- Where to focus for your growth strategy
This post is for entrepreneurs or marketers who are trying to work out where to get started when trying to decided the right marketing channel with limited resources.
This is really important as most founders are limited by both time and money so not getting this allocation right can be the difference between life and death for many startups. Select the wrong channel and your company will run out of money before you start driving sales. Selecting the right channels can bring in much needed cash-flow and provide a sustainable and scaleable source of growth.
In this post I am going to break down how I select what channels to pursue for each project when putting together a growth plan. I will show you the calculator I use which makes comparing channels both quick, simple and as objective as possible. By the end of this post you will be able to work on what you should focus on to drive the growth of your startup.
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What we are trying to achieve
Our aim here is to identify multiple channels we should be focusing on if we are going to be building sustainable growth going into the future by taking into account both the opportunity a particular channel provides and the risk associated with it for your business.
To do this, we need to make a clear assessment of what the options are and which ones are worth dedicating our time to.
The overnight success of a random hack are great but, the reality is the hockey stick growth that you are looking for actually comes from mastering several channels which are sustainable. A hack might get you a quick win, but the odds are, it won’t last for long so by having multiple channels that have been selected carefully, you will not only be creating good foundations for growth by maintaining focus and building deep domain expertise, you will also be hedging for risks that come with jumping on random “hacks” you come across.
I have decided to talk about this early on because as I get asked about “where to start?” on a regular basis but, as I get into talking about optimising funnels I want to be sure that people are working on the right opportunities for them, rather than simply following what is cool, right now.
I came up with this process as a result living off of one source of traffic but also to help in minimising the time needed to get up and running. It also helps when explaining a decision making process to a client.
What this is good for
This process is really powerful if you have no idea where to get started and want to be planning for the longer term growth for your business. It can also be useful when you have very little experience of a particular market and need a framework for comparing opportunities.
While this process will simplify things in terms of decision making, like any calculator it’s only as good as the data that you feed it in the beginning. So if you are filling in the cells with random guesses, you might not come be presented with the best conclusions. Having said that, this can’t be an exact science so you will need to go with your gut if you can’t rely on a trusted source of information.
What it does
Like any actionable process, you need to have a list of the options and a clear way to identify which tasks are the priority so you know which ones to action first.
The challenge here is, when analysing different customer acquisition channels, there are lots of options (which seem to be growing daily). In addition to the number of options, we also have to consider that you can compare them against each other in multiple dimensions.
For example; do you want a channel that is quick to setup but can be expensive in the long term like PPC? Or, do you want something that is “free”, but leaves you exposed to the whims of something external like optimising your website to rank higher in Google?
…this is a tricky decision to make when comparing the two but when you have more than 20 channels to explore all of which will need building and optimising over time, you want to be sure that you are making the right decision.
To overcome this challenge when working on new projects of my own or for clients I decided to create a tool that would simplify the process which I refer to as “The channel analysis tab”. I promise you it’s more interesting than it sounds…
This calculator can be used to compare channels and strategies as it boils them down to a few key elements that make them easy to understand at a glance. You are instantly able to see what the potential Return On your Investment might be and it also applies a “Risk Score” to the opportunity.
Estimating the ROI
While there are many reasons to run marketing campaigns from driving brand awareness to repairing a reputation, I am going to assume you are hear for getting a Return On your Investment. So the ability to get a rough idea of how much you could potentially make back is important.
Estimating the Return On Investment is obviously a tricky process when you are starting out. This is why we are not trying to focus on fixed amounts delivered by a particular campaign but but to see how it might compare to another in both a “best” and “worst” case scenario.
To work out the potential ROI we take an educated guess at a few key numbers…
As difficult as it is to estimate what your ROI might be is being able to understand how risky a particular option might be. Again, this is not an exact science, we are simply trying to clear up a decision making process to compare how one thing might stack up against another.
To get a lear understanding of how the tool works, please watch the video below:
When to use this calculator
Most people’s instincts will be to use this is soon as possible. This is not always the best thing to do. Ideally you want to use this calculator once you have already created your customer profiles/ Personas. Creating the persona’s first is an important step because you want to ensure that you are looking at channels that are relevant to your ideal customer.
Images here: https://www.notion.so/Selecting-Customer-Acquisition-Channels-3c00ca27cbaf4595928a72c9410c67be