Building A User Acquisition Machine

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Table of Contents

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3 Stages of a Startup

Startup Economics Simplified

Finding a Problem/Solution Fit

Finding a Product/Market Fit

Early Customer Acquisition on a Minimum Budget

Startup Marketing Funnel

Growth Hacking

Case Studies: 12 Examples of Successful Growth Hacks

Content Marketing

Email Marketing

Press

Viral Marketing

Conversion Rate Optimization (CRO)

More User Acquisition Strategies

References

3 Stages of Startup

Problem/Solution Fit

Product/Market Fit Scale

Customer Discovery Customer Development User Acquisition

The standard way of beginning a startup involves (1) being blessed with an awesome idea, (2) writing a business plan and (3) executing the business plan step-by-step. The statistics show that 99% of startups fail. The reason? Not enough customers. The problem with the traditional model is that unlike small business, startups are designed for fast growth and they usually start with an innovative product, business model or market. These contain many variables, therefore it is impossible to predict the right approach to user acquisition without seeking constant feedback and involving users in the process from the beginning. The statistics show that over 65% of startups end up changing their business plans on the go. The reason is simple. Before you enter the market, your assumptions are merely a guesstimate if not outright fantasies. You will have limited time to break even or gain sufficient growth in order to get to the next round of financing once you start. Therefore betting all your money, your entire career and all of your time on one strategy may not be the wisest choice, especially considering the 99% fail rate in the startup industry. Seeking validation and market feedback needs to be done as soon as possible to alleviate the risk involved with your strategy. This whitepaper is divided in 3 parts, the third of them, user acquisition, being the most extensive.

Customer Discovery

!A startup starts with an idea. Usually the idea is a solution to some problem or some kind of improvement of the status quo. In the customer discovery process your goal is to find out if this problem has a market and that it is a problem/improvement that is monetizable i.e. big enough that customers are willing to pay for it. At the end of the process you should achieve a Problem/Solution Fit and build up your prototype.

Customer Development

!In the customer development process, you are trying to sell the product and validate whether customers will buy and use it and also whether the economics of your startup even work. i.e How much does it cost to acquire users and will it ever become profitable? After this process you should end up with a Product/Market Fit and only after you have achieved this, should you start scaling your startup.

User Acquisition

!At this point, you already know you have a product users will buy and a business model that can be scaled. This is the stage where startups should start spending money and effort on marketing. This is important because it can save you a lot of money and time selling something users either don’t want or some that doesn’t quite work on the important financial front.

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Searching For Problem/Solution Fit

Searching For Product/Market Fit

Scale/User Acquisition

Conserve Cash Invest Aggressively

Economics Simplified

You Have Identified Your Repeatable & Scalable Business Model • Your cost to acquire a customer (CAC) is significantly less than the amount of revenue they can generate in

their lifetime (LTV). A serial entrepreneur and a VC David Skok, recommends the LTV to be at least 3x the CAC, and the CAC to be recoverable within 12 months.

• You can keep increasing your sources of leads/traffic without reaching a limit. • You can keep repeating your process without losing productivity.

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1. Problem/Solution Fit

If I had asked people what they wanted, they would have said faster horses. Henry Ford

Finding a Problem/Solution FitHenry Ford already found his solution/product fit when he started his first car factory. He knew people wanted “faster horses” or in other words they wanted a faster means of personal transport. He didn’t ask them how to build it but he knew they would pay for it. At this stage your goal is to find out if the product is worth building, before you start investing money and time into building it. At the end of the process you should have your initial prototype, or at least a definition of it, to get started. This process is about getting out of the building and talking to potential users about their problems in the market area your product is targeting. Just like Henry Ford, you are not interested in learning “how to build it” but whether it makes sense to build it (do people need a faster means of transport and will they pay for it). If you are concerned about somebody stealing your idea read this great blog post by serial entrepreneur and a VC Chris Dixon, before you start.

How To Interview Customers

In the very early stage you want to start with talking to your potential customers. Before you start you should have a hypothesis that you want to validate formed. For example “Customers are fed up with Facebook and Google stealing their data, they want more control over their data on the public web” One very good article on this topic sums up the interviewing rules as follows: ๏ Don't just talk about your idea. Talk about the customer’s pain/problems. ๏ Do not ask about the future. E.g we built X would you use it? !The following five questions should provide you with enough insight to form the conclusion. 1. What’s the hardest part about      [problem context]    ? 2. Can you tell me about the last time that happened? 3. Why was that hard? 4. What, if anything, have you done to solve that problem? 5. What don’t you love about the solutions you’ve tried? !Aside from customer interviews you can conduct a variety of tests online and offline. If your test involves direct emailing, a 50% response is considered to be a pass. If it involves a landing page a 10% conversion rate should be an absolute minimum. Before you start remove personal bias.

How to Reach Potential Customers

๏ Starbucks test: Go to Starbucks, pick a random person, tell them your brother has a business idea and offer to pay for their coffee if they are willing to provide honest feedback.

๏ AdWords campaign: Google offers a free $150 Adwords credit. You can create a landing page describing your solution, add an email signup form and use the credit to drive traffic to it. Depending on how many users you manage to capture you can ask them to fill out a survey via email. Launchrock will provide you with a free landing page.

๏ Beta signup page: Once you've created your beta signup page, you can also distribute it using early adopter platforms such as Betali.st and it’s alternatives.

๏ Join meetups and talk to people: Find relevant meetups, events or conferences in your area, join them and talk to people. meetups.com is a great place to start.

๏ Direct emailing: Tony Hsieh (and many others) got his first 30 customers through direct emailing and later sold his company for $265 million to Microsoft. Use websites like Quora or Linkedin to find relevant people.

๏ Get 30 minutes with the most successful entrepreneur you know: Alternatively you can use ohours to get a meeting with experienced people in your area. Another solution is clarity.fm that allows you to talk to top entrepreneurs for about $85.

๏ Forums: Relevant forums and websites such as Reddit, Hacker News or LinkedIn groups can be a good place to reach out to early adopters for valuable feedback.

Helpful Links:Steve Blank: Customer Development is Not a Focus Group Quora: What is Your Favourite Method for Doing Problem Interviews

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2. Product/Market FitThey can't always tell you what they want, but they can always tell you what's wrong.

