If you’ve started a company, there are chances that you can build a successful business. While you start distribution or sales, the common stories go like – you care too much about the product or sales efforts and ignore the rest; or you spend time tweaking the product based on what the early adopters say, only to find that you are not receiving enough customer traction. What should you do to acquire customers now?
Complete focus on product development or customer acquisition usually doesn’t work well because you end up burning a lot of capital building a complete product or wasting a lot of time convincing customers, eventually missing the problem-solution fit. If you focus on what your early adopters want, you could – miss creating a viable business model, finding volumes and burn a lot of money as you pick a niche or you could end up in a perfect competition space, missing product-market fit.
Gabriel Weinberg and Justin Mares in their book “Traction” suggest that founders should spend time constructing the product and testing traction channels in parallel from the very beginning that will help you get holistic customer feedback so that you may focus on mending the gaps in the product as well as carve the learnings into the product. Also you will be able to quickly understand which acquisition channel is favourable for your business.
The authors highlight that growth happens in levels. As you start testing customer acquisition channels, the growth will spike as a useful channel is identified. With time, the channel will lose its sheen and you would have to look for another avenue to level up. A qualitative matrix that maps evidence of product engagement will be helpful in tracking developments. But which customer acquisition channel should you choose first?
Running cheap tests will help you evaluate most promising ideas. Acquisition cost, volumes and relevance should be a priority here while the objective should be to only validate your assumptions. Once the core channel is identified, optimize your growth until it becomes ineffective due to saturation or rising costs. Your next acquisition avenue will be built on your core strategy and hence pursuing one stream at a time is beneficial.
After you have identified the channel that works for your business, on what grounds would you create a channel strategy? It’s important to note that you should always have a clear goal you’re working towards. It could be 1000 new users, 200 paying customers or 5 percent share of your market. Your strategy should directly relate to your goals and your goals are dependent on your business agenda. Another important fact – as agendas evolve, strategies evolve. So keep experimenting and reiterating.
An example of a quantitative matrix is given below. You could have different metrics and measure different dimensions based on the business you are in. Ideally such funnels are helpful to have a focused strategy as each sub-goal would have unique measurables which eventually leads to understanding of results basis channel efforts.
Inspired by the guidelines shared by the authors of the book – Traction, a customer acquisition framework is assembled below to highlight the areas you could work on while looking for a problem-solution fit for your business.
There can be changes in channels vis-a-vis stages for different businesses. Testing and analysing results will help jot down an accurate framework for your business or industry.
Implementation will be the key to unlock the path to customer traction!