer and the problem your product is solving or the outcome you are creating for them with your problem.
Lastly, you need an offer. Your offer is the brand promise, guarantee, and value you present to your customer. With almost every campaign, email, ad, and content you create, you need to be clear these three components are represented in the campaign journey from beginning to end.
An example is a Facebook Ad with a compelling graphic and message to stop the prospect from scrolling and a story or messaging that connects, either on Facebook or the landing page you send the customer, and the offer will be the combination of pricing, guarantees, bonuses, etc. that compels the prospect to take the action you want. Always be clear on these three; otherwise, you are just hoping without clear metrics.
As you measure your metrics with each campaign, know which of these three components you need to tweak to improve results. For example, if you get clicks but not trials, you may have a great hook but no connection or compelling offer. Each component has metrics that help you gauge how effective you are. In the case of emails, your subject line (open rate) is the hook, and your email content (or click-through rate) is the connect. High unsubscribe rates mean you’re failing on the connect.
An Overlooked Funnel
Funnels don’t end with subscription conversions or closed sales. They continue through the full life cycle of the customer. You also need a customer funnel. The customer funnel goal is your engine for retention, referral, and upsells. This funnel is essential for revenue expansion, ARPU growth, margin expansion, and using your customers to drive word of mouth and referrals.
This article will help you start your growth engine development, but there is much to learn. Tactics change, new platforms come on the scene, and algorithms change. You have to stay ahead of it all. The good news is that this framework will always work regardless of those changes.
While this blog gets you started building a marketing system, I’ll be doing a deeper dive in a free webinar to bring it all together. Register here to learn how to put it all into action and build your engine. We’ll discuss:
Picking the right channel for your growth engine
Figuring out the right tactics per channel
Simple ways to determine customer acquisition costs
Measuring results and iterating
You can also post your questions below, and I’ll try to answer them during the webinar.