Bill Gates

Finding a Product/Market Fit

“Product/market fit means being in a good market with a product that can satisfy that market,” according to Marc Andreessen, to whom the term is often attributed. He compares this to a startup’s team and product: the best team with the best product will fail if the market is not there (using product and service interchangeably). He says it’s “the only thing that matters” and that companies should strive obsessively to achieve it until they do. Statistically 70% of startups fail because of premature scaling, making it the number 1 reason why startups fail. According to Sean Ellis who advised over 100 startups, premature scaling is frustrating, expensive and unsustainable killing many startups with otherwise strong potential. Finding a Product/Market Fit is a pre-scale process, ensuring you are won’t be in that 70%.

How To Measure a Product/Market Fit

According to Sean Ellis the achievement of product/market fit can be measured according to a specific metric: when, in a survey, at least 40% of users say they would be “very disappointed” without your product or service. He determined this 40% benchmark by comparing results across 100s startups. The key question was:

Identifying a Repeatable, Scalable Sales Model

According to David Skok you’ve found a repeatable and scalable sales model when: 1. The process you go through to acquire a paying customer is clearly repeatable. ๏ If your process involves salespeople, you can add new hires and they can achieve the

same productivity level as the original sales team. ๏ If it’s a touchless web sales model, your web traffic converts in a predictable way

through your web site. 2. The process is scalable. ๏ You can increase the sources of your leads and/or web traffic without reaching a near-

term limit. ๏ The resources (e.g. salespeople) in your conversion funnel can easily be scaled without

reaching a near-term limit. 3. Your cost to acquire a customer (CAC) is significantly less than the amount you can monetize them over the customer’s lifetime. ๏ In a SaaS business, I recommend that lifetime value (LTV) should be more than three

times higher than CAC. ๏ It should also be possible to recover CAC in less than 12 months for a capital-efficient

startup. ๏ LTV should be calculated using gross profit (not revenue) after cost of goods, cost to

serve and cost of on-boarding.

Helpful Links:Ash Maurya: 10 Steps To Product Market Fit

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How would you feel if you could no longer use [product]? 1. Very disappointed 2. Somewhat disappointed 3. Not disappointed (it isn’t really that useful) 4. N/A – I no longer use [product]

Ellis recommends sending the survey to a random sample of people who have: ๏ Experienced the core of your product offering ๏ Used your product at least twice ๏ Used your product in the last two weeks For more details you can read about the whole process in the original Venture Hacks article by Hiten Shah and Sean Ellis.

How To Get There

At this point you have a prototype with some initial users gained from the previous stage and you are already acquiring more using some of the low cost marketing techniques (see next page). You should keep your burn rate as low as possible and keep collecting data in order to improve your model until you achieve a product/market fit.

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Early Customer Acquisition on a Minimum Budget

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The following list is a great example of some of the $0 budget techniques that were originally used by Noah Kagan who scaled Mint to over a million users in 6 months and Appsumo to 500,000 in 1 year. 1. Create your target marketing sheet. 2. Manually reach out and connect with your first 1000 customers. It is likely that they are

MORE important than the next 99,000 people you'll get. 3. Partner with similar companies and create benefits for them to email their free users 4. Reach out to Meetup groups who generally have 200-1,000 person mailing lists 5. Befriend owners of Facebook pages and see if you can do contests for an in-kind trade 6. Go to the r/subreddit (page on Reddit) related to your business and leave comments 7. Search 5-10 keywords related to you on Google and leave comments on those related

pages (don’t be spammy, offer valuable response, advice etc. ) 8. Give away free content or ask partners for freebies 9. Write guest posts for any site that is related. Use Technorati or ask your existing

customers which sites they like to go to. 10. Email the existing users you have asking for them to refer other people. This sounds

obvious but hardly ANYONE does it. It helps if your product doesn't suck ass. 11. Leave video responses on popular-related YouTube videos 12. Raise your prices so you don't need to get so many people :) 13. Manually reach out to Twitter / Facebook followers of your competitors 14. Look at new channels that have less competition (rules) like snapchat, Pinterest,

Instagram to drive traffic 15. Consider international channels where traffic is cheaper 16. Evaluate doing mobile related marketing - it’s more affordable (less competition) 17. Get your product featured on promoting sites like AppSumo, Groupon, DailyWorth,

Thrillist, DailyCandy etc.

๏ Email users who signed up on your landing page in the early stage and invite them to join ๏ Get listed in as many startup directories as possible ๏ Offering A-lister tech commentators like Robert Scoble early access / in-person demos ๏ Pitch startup news outlets like TechCrunch, Read/Write Web, Mashable, etc. ๏ Pitch local news outlets ("Local Entrepreneurs Tackle a Big Problem") ๏ Reddit advertising (read why), Facebook interest-targeted PPC and StumbleUpon

advertising (all relatively cheap) ๏ Setup Google alerts, Twitter saved searches, and other monitoring tools for people asking

questions about the type of service you provide. ๏ Create controversy related to an industry topic. ๏ Get double-sided business cards. One side with your contact info, the other side with 3

bullets (max), or a simple tagline that pitches your product succinctly. ๏ Pitch a demo at a tech show ๏ Leverage your first customers / users as much as possible. Ask for referrals, incentivize

them to invite others, show them off for social proof, etc. ๏ Get featured on Craigslist , niche classifieds and ecommerce sites that compete with

Craigslist. ๏ Monitor competitors for controversy / unpopular changes. Become the leading source of

news about that topic. Offer incentives for people to switch. ๏ Partner/Piggyback on big platforms, for example Trulia made a partnership with CNN

Money to power their real estate search. Instagram built a cross-posting feature leveraging Facebook and Twitter.

$0 Marketing Budget Strategy More User Acquisition Tips for Early Stage Startup

7.

3. Scale/User Acquisition

We have a strategic plan. It's called doing things. Herb Kelleher

Startup Marketing Funnel

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One of the mistakes first-time entrepreneurs often make is to assume that visitors on their website are ready to buy their product or service right away. But in reality, the average visitor to your website isn’t ready to make a buying decision… yet. In order to grow a successful business, you need to understand the concept of “the funnel” and the stages that fall between “casual website visitor” and “revenue”. The left side defines the metric and the right side names some of the marketing strategies applicable to each of the stages.

