- On this blog post, you'll learn:
- The best acquisition strategies used by the most successful startups;
- How tp adapt them to your company;
Managing a startup is like riding a roller coaster, not only because of the ups and downs but mainly because of the constant thrill and butterflies in the stomach. The truth is: you need to make sure that your business is sustainable and more importantly, scalable. This a tough job if you consider that the lifespan of the average startup is 3 years.
To make things even worse, 50% of all new businesses fail within five years. The main cause? Scaling too fast and too soon.
However, as a growth hacker, you need to understand that growing overnight is tempting but also very dangerous. Betting on shortcuts can kill your business. The long-term future of a startup is only possible from the moment you realize the cost of playing the long game is actually not any higher than following the shorter path which takes you only so far.
So what's the secret of the best startups? How Uber, Airbnb, and Twitter are staying strong? Well, to sum up, they know how to get new customers (and retain existing ones, of course, but this is a subject for another blog post).
But how do they actually do that? To start, they have a well-designed marketing plan that focusses on sustainable growth.
To fully understand these companies we have dug up some of their histories and we'll now tell you the main tactics and strategies they use to acquire new customers.
What do you need to get new customers?
Every successful startup has a story behind. Most of them are full of drama, ego battles, and disputes over who controls what. But the one thing to notice is that somehow they managed to overcome intern problems and are now worth billions of dollars. And what did they do to get new customers?
A great example is Twitter. The startup foundation history has many versions and of course, there is some drama included in it. But let's leave the "downs" behind and focus on the "ups" of the company that is worth $10 billion.
Twitter was born 11 years ago and has more than 350 million active users. The service was extremely criticized at the beginning as not many people understood what was the main point of it. But staggering 6 months after their launch they had up to 60.000 users.
Their success is a combination of different things. I mean it's a great idea to have real-time, public, short and informal updates about anyone or anything in the world, at anytime you want. Twitter gave the first users the possibility of connecting to anyone and this created a sense of urgency in the web community. Allowing users to create features (just as the @replies and direct messages), and the hashtag management also contributed to the rapid growth of the company.
The tipping point happened when the company entered the SWSX conference and festivals, an event that is known for its reputation of launching startups. On that year, the company went from 20,000 daily messages to more than 60,000. Of course, the company prepared for the event. According to one of the founders, they paid $11,000 to put a visualization of the service on flat-panel screens in the hallways and created an event-specific feature that allowed attendees to text a message in order to sign up automatically and follow a handful of "ambassadors" at SXSW.
To sum up, innovative idea + creating a sense of urgency + empowering users + powerful marketing strategies.
Branding is crucial to acquire new customers. Visibility creates opportunities, and how your company positions itself towards the customers is vital to create all your marketing, sales and customer success strategies.
Not to mention that only with an effective branding your startup will become visible to investors and other stakeholders and be a valued brand.
The art of marketing is the art of brand building. If you are not a brand, you are a commodityi
A company’s brand is its entire personality. It's how you can express your product's capabilities, it’s core values, business methods and how it can change a user’s experience.
Just take Uber as an example. The core value of the company is to promote an exceptional customer experience at lower prices. Uber promises a transportation service that is much more convenient and customer-focused than the taxi industry around the world has become. Their success can be attributed to 3 simple things which, according to Forrester Research, are the heart of good customer experience: effectiveness, ease and emotion.
Although the company hasn't developed its emotional side as it should, it seems they are on the right path. For example, recently they have teamed up with the music app Spotify to allow customers to link their playlists to the Uber app and select the music they want to hear when they get in a car.
And according to CEO, Travis Kalanick, they intend to stay on this track: “For Uber, we’re trying to always create highly evolving experiences, the opposite of which of course is the taxi world that came before it".
When it comes to acquisition, the less you spend on it, the more successful you are. I mean, if your clients are finding your company without too much effort and investment from you, your marketing and branding strategies are working as they should. This is one of the best startups practices.
On this subject, the tip is: think outside the box. Try to find different ways to promote your business, especially if you are launching an unknown product.
The best example? Airbnb. To start with they had an innovative idea but not the money to start the company. So they had an idea. They bought a ton of cereal and designed special edition election-themed boxes, with Obama O’s and Cap’n McCain’s faces on it, which they sold at convention parties for $40 a box. They sold 500 boxes of each cereal, helping them to raise around $30k. But not only that, they also started to brand themselves.
Some time later, they did another great move: Airbnb offered users who listed properties on Airbnb the opportunity to post them to Craigslist as well. At that time, Craigslist not only had a massive base but they were also the place where people who wanted something other than the standard hotel experience looked for listings.
Since Airbnb was easier to use and more personal and appealing, Craigslists customers started to switch to the app. And to make things better, Airbnb clients made more money than with the competitor's service. The rest is history.
Once you attract the right type of people to your startup, you need to continue a good job, so your acquisition rates don't fall unexpectedly. Remember the roller coaster analogy? Well, it's better not to stay in the car when this happens.
The best startups strategies? Customer relationship management and customer success to keep the clients coming. Etsy is a very good example on how to make your customers work for you. They let their suppliers do the advertising. To be able to do, that the startup provided support to the sellers to market their crafts and offered internal management tools for the sellers to better process orders and talk with their clients. And they didn't stop there.
Eventually, they provided more than 150 tools to help their clients to find more customers and communicate with them. To Etsy, this is an ongoing process, so they're not only retaining existing clients but also working on acquiring new ones.
The key to keeping customers coming is always improving your strategies. How do you that? Or how do the best startups do it? Listening is a good start. Ask customers what they want. Understand their needs and wants. Track their behavior. Airbnb, for example, maintained a culture of testing many features and soliciting feedback from its customers.
But in order to keep receiving this feedback, there is also a trick: you need to answer them as soon as possible. Another technique tested by the startup was testing their own service to see what needed to be changed.
To grow steadily you also need a plan. Or a playbook, as some say. This is the advice of Uber's CEO, Travis Kalanick: "After a platform finds a formula that works, it needs to distil the formula into principles, catalysts, and a to-do list to transfer the formula to managers it hires to expand in different regions or industry verticals.”
Want to know some more? Check out this TED talk!
It's always important to remember that after the acquisition stage comes retention. But if you follow our advice, you are already planting the seeds to a great customer retention strategy. As we mentioned before, by listening to the clients and providing good customer service and experience, you're halfway there.
Don't be mistaken! o succeed in the startup rollercoaster business you need to have all the strategies perfect aligned, from acquisition to advocacy.
The best startups usually create flexible marketing plans that can be tweaked and adjusted at any time, but they never lose the main focus: growth.
Remember that all of these strategies (acquisition, retention, data analysis, etc) become so much easier with the help of a marketing automation platform.
With the right software, you can automate a number of daily tasks, save time and achieve better or more precise results.