In less than half a year we were able to maintain a weekly 10% growth by following lean marketing and data driven decision making principles. Although the service had to be ceased for 150,000 users because of an unsuccessful fundraising round, the learning is invaluable. I will share it now, starting with some basics then showing how we did it at Brickflow.
What is lean marketing?
The idea behind lean startup, like launching MVPs for real user feedback or the build-measure-learn cycle, can be used for marketing efforts as well. This way spending huge budgets in vain can be avoided, which can be essential for a startup with scarce resources.
Doing lean marketing means starting test campaigns from day one with very small consideration of a perfect slogan or superior creatives. This is not the time for perfectionism, what you need is product/market fit and traction as soon as possible.
While preparing an online campaign you start with keyword research, copywriting and designing landing pages. The completion of a landing page can last 1-2 weeks, but starting a campaign on Facebook or AdWords is only a matter of hours. Why don’t you start a test campaign while your landing page is in the making? You can get invaluable real-life feedback about the conversions of your keywords, targeting settings or ad copies. What you learned can be included in the final copy of your landing page.
So before spending huge budgets, spend a couple hundred dollars on experimenting in order to find the best fitting marketing messages and ways of acquiring new users.
What to test and when?
You can avoid steering your startup (or actually any kind of) product or service in the wrong direction and spending marketing money badly if you make your decisions based on validated data. You need to look at different things in different stages of product development.
- Validating the market
- Testing value proposition
- Finding Product/Market Fit
- Fine tune positioning and even product development roadmap
- Test and iterate marketing messages and user acquisition channels
- Increase earnings
- Scale user acquisition channels
Perception about our own ideas is often biased. You cannot be sure without validation if people need your solution or would use it in the way you think. In many cases low interest for a product is not a quality problem, but rather a marketing one. You can easily answer the following question by running value proposition tests, without writing a line of code:
About your markets:
- Which market is more profitable?
- Which market leads to early traction and revenue faster?
- Which market has more growth potential?
About your product and its communication:
- What makes your product or service valuable?
- What makes it better than your competitors’?
- Why would a customer purchase it?
- How does it benefit people?
- What problem does it solve?
How testing led to a pivot of market at Brickflow
By the time I joined Brickflow they had already dived into visual content discovery. Users could connect their social media account and the recommendation engine presented them personally relevant images, videos and GIFs that they could share. Well, the job delivered is apparent but why is it beneficial for the users? What are they supposed to do with the found content?
To figure this out we constructed eight very simple landing pages, each prompting a different use for Brickflow very clearly:
We bought traffic (advertised) on Facebook for a 100 dollars and monitored how many people clicked-through and signed up (converted) on the landing pages. The results were quite convincing:
Most people wanted to share the content on Tumblr. Once we found a target group that most likely could lead to early traction we switched the registration form to a “Sign up with Tumblr” button and the copy to “Share great content and get followers on Tumblr” on the frontpage.
So you have a product, a validated market and a few users. Time to grow, but if you are not Whats App users will not come by themselves. The next task is to find marketing channels through which you can acquire as many users as possible.
In their book called Traction, Weinberg & Mares talk about finding marketing activities that move the needle, i.e. result in a measurable and significant impact. A channel (e.g. paid online ads, social media, search ads, SEO, PR, content, etc.) that yielded enough users or buyers in an early stage might saturate at a point in spite of every optimization effort. Therefore you will need to look for ones reaching a bigger pool of target customers through iterative experimentation.
Adequate channels vary based on your market, B2C or B2B, target audience, etc. The Bullseye-method (proposed in Traction) will help you to find the ones you need. It is important that at this point we are not talking about optimizing channels but comparing them and looking for data answering the following questions:
- How much does it cost to acquire a customer? (conversion)
- How many customers can be reached through the given channel?
- What is the ratio of converting customers from the audience?
- How long does it take to acquire a customer?
We tested several paid online advertising channels first. We needed to shortcut trying out other non-paid ones at the beginning because the product was in the making and weekly build-measure-learn cycles were happening ongoingly. Therefore we needed a stabile user inflow to run these tests. Paid channels are great for that; you play and users are coming. What is not indifferent, on the other hand, is how much you pay for these users. So we tried out several advertising platforms:
We identified Facebook as the cheapest channel. But as time passed and the pool of reachable Tumblr users saturated on Facebook, prices went up. We went on experimenting with acquisition methods and identified affiliate marketing the next way to go. The idea is simple: if we want to reach Tumblr users, why not find them on Tumblr itself. Fiverr (a marketplace of micro-tasks) is full of bloggers offering promo space on their blogs. We bought their services (placing ads on their blogs) and the cost of a new user dropped dramatically.