Acquisition / Traffic

Activation / Leads

Retention / Qualified Leads

Referral

Revenue

People come to your homepage or other landing pages from various channels, from press to blogs to search engine traffic to word of mouth.

People have a happy first experience while on your site, usually culminating in some action like the creation of an account or giving you their email address for more information.

People become active users of your product, coming back to use it multiple times and staying engaged each time.

People share your product with their friends, who then have to be activated, retained, etc.

You monetize people using your product, either through advertising, sales, subscriptions etc.

Advertising, SEO/SEM, Social Media, Content Marketing, PR

Signup Forms, Newsletters, Sweepstakes, Social Widgets

Email Marketing, Retargeting

Viral Marketing, Growth Hacking

Conversion Rate Optimization

Helpful Links: Dave McClure: Startup Metrics For Pirates, Ash Maurya: 3 Rules To Actionable Metrics, Traffic Sources, Conversion Rates, Anatomy of Launching Fab.com

9.

Acquisition / Traffic

Activation / Leads

Retention / Qualified Leads

Referral

Revenue

People come to your homepage or other landing pages from various channels. from press to blogs to search engine traffic to word of mouth.

People have a happy first experience while on your site, usually culminating in some action like the creation of an account or giving you their email address for more information.

People become active users of your product, coming back to use it multiple times and staying engaged each time.

People share your product with their friends, who then have to be activated, retained, etc.

You monetize people using your product, either through advertising, sales, subscriptions etc.

Advertising, SEO/SEM, Social Media, Content Marketing, PR

Signup Forms, Newsletters, Sweepstakes, Social Widgets

Email Marketing, Retargeting

Viral Marketing, Growth Hacking

Conversion Rate Optimization

Growth HackingA traditional marketing plan has a very broad focus, and while the discipline itself is very important, as such it is not directly applicable in early stage startup. In the first phase of a startup you don’t need someone to “build and manage a marketing team” or “manage outside vendors” or even “establish a strategic marketing plan to achieve corporate objectives” or many of the other things that marketers are tasked with doing. Early in a startup you need one thing. Growth. Growth hacking is a relatively new term and it is controversial as a discipline. However is is also a philosophy or a mindset important for startups to follow when executing their user acquisition strategies.

Growth Hacking Explained

๏ More than marketing: Growth hacking can be best described as a cross discipline between data analysis, marketing and product management, with a narrow focus on growth.

๏ Creativity: A person with a growth hacker mindset finds non-traditional ways to drive growth. This goes beyond creative forms of ads, it can be a feature of a product or finding a new channel for reaching out to customers. A good example of a growth hack is an Instagram cross-posting to Facebook and Twitter, which allowed Instagram to leverage the large audience of these platforms.

๏ Critical thinking: As a growth hacker you don’t just assume something will be a good “growth hack” before you commit full resources, you conduct a simple and cost efficient experiment and measure the results.

๏ Always learning: In fact, growth hacking is about conducting experiments all the time and comparing them with each other in order to find the strategies with the best return on investment (ROI) as well as optimizing deployed strategies to drive the ROI up.The whole process can be simplified to following feedback loop:Idea —> Test —> Measure —> Learn —> Repeat.

Idea / Hypothesis

ExperimentLearn / Data

Why Growth Hacking?

๏ Startups live in extreme uncertainty: Unlike big companies or traditional small businesses, startups are companies that often have an innovative product, business model or market and a limited time to succeed. While predictable marketing models are already established in traditional industries, startups often have to start from scratch and discover or create new marketing channels, customers and business models.

๏ Startups are about fast growth: The main difference between a small business and a startup is that unlike small businesses (e.g restaurants) startups are companies built to conquer the world in a very short period of time (e.g Google, Facebook). Startups have to think about how to achieve 1000x the number of new users than a traditional marketing method would yield.

๏ Time & Money: Startups have limited budgets and a limited time frame to succeed. Suppose you begin a startup with a $150k budget. That is about how much Coca-Cola spends on a couple of newspaper ads. But unlike Coca-Cola you have a limited time to break even or to demonstrate growth in order to raise another round of financing.

๏ Effectiveness: As all of the above suggests, growth hacking is about conducting as many experiments as possible to find your scalable and repeatable user acquisition strategy as soon as possible. However it does not stop there, growth hacking recognizes no limits - once a startup finds its scalable business model the effort goes into optimizing it to drive up the ROI as well as retaining acquired users.

Helpful Links:

Quicksprout: The Definitive Guide To Growth Hacking HackPad: Growth Hacking Cookbook Sixteen Ventures: 21 Growth Hacks To Test Today Kissmetrics: 35 Resources to Help You Become a Growth Hacker

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Case Studies: 12 Examples of Successful Growth Hacks

Dropbox

!Dropbox is one of the fastest growing startups. Aside from having a great product, dropbox implemented a referral system which allowed users to get extra space for each referred friend who signed up. It helped to take Dropbox from 100,000 users to 4,000,000 in under two years. This post outlines their other hacks.

Hotmail

!When Hotmail launched in 1996 it grew fast. They had a killer marketing idea – add a tagline “Hotmail: Free, trusted and rich email service. Get it now.” at the end of every single email sent from hotmail to promote the service. Every time you sent an email you were spreading a marketing message virally. That led to a $400 million acquisition by Microsoft

AirBnB

!Early in it’s days AirBnB achieved a high growth thanks to their Craigslist integration. They’ve picked a platform with 10s of millions of users and created a feature with automated cross posting of your AirBnB listing. You can read about the details in this this great post by Andrew Chen.

Candy Crush

!Candy Crush was one of the top grossing iPhone games in 2013. They were gaining over 45 million users per month. When users run out of lives, they can either pay, wait 30 minutes or invite their friends to “help them out”

Instagram

!Similar to AirBnB Instagram included a feature that allowed cross posting to platforms like Facebook and Twitter. As a result Instagram was able to leverage the distribution of some very large existing platforms to help accelerate the growth of its service in the early days. You can read more about their other hacks here.

Twitter

!Early on, Twitter identified that when a user follows more than 20 people they become an active user. Twitter made it a key objective to get users to this point as quickly as possible. One of the ways that they did this was making suggestions of people who the user could follow during the registration process.

