Customer Acquisition Strategy for Startups
Startups have the multi-faceted challenge of creating interest in an unknown product, converting that interest into revenue, and growing rapidly while maintaining financial stability. Each of these tasks is an art unto itself, but the one that stymies most founders is the first. Customer acquisition is the first test of a startup’s viability – not to mention the evidence your investors need to continue funding the business.
Customer acquisition for startups can be visualized as a 3 stage process:
Customer Acquisition Strategy for Startups
In the Lead Generation stage, startups select the channels that are likely to acquire the most new customers at the lowest cost and allocate their marketing budget judiciously.
In the Lead Nurturing stage, the marketing team distributes content to prospects and customers already familiar with the business, such as email and social media, to develop further interest and familiarity with the product.
In the Sales stage, the sales team builds a relationship with prospects through conversations, case studies, and presentations, converting them into customers.
Lead Generation for Startups
Lead generation is one of the most challenging phases of customer acquisition for startups. During lead generation, prospects often know little about the product or company, often knowing only that they have a problem that needs to be solved. Optimizing the lead generation stage of customer acquisition requires that you understand the motivations that drive your prospects, allowing you to not only address their needs but also determine which marketing channels are most effective for reaching them. The best way to do so is to create customer personas.
Customer Personas for Lead Generation
Customer personas are in-depth summaries of individuals, often fictional, who are representative of key segments of your target market. An effective persona will answer:
- What industry do they work in, and what type of company do they work for?
- What is their position, title, and main responsibilities?
- Are they the primary decision maker, and if not, how far removed are they from the primary decision maker?
- What challenges do they face that would be solved by your product?
This information can then be compiled into a description such as the one below:
This persona allows you to tailor your marketing to your target audience by focusing on their specific pain points and using the tone that will best speak to them. Understanding your audience also helps your marketing team decide which lead generation channels to pursue—a major decision when operating with a limited budget.
Selecting Lead Generation Channels
There are three primary factors your marketing team should consider when selecting lead generation channels to invest in:
- Which channels will connect with the audience laid out in our customer personas?
- What ROI can we expect from each channel?
- How quickly do we need results, and how much ROI are we willing to sacrifice for speed?
As a general rule, inorganic channels such as SEO or organic social will provide higher ROI but at the cost of a slower lead-up period, while inorganic channels provide fast results but suffer from costs that grow in proportion to their success. The table below summarizes the key details of the 5 most popular lead generation channels for startups:
Startup Lead Generation Channels, Compared
|Lead Generation Channel||Time Until Results||Average ROI||Notes|
|Thought Leadership-based SEO||4-6 months||748%||Combining thought leadership and SEO is one of the highest ROI marketing channels, particularly when content is also repurposed to help nurture leads. It is relatively resource intensive, however, and can be difficult for startups to manage in-house.|
|Informal Networking||12 months||691%||Networking can be extremely valuable for B2B startups in particular, as in-person connections build trust and result in shorter sales cycles. It is very slow, however, and travel to conferences and events is often expensive.|
|ABM||6-8 months||Highly Variable||ABM can help secure high profile contracts with well known companies, which in turn helps startups build much-needed authority. Campaigns are relatively risky, however, with significant resources dedicated to attracting a very limited number of prospects.|
|PPC||1 month||36%||PPC provides fast returns and can help startups build name recognition, but can quickly grow expensive as costs scale directly with leads generated.|
|Email Marketing||2 months||24%||Effective mailing lists take time to build but provide a relatively low-investment way to supplement lead generation.|
Lead Nurturing for Startups
The next stage of startup customer acquisition strategy is to engage with and nurture leads until they’re read to commit to a purchase. The best way to accomplish this is through creating thought leadership content that speaks directly to their leads, building trust and establishing your startup as a valuable resource.
This content can be distributed across a variety of channels, the most common of which can be found below:
- Your website’s blog or resource center: Over time, your website can become a valuable resource for your prospects. Being known as an expert source of information about an industry results in warmer leads, lowering CACs.
- Organic social media: Social media channels can be used to share the key points and infographics from your long-form content, and remind your leads of your product’s applications.
- Webinars: Webinars create opportunities to personally engage with your audience in a high-trust setting, and can be built by expanding on your most successful thought leadership content.
- Email drip campaigns: Email campaigns can reactivate cold leads, and are most effective when tailored to your specific audience. Because your team will have more information about leads at the nurturing stage, they will be able to create more precisely segmented email lists
Once a lead has been sufficiently nurtured, they will be ready to discuss committing to purchasing your product and reach out to your sales team. The more effectively you’ve nurtured your leads, the easier time your sales team will have convincing them your product is suited to their use case.
Sales Optimization for Startups
The sales stage begins once leads have made contact with your sales team, and are actively discussing the possibility of using your product. This is the last stage of customer acquisition, and as represented in the image below, often the shortest:
As with lead nurturing, sales can also be aided through content. Once a lead has entered the sales stage, your team will know exactly who that lead is and have a reasonably precise idea of what their problems are, allowing you to further customize content at this stage. This content most commonly takes the form of case studies, presentations, and reports customized to highlight the problems and solutions most relevant to each lead.
Startups should also invest in sales management software or a CRM to further improve their overall processes. The two most popular, Hubspot and Salesforce function as both, allowing teams to track leads’ progress throughout the entire sales funnel while also providing automated follow-up reminders and analytics. Of these two, Hubspot is generally regarded as more user-friendly out of the box, while Salesforce offers more functionality and customization.
Getting The Content You Need for Customer Acquisition
The biggest challenge that startups face in their customer acquisition strategy is having enough in-house resources to tackle all three stages. As a result, many startups will partner with an experienced marketing agency that can help them optimize one or all of the above funnel stages.
First Page Sage has over 13 years of experience working with startups to provide content-focused lead generation and nurturing services. If you would like to learn more about how we can help you develop and implement an effective customer acquisition strategy for your startup, contact us here.
Evan Bailyn is a bestselling author and award-winning speaker on the subjects of SEO and thought leadership. Contact Evan here.