Marketing where your competitors do is expensive, especially if they’ve raised a bunch of money. You’ll both constantly bid up prices and there will always be at least one other player in your potential customer’s consideration set when they are evaluating your product.
When you’re working to get your first 1,000 customers, you want every advantage you can get. If your product is compared side-by-side to your competitor’s, it will probably lose:
- They have more features
- They can undercut you on pricing
- They have a big customer success team
- They have strong partnerships
They can also afford to spend more on marketing because they’ve either raised money or have nailed their CAC:LTV, i.e. they’ve already been through the “marketing experiment” stage, have built a brand and understand their churn and unit economics really well.
Let’s talk marketing channels for a minute. Most places you’d think to market your product to potential customers are already saturated and too expensive to touch unless you’ve achieved some sort of predictable scale.
Take Google Adwords for example. Most keywords with good search volume and medium/high competition will cost $5–15 per CLICK and if those keywords perform, the law of supply and demand will keep pushing that cost up over time.
If your typical visit-to-customer conversion rate is 5%, that’s a $100-$300 customer acquisition cost. And that’s not even fully loaded. If you’re a SaaS business you earn that back over time not upfront, so you’re constantly siphoning out cash towards new customer acquisition while your payback period just to recoup your marketing spend could be 12 months.
That’s fine if you have a few million bucks in the bank and can afford it, but marketing channels like Google Adwords are similar to crack cocaine — once you get a hit it’s very hard to kick the habit, because with the right keywords, landing pages and pricing, it scales almost linearly to produce a predictable ROI where $1 in equals $x out all day.
If you don’t have a heap of cash in the bank and would rather not have to go up against your competitors directly to win a new customer, what can you do to get your first 1,000 customers and the formation of something that might resemble hockey stick growth?
You need to invest in marketing where your competitors aren’t, or where they wouldn’t even think to go.
Why? Two big reasons:
- Less competition
- Lower acquisition cost
The first thing you want to do is a competitive analysis of where your competitors are currently investing in marketing and finding new customers.
To do that:
- Use Keyword Spy (for SEO/SEM keywords but also top referring sites)
- Google their name and go to the news tab to read their press releases, stories and interviews written about them, etc
- Crunchbase to read about funding, use of funding, etc
- Follow them on Twitter and see what they tweet about (look for contest links, partnerships, etc)
- Read interviews with their founders or VP of Marketing
- Subscribe to Google trends
- Go on iTunes and search for their company name to see if there are any books or podcasts about them
Map it all out for at least your top 3 competitors. Most companies do the exact same thing when it comes to marketing, so don’t be surprised if their marketing channels are 90% similar.
Now you want to overlay where your potential customers spend time (online AND offline).
- Which web sites do they visit?
- Where do they get their news?
- How do they learn about new products?
- Which industry experts do they follow?
Don’t know? Ask them via a survey or even inside your product or web site using Intercom.
You can then overlay that data against where your competitors are spending their marketing dollars and look for the places your customers are but your competitors aren’t.
A few examples:
- Your customers might say they found you through a recommendation from an influencer in your industry who reviewed you — reach out to them and try to build a relationship so they talk about you more
- Or they might have read one of your answers on Quora, so spend more time (or hire someone) answering questions related to your product on Quora
- Or someone they know might’ve referred your product to them, so build an incentive program to encourage word of mouth
- Or they viewed your presentation on Slideshare and then arrived at your website where they became a customer after a free trial
- Or they might’ve read one of your posts on Medium, started following you and then decided to use your product, so write more on Medium
These are all examples of ways you can own the conversation and be the only product in the consideration set. Compare that to Google AdWords, for example, where you’re one of 15 products to choose from.
After you’ve figured out 1) how your existing customers found you and 2) those channels where it was just you and not your competitors, you want to run lots of little marketing tests on those channels.
Competitors aren’t there either because they’ve tried them and they didn’t work or more likely they’re just running the same marketing playbook that everyone else does.
Make sure you track visitors from the channels you test, all the way through to conversion. It can be as simple as tracking links through Google Analytics or even using conversion pixels from Facebook Ads, promoted tweets or Adroll.
You need to know CAC and conversion rate per test and also the headroom you have to increase spend/time on that channel if early signs look promising.
You want to test 20–30 channels and over 30–90 days figure out the handful that show the most potential that you can focus on. Extreme focus on a small number of channels will produce the best, more affordable and most predictable results.
“But if potential customers find me, won’t they start to look for competitors before they buy?”
9 times out of 10, no. If your product meets their need, is priced relative to value and you provide a way to de-risk their purchase (returns guarantee or free trial), they’ll go ahead and pay for it.
For most founders, this is counter intuitive. If we find a product that looks good, we’ll go and check out the competitors. But I tell my team this all the time — don’t assume your behaviors map to your customers, because in most cases they don’t. Finding and buying a product for your customers is a pretty simple process. They don’t over think it and you shouldn’t either.
One final tip that I learned from Jay Abraham — apply customer acquisition and marketing strategies from other industries to yours.
For example, if you sell software then look at what retailers do to get new customers. See if any of their marketing methods could work for you. This is a simple concept but it’s game changing if you spend enough time experimenting.
When it comes to marketing you need an advantage. And the best advantage is one where you’re the only player in contention for your customer’s dollars. Don’t compete with Goliath when you’re not ready. Instead, redefine the landscape. Go where your competitors aren’t.
Article copied from here.