Pinterest

!Much like Twitter, Pinterest faced a similar “chicken and egg problem”. In order to engage new users and get them to use it, they implemented an “auto-follow” feature. Upon signing up for Pinterest new users are automatically following a select group of high quality users and thus they get hooked and stay.

Mint

!Mint was one of the first startups to implement a successful content strategy. They built a unique personal finance blog, very content-rich, that spoke to a young professional crowd that they felt was being neglected. The blog became #1 in personal finance, and drove traffic to the app.

Spotify

!When Spotify launched in the US, instead of building their user base from scratch, they were one of the first companies to integrate their product into the Facebook News Feed. That allowed the startup to spread virally across the platform gaining a significant traction.

Über

!Über learned that 95% of all riders have heard about Über from other Über riders. The experience was so great that most were happy to share. However, Über has designed their strategy to leverage this growth by focusing on creating local network effects in their launch city. You can read all the details on this link.

Groupon

!Founded in winter 2008, Groupon went public 3 years later at a $30 billion valuation. One of the main reasons it grew so fast was that each groupon had to achieve a minimum number of sales to be activated. Users would therefore actively promote the deal to their friends to join and purchase in order to use the voucher themselves.

Karma Hotspot (Hardware)

!Karma Hotspot is a new prepaid 4G mobile hotspot service. The device rewards you for sharing your hotspot with friends and strangers. Every time a new user finds your hotspot and logs onto it, you’re rewarded with 100 megabytes of extra data. More details in this article.

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Content Marketing

Content marketing means creating and sharing informative, valuable, and free content to attract and convert prospects into customers, and customers into repeat buyers. The type of content you share needs to be closely related to what you sell; in other words, you’re educating people so that they know, like, and trust you enough to do business with you. The primary goal with content marketing is not typically to make a direct sale, it is to obtain permission to deliver content over an extended period of time, preferably through email. The secondary goal is to become a “thought leader” in your industry. The benefits of this is that your content gets you on the radar of larger publications, who will then link to you naturally.

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Setting up a blog is a simple matter of downloading the software, uploading it to your server and following the setup instructions. WordPress, for example, is free and offers many amazing plugins. ๏ Use Wordpress: Most major blogs use Wordpress for SEO benefits and the wealth of

plugins to choose from. ๏ Pick a good design: Design builds trust. Make it simple, remove the clutter. You can pick

some of the premium themes at websites like ThemeForest ๏ Make it shareable: Don’t forget to install social widgets to allow sharing ๏ Add forms: The aim of your blog is to collect user’s contact details or point them towards

your product. You can use the freemium Padiact tool to capture email addresses and the free hellobar to notify users about special offers.

๏ Enable subscriptions via feed: Creating an RSS feed using Feedburner is a recommended option. Put visible buttons on the sidebar or the top / bottom of your blog.

Setting Up a Blog

๏ Select a niche: The truth about marketing is that if you target everyone, you'll hit no one. So you need to define the niche that you want to serve. Needless to say it should be something specific to your market.

๏ Do research that gets inside your reader’s head: There are two reasons getting inside a readers head will skyrocket your sales. 1. You will learn information that will help you to create a product or service that matches their wants and needs. 2. You can use their exact language in your copywriting to reach them at a deeper level. A visitor insight tool like Qualaroo provides a widget that collects such insight from your visitors.

๏ Write awesome headlines: Be specific and don’t worry about spending as much as 50% of your time on headlines, many top bloggers do so. There are plenty of great posts on writing headlines, such as How to Write Headlines That Work.

๏ Plan ahead and be consistent: Most blogs fail because they lose consistency or simply give up. If you can keep posting high quality content on a regular basis for over 6 months, you will see both traffic and SEO results.

๏ Time your sharing: Buffer tool makes it easy to time your posts as well as find out when your followers are most active online. Participate in sharing communities such as Reddit, Hacker News, Pinterest etc.

๏ Guest blogging: Guest blogging is a fantastic way to spread your brand to new folks who've never seen your work before, and it can be useful in earning early links and references back to your site. However, make sure you focus on high quality content and get bloggers on a personal level rather than from some link sharing website, since Google started to penalize some of these websites and their users.

๏ Connect your web profiles with your blog: Many of you likely have profiles on services like YouTube, Slideshare, Yahoo!, DeviantArt, Facebook etc. Whatever you're producing on the web and wherever you're doing it, tie it back to your blog. Don’t forget to include it in your email signature too.

๏ Use PPC to drive traffic: Set aside some small PPC budget to drive initial traffic.

Building TrafficWhy Content Marketing?

๏ Good content gets shared and referred to. This builds traffic and SEO. ๏ 7 in 10 consumers prefer to learn about a company through articles, not ads. ๏ Social media and blogs account for 23% of all time spent online. ๏ Interesting content is a top 3 reason people follow brands on social media.

12.

Types of Content

Blog posts

!Articles that talk about issues related to your core message and secondary messages. They can range anywhere from 100 words to 2,000 words, depending on the format you choose and what your readers prefer.

Magazine articles

!Like a blog post, these posts talk about issues related to your core message, but instead of publishing them digitally, you publish them in a print magazine. That magazine may be your brand's magazine, a trade (industry) magazine, or a consumer magazine such as Inc., Fortune, Time, etc.

Video

!Not all content is housed on your website. You can create a channel on YouTube or Vimeo that provides another access point to your business. Some content marketers upload videos to YouTube, then repost them on their blog. Others create a video blog, or vlog, that lives on YouTube.

Podcasts

!Podcasts are audio articles or radio shows, often published in iTunes, Stitcher Radio, or Blubrry. Podcasting is gaining renewed popularity now because people who don't have time to read are able to listen to articles while they are on their daily commute or doing other activities.

Webinars and Teleseminars

!You can present information to a live audience during webinars and teleseminars, then use the recording and slides as content on your website, in newsletters, and in programs/products.

Speeches, workshops, interviews

!According to popular blogger Gregory Ciotti this type of content is “The absolute BEST way to get links, as it’s far more scalable than guest blogging.” You can interview other interesting people or get featured in other media. Your end-goal here should be to land features on big-time publ icat ions: FastCompany, Forbes, TechCrunch, Gawker sites, etc.

Powerpoint presentations

!Offer them on your website. Turn them into infographics. Use them in blog posts. Upload them to Slideshare.

Tutorials, guides

!You can create a Web page that provides links to additional information, essentially making a lesson plan for learning something new. This is a great way to build authority in your area of expertise. Remember to tell people what to do if they need additional help. (See how easy it is to drive business objectives with your content!)

Infographics

!Infographics are creative presentations of facts and figures rather than dry-as-toast reports. If they're well done, they are also very sharable. When you create on and publish it in infographic directories it can result in many links, as they often get picked up by other bloggers and journalists here.

White papers and special reports

!People want useful information that helps them make better decisions. That's why white papers, special reports, and other researched information make such great premiums and free offers. You can periodically offer these as a value-add to your followers, or you can offer them as an incentive for signing up to your email list.

Newsletters

!Content marketing is about building relationships. What better way than to send your content to people's inboxes rather than making them visit your website every day? A newsletter also helps you build your email list, which allows you to make email offers as well.

Ebooks and products/programs

!Ebooks and books are a great way to build authority and trust. You can easily produce a short ebook and sell it on Amazon. Then turn it into a PDF and offer it on your website as well.

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Converting Your Content Traffic

๏ Lead Nurturing: Lead nurturing starts by collecting contact information in exchange for something the visitor deems of value, but with little risk. Often, this entails some form of information or product trial intended to help solve the visitor’s problem. Email addresses, RSS subscriptions and similar methods of engagement all serve to keep a visitor’s memory and impression of a company or product at the forefront. Later, the contact information provided offers you the ability to educate, inspire, or otherwise engage a potential new customer.

๏ Webinars: If you have a product or service, you should consider doing a weekly webinar. The webinar shouldn’t just be about your product or service, but instead it should be around something that benefits your potential customers. the tricky part about webinars is that you have to convince people who are watching them to sign up for your product or service. Here are some ways to do it: 1. Ask them to sign up: you can tell people who are watching your webinar to sign up

for your product or service. According to top marketer Neil Patel if you get 10% of the people to convert, you are doing really well

2. Offer a free trial: when people are signing up to watch your webinar, include a “check box” that gives them an option to sign up for a free trial of your product.

๏ Remarketing: Once you have a large audience reading your blog, you want to remarket to them. Through services like Retargeter and Perfect Audience you can retarget all of your blog readers so that when they browse random sites like TMZ, they’ll see a banner ad for your company.

๏ Calls to action: There are numerous ways you can drive traffic from your blog to your main website. The easiest way to do it is by using calls to action. There are 4 effective calls to action you can easily use: 1. Hello Bar: a little bar with text and a button on top of your site 2. Navigation Link: added to your navigation bar referring back to your product 3. Static Ad: a still ad on the side of the site 4. Scrolling Ad: when you scroll it moves with you

๏ Case Studies, eBooks and Whitepapers: Using your calls to action, you can offer some relevant and helpful learning materials in exchange for users giving you their email addresses.

๏ Special promotions: One of the easiest ways to convert readers into customers is to offer them special promotions. You can do a blog post that offers readers a special discount, or a bundled deal. !

Helpful Links:

Quicksprout: The Advanced Guide To Content Marketing Rand Fishkin: 21 Tactics To Increase Your Blog Traffic Ramit Sethi Exposed: How He Earns Millions Blogging Quora: What Are The Best Practices For Converting Blog Traffic

๏ Collect emails: Another way to monetize a blog is through emails. It’s a much longer process than the previous methods, but the conversion rates tend to be higher. Let’s start with the ways you can collect emails on your blog: 1. Popup: by leveraging tools like PopUp Domination, 1% to 3% of your readers should

end up giving you their email address. 2. Sidebar: by adding an email opt-in form within your sidebar, you should be able to

convert .5% to 2% of your readers into email subscribers. 3. Blog posts: at the end of each blog post, you can add an email collection box.

Typically .75 to 2% of your readers will convert into email subscribers with this option.

๏ Once you have the email addresses, you want to create an email drip system. Typically, the email drip consists of at least seven emails, and it is sent to people automatically over time. With services like MailChimp, Aweber or SendGrid, you can easily create a drip. Within those emails, you need to educate your customer base and sell to them over time.

๏ According to Neil Patel, a good email drip should convert at around 5%. The key to email copywriting is to educate first, build trust second, and then sell.

๏ Don’t oversell: If your website is too pushy with annoying pop ups your readers will leave and never come back.

๏ Consider turning off comments: If you’re pushing for a call to action of a sale (even if that sale is a signup or a subscription, etc.) then you might consider disabling comments for that post. Why let people get distracted by adding to the conversation, if what you really want is for them to click buy?

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Email MarketingEmail is extremely direct. It is also extremely flexible: giving you a lot of options to work with when developing copy and design. These two factors combined make email a highly converting and powerful platform. It is also a powerful tool to retain and engage blog and newsletter subscribers and convert them into paying customers over time. When someone visits your site, the chances are they will never come back. If you can capture their email (with permission) the communication keeps going on and you can practically reach out to them until they convert, if your campaigns are useful, engaging and unobtrusive.

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๏ Create an email marketing account: There are many providers, among the most trusted ones are Mailchimp, Sendgrid and AWeber. If you are looking for a super cost efficient way to manage your campaign, consider setting up Amazon SES or more specifically a new tool for managing it called Sendy. For comparison Sendy allows you to send out10,000 emails at a cost of $1 via Amazon SES vs $200 if you use Mailchimp.

๏ Get a newsletter template design: Often times, plain text emails convert better, however you can get some great looking free templates from CampaignMonitor.

๏ Make your subject lines engaging: Subject lines can make the difference between whether an email is classed as spam or something worth opening to read

๏ Test your emails before sending: If your email is in custom designed HTML, the chances are it won’t display properly across all email clients. For that reason you should use tools like Litmus, which allow you to conduct easy $1 tests. Mail-Tester is a free tool that measures the spaminess of your emails.

๏ Measure your results: Most email solutions provide analytics. It is up to you to collect the data over time and compare different variables for the best results. E.g. opens, click-through, sales vs. subject line etc.

๏ Time your emails: Kissmetrics have a great post on the science of email timing. ๏ Unsubscribe: It is important to give your recipients the ability to unsubscribe from emails.

First, it is required by the CAN-Spam Act. Second, if you don’t give them this option, they are more likely to click on the spam complaint button, which will cause more harm than allowing them to unsubscribe. However, there are some creative ways to drive down the unsubscribe rates.

The Setup

๏ Newsletters: These are the traditional emails you might send each week or month with product updates, offers, sales updates or similar. Ideally you want to keep 90% of them casual and non spammy and ensure that you time your hard sell for the right occasions.

Campaign

๏ Trigger-based campaigns: These are campaigns triggered by your customers’ behaviour. Examples include cart abandonment (following up on customers that don’t complete a purchase), welcome emails after a trial sign up, post-purchase emails and other similar campaigns.

๏ Drip campaigns: Drip campaigns include new subscriber welcome series and other programs designed to gradually introduce customers to your brand. An interesting form of drip campaigns are educational “email seminars” (E.g. "Learn how to increase your sales") designed to capture users' email addresses and engage them.

Helpful Links:

Vero: Email Marketing Guide

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Press

Public Relations is a strong distribution channel due to its low cost and repeatable nature. PR certainly has a human capital cost, but can be fairly easy to execute with the right story. It can also be highly segmented i.e verticals, industries, and audiences. It can help bring forth social proof. "As seen on CNN, TechCrunch, and the New York Times" will always be a seller. If you are on a shoestring budget and you can’t afford a PR firm (which is not a good idea for startups anyway) you will have to approach this matter yourself.

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According to tech journalists such as Ben Parr and Jennifer Van Grove of Mashable, or MG Siegler of TechCrunch, the following steps are an optimal way to approach it PR: ๏ Get an introduction: According to Ben Parr this is often the best way, since journalists get

thousands of emails most of which likely end up deleted. They are far more likely to pay attention if there is an introduction from another founder, VC or friend.

๏ Build the connections: Find them at events, meet them through your friends. ๏ Know who to pitch: Some journalists focus on mobile, others on consumer web, make

sure you are pitching to the right person ๏ Make the pitch short and engaging: Get to the point quickly, have something interesting

to say or involve a question. ๏ Have some news: What type of coverage are you looking for? (launch, funding, new

feature release etc. ) Is it exclusive? According to Van Grove, it is OK to pitch even if there is no significant news and you are simply announcing your new start up. There are sections profiling new startups.

๏ Consider offering something: For example CrazyEgg created a list of all of the popular news blogs in the tech space and offered the writers a free $99 Crazy Egg account. They helped them set up Crazy Egg on their blog so they could see how it worked. However they didn’t just give them a premium account to play with, they also helped them analyze the reports and gave them feedback on what they should change with their overall design.

The Basics The Pitching Process

Helpful Links:

Jason Babtiste: How I Pitched TechCrunch

According to Ex-VentureBeat writer Conrad Egusa the process can be divided into the following steps: ๏ Deciding on your story: At their core, publications and journalists look to write about

meaningful new announcements. It is important that these announcements be new. In general, the following announcements are newsworthy: Company Launches, Product Launches, Fundraising Events, Acquisitions, Milestones

๏ Enter the press release: Once you have chosen an announcement we move to the next step, which is developing the press release. According to Egusa the majority of stories written about companies originate from press releases, with roughly 50% of the story ideas at VentureBeat being generated from emails sent to tips@venturebeat.com.

๏ Creating the email: Once you have a press release, email it to journalists. As advised, make it short, personal and humanly.

๏ The Exclusive: Egusa recommends offering an exclusive. Exclusive means that a particular publication has the first right to publish the article. After the article is published, the entrepreneur can wait a short period of time before contacting other media outlets.

๏ Furthering coverage: When the article comes online, you should promote the press to friends, investors, partners, and more. You should then email hundreds of other publications to further coverage.

๏ Repeating the process: Repeat whenever you have a meaningful announcement.

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Viral MarketingOne of the most useful types of metrics to come out of the last five years of social software is the viral factor. Popularized by the boom of development on the Facebook platform in 2007, a viral factor is a number, typically between 0.0 and 1.0. It describes a basic business problem that affects literally every business in the world: “Given that I get a new customer today, how many new customers will they bring in over the next N days?” In other words viral growth is when 1 customer brings you more than 1 referral. Viral loop is what causes virality of the product and it is something that is rooted in the features or design of the product. Achieving viral loop can be also described as changing the user flow from Register —> Use Product -> Evaluate Product —> Tell Friends to:

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Viral loop is designing a system where a product spreads before or right at the point of becoming a user. Think about how the Washington Post shares the news you’ve read in your Faceboook feed right at the point of clicking into the article (or any of the growth hacks described earlier). It is important to note that the viral loop needs to be directly correlated to a positive user experience, otherwise you will practically become spam. To understand where the viral loop physically sits, you need to ask yourself “Which features actually let a user of your product reach out and connect with a non-user?” According to Adam Nash, CEO of Wealthfront, to design a virality you should focus on these 3 steps: 1. Clearly articulate and design out the features where members can touch non-

members. Wireframes and flows are sufficient. When you succeed, test out the mathematics of it (you need a coefficient of 1.1)

2. Instrument those flows with detailed metrics. These are necessary for each step of the viral cycle to match your model.

3. Develop, release, measure, iterate. This is the place where the length of your product cycles matter. Release an iteration every 2 days, and you might have success in 2 weeks. Take 3-4 weeks per iteration, and it could be half a year before you nail your cycle. Speed matters.

The Viral Loop

According to Andrew Chen who is considered to be an expert on viral marketing, the following are the necessary steps towards building your viral loop: ๏ What’s your viral media? The first (and last) choice you have to make is where people

are going to receive an entryway into your viral loop. That might be e-mail, Facebook newsfeed, or blogs.

๏ What’s your funnel design? The next choice to make is the design of your viral “funnel.” First off, you want it to be short and as accessible as possible, since each page is a barrier you’re asking your users to leap over. Assume up to 80 -90% attrition if you are asking them to register with an email/username/password, for example. If you can make it very short, 2 to 3 pages at the most – with a progressive commitment of personal information, you’ll get further along in your design.

๏ What’s the viral hook in your product? A viral hook is what encourages users to evangelize your product. It might be: an appeal to curiosity (“someone tagged a photo of you”), a social proof (“50 of your friends joined this group”) etc. A viral hook is what makes users take action.

๏ What are the on-ramps to your viral loops? Once you’re done with a very tight viral loop, then it’s time to create the on-ramps. In this case, you are looking at places like your website homepage, paid advertising, traditional marketing campaigns, SEO, etc. to create places where users can discover your viral loop and begin the process.

Register Tell Friends Use Product Evaluate Product

Building Your Viral Loop

17.

Conversion Rate Optimization (CRO)

Conversion is when a visitor to your website takes an action that you want them to take. It could be signing up for an email newsletter, creating an account with a login/password, making a purchase, downloading your app, or something else entirely. Whatever it is you want your visitors to do, this action is what you're going to measure and what you're looking to optimize. CRO can be defined as the method of using analytics and user feedback to improve the performance of your website. In other words, conversion rate optimization is finding out why visitors aren’t converting and fixing it. The whole discipline is relatively rich and this chapter provides you with a brief overview.To learn about CRO in detail try reading Beginners Guide to CRO by Sean Ellis.

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๏ Conversion Rate: To get your Conversion Rate, you divide the total number of conversions by the number of visitors to your site. For example, a site with 5000 visitors and 50 conversions has a conversion rate of 1%.

๏ Call to Action (CTA): The primary button, link or other user interface element that asks the user to take an action that leads to (or towards) a conversion. A “Buy Now” button on Amazon.com, a “Sign Up” button on an email registration field and a “Download Now” on an app landing page are examples of different Calls to Action.

๏ Conversion Funnel: The primary pathway (or flow) of the user experience where visitors complete a conversion. On Amazon.com the funnel may be Home page > search results page > product page > checkout.

๏ A/B or Split Testing: The testing of one version of a page or interface element against another version of the same thing. Each element is measured by its effectiveness in comparison to the other. For example, a red button measured in effectiveness to a green button. In A/B testing only one thing is tested at a time.

๏ Multivariate Testing (MVT): The testing of multiple variations of many different page elements in various combinations to determine the best performing elements and combinations. For example, a multivariate landing test may test many variations of the pictures, copy, and calls to action used on the page in many combinations to find the best performer.

A Few Key Terms

๏ To start with, is your Call to Action clear and easy to find? ๏ Are your Graphics relevant, well-placed, clean, and unique? Or are they distracting and

overwhelming in number? Do you have a lot of unnecessary (or maybe misplaced or not-yet-necessary) text?

๏ Take a look at your site’s Usability. Can users easily search your site for what they’re looking for? If you’re in e-commerce, is it easy to complete your checkout process? How many pages and clicks does it take to complete the key conversions you’re measuring? Is there a mobile version of your website? Keep your navigation, registration, contact, and payment uncluttered and easy to find and operate.

๏ Is it clear to your visitors that their Security is your top priority?Is it easy to trust your site?

๏ Are your Search Engine Optimization efforts up-to-date, accurate, and relevant? Are you using accurate titles, relevant keywords and proper meta data? Images should have correct names, and keywords should be used properly. Titles should be clear and descriptive. If these items are not relevant, people may come to your site looking for something you don’t offer, while those who seek your services are unable to find you.

๏ Do you have Customer Testimonials letting visitors know how happy others are with your services? Social proof is a powerful conversion rate driver.

Where to Start

Basic Toolbox๏ Analytics: Software to track and report on what’s happening on your site day in and day

out. You want an analytics package such as Google Analytics, KISSMetrics or similar that has advanced analysis tools like audience segmentation and conversion tracking. Segmentation can produce data for different sets of people, and you can isolate hiccups or trouble spots in your conversion funnel.

๏ User Surveys: Analytics can only communicate so much about your users’ needs. You need something that gives you the ability to gain insights directly from users in the moment, to hear their concerns in their own words; there is no such thing as too much user feedback.

๏ User Testing: Software like Optimizely and other testing tools allow you to directly observe how users are interacting with your site. You can test potential changes and document how they play out in real life.

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More User Acquisition Strategies

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Advertising

!Advertising is something you’ve probably come across in some form or another. Other names for this topic include Search Engine Marketing (SEM), online advertising, or pay-per-click (PPC) marketing. Very often, marketers use these terms interchangeably to describe the same concept — traffic purchased through online ads. Marketers frequently shy away from this technique because it costs money. This perspective will put you at a significant disadvantage. It’s not uncommon for companies to run PPC campaigns with uncapped budgets. Why? Because you should be generating an ROI anyway. A good place to start is reading The 5 Minute Guide To Cheap Startup Advertising by Founder of Hubspot, Dharmesh Shah.

Search Traffic

!Search engines are a powerful channel for connecting with new audiences. Companies like Google and Bing look to connect their customers with the best user experiences possible. The first step towards a strong SEO strategy is to make sure that your website content and products are the best that they can be. Step 2 is to communicate that user experience information to search engines so that you rank in the right place. SEO is competitive and has a reputation of being a black art. SEO can be quite a complex topic to tackle in one or two pages. The best way to start is to download the following manuals: MOZ: Beninner's Giude to SEO Quicksprout: Advanced Guide to SEO

User Acquisition

!Affiliate programs can be major drivers of distribution for certain products. Information products tend to do the best here, but they can be effective for all types of commerce. There are hundreds of affiliate networks to sign-up with as well as running your own. The key to many of these networks for larger scale companies is not the software itself, but the affiliates and affiliate managers. In order to attract top tier affiliates, also be prepared to be flexible on your terms. Smaller affiliates will be okay with net 30 payouts, but top tier affiliates may want direct wire transfers with weekly payments. This brief guide by Sixteen Ventures might be a good start for you (SaaS focused but very helpful)

Events & Conferences

!Events and Conferences are great ways to not only generate some auxiliary revenue, but they are a great way to gather and educate your prospective customers. Simple meetups with refreshments that gather your customers is another way to go about things. Another more grandiose way of going about things is throwing your own conferences, but this comes at a cost.

Social Media

!Your social media strategy is more than just a Facebook profile or Twitter feed. When executed correctly, social media is a powerful customer engagement engine and web traffic driver. It’s easy to get sucked into the hype and create profiles on every single social site. This is the wrong approach. What you should do instead is to focus on a few key channels where your brand is most likely to reach key customers and prospects. To start developing a presence on key social networks including Facebook, Twitter, Pinterest, LinkedIn, and Quora. Focus on the networks that best position your organization to reach target audiences. Look out for other mainstream social networks that are relevant to your product and have a vibrant and engaged community.

Partnerships

!There are a lot of businesses that have a large user base but don’t make much money from each user. In essence, their margins are low. Those businesses are always looking for new ways to make more money from each of their users. If you can offer their users a special version of your product for free, or at a discounted price, they can typically drive you thousands of signups. All you have to do is to give them a 10 to 30% cut of the revenue that comes from their users. A good example of this is hosting companies. They typically have thin margins and are looking for ways to make more money off their user base. This is the main reason why, for example, GoDaddy constantly upsells you when you are checking out.

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APIs

!APIs are the new business development for the 21st century. Integrating with other companies used to require a lot of time, negotiations, and often money. Now? It just requires an API key and some imagination. Not all APIs have allowance for commercial access and some have a limit, but that’s a problem that can be dealt with. Dropbox just introduced their API and you can see it popping up in almost every work related iPad app.

Direct Sales

!A direct sales channel can be very important in B2B plays where the cost of having a direct salesperson exceeds the lifetime value of the aggregate customers they can exceed. To many in the startup world, it might seem absurd to have a direct sales team, but in enterprise and B2B sales, it’s a viable channel when done right. Especially in early days, you should consider getting your first few users by direct selling. Appsumo started this way and even payment startup Stripe didn’t shy away. Dropbox founder once shared that in the early days he studied a lot of books on selling to learn and do the craft himself, despite being a geek at the time.

Referral Programs

!Referral Programs are slightly different than affiliate programs. Referral programs are less about traditional affiliate channels and more about using your existing customers to spread word about your product. The reward can be cash, but it often comes in the form of in-app rewards. For example, Dropbox gives you 250MB for every user that signs up from your referrals. They also employ a two sided referral that rewarded the user that signed up with more storage. Gilt also has a referral program, but the reward is in cash when the user you refer makes their first purchase. Think about it like this: User X invites User Y. User Y now makes $75 purchase. User X now receives $25 free, but makes a $75 purchase themselves due to the referral reward. ($75+$75-$25)== There is a net win of $125 due to the reward loop even while giving away $25.

Traditional Media

!People still subscribe to cable, read newspapers, and listen to the radio. If you’re trying to reach normals, not just early adopters, and establish some credibility, then traditional media is still a huge channel. It’s bigger when it comes to PR and even ad dollars. Seems hard to believe, but it’s true.

Mobile Platform Distribution

!Pandora increased it’s usage exponentially after the app store appeared. It almost doubled their growth overnight. The best companies such as Dropbox or Evernote have mobile applications across all different platforms. iPhone, Android, blackberry, WinPhone7, iPad, and mobile web are all important. Every user counts and app stores are a chance to reach new users.

3rd Party Social Platforms

!Using 3rd party social platforms in different ways than just your basic Facebook integration. 3rd party social platform usage examples include games from Zynga or Geni.com integrating as an app inside Facebook.com. Another example would be HubSpot with TwitterGrader. Integrating social platforms inside your destination is one thing, but making stand alone apps inside of sites such as Facebook is a whole other form of distribution.

Lead Nurturing

!There's a reason Marketo, Eloqua, Pardot, Silverpop, etc. are on fire. Make 100% sure anyone that comes to your site with any interest is connected with over time, with as many useful touches as make sense. The right time for your lead to buy, or even try, might not be today, but that doesn't mean they aren't a great potential customer down the road. Lead nurturing doesn't produce results overnight, but it is the best way to increase revenue. According to Jason Lemkin who sold his startup EchoSign to Adobe, some of their best leads have been in lead nurturing for 3+ years!

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References

3 Stages of Startup Ash Maurya: 10 Steps To Product Market Fit !Economics Simplified David Skok: Accelerate Your Startup: Develop a Repeatable Sales Model !Problem/Solution fit CustomerDevLabs: How I Interview Customers Canvas: Nail It Then Scale It !Product/Market Fit Quora: How Do You Define Product Market Fit David Skok: Accelerate Your Startup: Develop a Repeatable Sales Model !Early Customer Acquisition on a Minimum Budget Quora: What Are Some Techniques Startups Use To Initially Draw Attention To Their Product What are key strategies to acquire first 100K users with zero marketing budget? !Startup Marketing Funnel GrowHack: Introducing The Lean Marketing Funnel Dave McClure: Startup Metrics For Pirates !Growth Hacking Quicksprout: The Definitive Guide To Growth Hacking TNW: The actual difference between growth hacking and marketing !Case Studies: 12 Examples of Successful Growth Hacks Adam Breckler: Top 10 growth hacks of all time !Content Marketing Gregory Ciotti: Content Strategy for Startups ProBlogger: Ramit Sethi Exposed: How He Earns Millions Blogging Outbound Engine: 7 Benefits of Content Marketing for Small Businesses Quickdprout: The Advanced Guide To Content Marketing !

Converting Traffic JeffBullas: How to Convert Website Traffic into Paying Customers Quicksprout: How to Convert Blog Readers Into Customers Chris Brogan: How To Convert Traffic to a Sale !Email Marketing Vero: Email Marketing Guide !Press Quora: How can one get TechCrunch and Mashable to review a startup Quora: How do you get TechCrunch to cover your startup? Jason Babtiste: 16 Ways Your Startup Needs To Be Getting Customers Quicksprout: How We Grew Crazy Egg to 100,000 Users With A $10,000 Marketing Budget Sean Ellis: Deconstructing PR: Advice From A Former VentureBeat Writer !Viral Marketing Andrew Chen: What’s your viral loop? Understanding the engine of adoption Adam Nash: User Acquisition: Viral Factor Basics !Conversion Rate Optimization Qualaroo: What is Conversion Rate Optimization? !More User Acquisition Techniques Jason Babtiste: 16 Ways Your Startup Needs To Be Getting Customers !

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For more information about this whitepaper contact Appster

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Appster is the fastest growing web & mobile app development company in Australia serving clients international from Australia to North America and Europe. Our focus is on business ROI first whilst delivering outstanding functionality and design. This is why we’ve had dozens of top 100 apps, developed multi-million dollar startups and worked with everyone from BRW Young rich members to Billion dollar company founders. We develop apps using the SCRUM framework, leading to an AGILE and LEAN development experience. We specialise in working with disruptive ‘game changer’ ideas and large enterprises looking to innovate their business models with mobile-first technology.