November 18, 2016
10 Weapons of Mass Distribution for Your Startup
Our team recently sponsored the 500 Startups Weapons of Mass Distribution conference. Here’s what we took away from the event.
1. Build trust with how you take care of customer data
Jascha Kaykas-Wolff is the CMO of Mozilla. He’s been a growth marketer for over 20 years and shared his perspective on how to steward customer data. In a nutshell, Jascha thinks transparent data practices build consumer trust and ultimately lead to better business performance. His research shows that consumers want more transparency from companies about how they’re handling customer data. As a result, we as marketers must be explicit about what we’re collecting, and make sure that when we do collect data that we actually use it. Grabbing data just to hold onto it should be the exception not the rule. The security vulnerability is too high, the information too sensitive, and the risk too great. Jascha suggests lean data practices, like asking:
“Do I need this data to provide the value I’m trying to deliver to users through my business or product?”
“What protections have I put around the data I’ve collected?”
“Is the way I’m collecting, using and disclosing data clear to my users?”
Companies who implement these sound data collection practices will build trust with consumers, and meet the rising demand of people who want companies to respect their privacy.
2. Start product development with the language in people’s minds
Language is the foundation of growth. At least that’s what James Currier from NFX Guild believes. Instead of adopting the typical problem** → *product* → **market it approach James suggests we find the language already in people’s minds then create the product from there, also known as the market it** → *product* **approach. Seems trivial but James has the results to prove it. A few years ago, his team wanted to build a Facebook game. Two thousands dollars worth of name testing ads later, the team landed on “Dragons of Atlantis” before writing a single line of code, and made $120 million in revenue the next year. Incredible. The “language first” approach is about filling demand instead of creating it. Does this bring back memories from Marketing 101, anybody? :)
Grow your business, not just your user base. Figure out how to start monetizing today.
Paid acquisition is necessary in our crowded marketplace. But make sure your lifetime value is higher than your cost per acquisition, and max out as many free growth channels as possible.
Make it about your customers. Not about you.
Speed is the #1 advantage of a startup. Run 20-100 experiments per month to outperform the competition.
3. Understand why users do what they do
George Lee, former Head of Growth at Instagram, gave a behind the scenes look at how his team grows, retains, and activates its user base. Talking to users is a huge part of their approach. They hop on the phone with people to get insight that is often missed with quantitative data. For example, George quizzed the crowd on these four questions:
Which country has the lowest number of faces per photo?
Who is the most followed person on Instagram?
Which major country has more Instagram users than Facebook users?
Why are there disproportionately more men than women on Instagram in the Middle East?
You’ll have to watch his presentation to get detailed answers. But basically, talking to people is how the team found out why Japan has the lowest number of faces per photo and no one in India cares about following Selena Gomez (even though she’s the most followed person on Instagram). The team seeks to understand why users do what they do, not just what they do. We marketers should do the same.
Growth doesn’t happen on its own. There’s always an underlying cause.
Don’t focus on active users. Focus on people who’ve never used your product, use your product but not really, are new to your product, and used your product then stopped.
Achieve product/market fit before investing heavily in growth.
4. Apply frameworks to your content marketing (not just hacks)
Susan Su is the Head of Marketing at Reforge, and has helped hundreds of startups with content marketing. She shared the content-market fit and the customer awareness cycle frameworks she’s developed over the years. Content-market fit is made up of 1) great content and 2) a market who wants it. The type of content could be articles, videos, webinars, books, or anything else we can read, watch, see, or hear. Don’t just default to blogging. You could be missing out on places where your audience already is, and content type opportunities to differentiate you from the competition. The customer awareness cycle is about moving people from unaware → problem aware → solution aware → product aware. Susan recommends that 10% of your content should focus on product aware (conversion) and 90% should focus on everything before that (nurture). I love this approach because it has a bigger picture view of content that doesn’t just focus on selling selling selling. It’s the long game of building trust with people _before _they are ready to buy. It requires intentionality, patience, and the heavy lifting of content creation you have to wait on to see ROI…but that pays dividends long into the future.
5. Think of the sales cycle like dating
Ryan Deiss is the brains behind DigitalMarketer, and brings a human-to-human approach to selling. In his talk on _How to Pre-Engineer Ideal Sales Conversations__, _Ryan pulls from multiple brick-and-mortar examples and even likens marriage to the sales process. His framework is made up of the ideal sales conversation, set up by a desirable preceding action, and fueled by entry-point offers. Here’s an example he used from 1-800-GOT-JUNK:
Entry-point offer: ”We’ll pick up your broken TV for twenty bucks.”
Desirable preceding action:** “Now that we’ve loaded up that broken, old TV…”**
Ideal sales conversation: “….is there anything else you’d like us to haul off since we’re already here?”
The framework applies to companies of all types and sizes—carpet cleaners, SaaS companies, and DigitalMarketer themselves. The major takeaway is the journey from stranger to customer should be seamless, with a natural “yes” along every step of the way. Or as Ryan would say, “The job of marketing isn’t to close the sale…it’s job is to start an ideal sales conversation.”
6. Make growth a company-wide initiative
Sean Ellis is the godfather of growth. He coined the term “growth hacker” back in 2010, and hasn’t looked back ever since. Sean’s talk focused on how agility is the key to driving rapid, sustainable growth. He covers the usual suspects…
Commit to testing, by running at least three experiments per week. This doesn’t mean to only let tests run for one week, but instead to launch new ones every week.
Rank your ideas** against each other by factoring in impact, confidence, and ease.**
Move fast to stay on top of new opportunities emerging every day.
These are solid ideas. But my favorite takeaway from his talk was that “growth is a company-wide initiative.” Sean believes growth is cross-functional with product, business development, marketing, sales, and success contributing their ingredients into the mix. It’s not just a marketing thing. It takes your whole company to optimize your pirate metrics (AARRR), after all.
7. Reduce involuntary churn through automation
Elena Verna is SurveyMonkey’s Senior VP of Growth. She covered retention by addressing a common problem: involuntary churn through payment details gone awry. Helping people update their credit card doesn’t sound half as cool as customer acquisition, but it does concretely affect the bottom line which is the coolest thing of all. Elena prescribed a follow up flow for when an annual subscription payment fails:
Day 1: Card gets rejected. Boo.
Day 5: First collection attempt. Email the user and try to process the payment.
Day 9: Second collection attempt. Email the user and try to process the payment again.
Day 12: Third reach out attempt. Just email.
Day 16: Payment gets collected. Woo. Backdate the annual subscription to the original renewal date.
Your success rate should be over 50% with most users taking the initiative to update payment details themselves. This plug-the-leak strategy is essential, since the older a business gets the greater percentage of its business comes from renewals.
8. Learn what causes rejection
Casey Winters is the mastermind behind Pinterest and Grubhub’s growth. When it comes to retention, he believes everyone says they’re doing it but nobody is really doing it. Not well at least. Casey walked through eight ways to improve retention pulled from his own experience:
Product improvements, which are usually more about reducing friction than adding features.
Onboarding and education, especially contextual messages that get people to the core value of your product ASAP.
Emails, sent with a personal assistant mindset instead of a marketer’s mindset.
Notifications. Start with transactional, and take baby steps to test other messages.
Customer service**. **Go out of your way to make sure you repair any negative experiences.
New platforms, like adding a mobile app.
Promotions (but be careful!), you don’t want to train users to expect deals.
Loyalty/engagement programs to build a moat around your most frequent and loyal customers.
The goal of each to learn what causes rejection, process the feedback, then make adjustments to grow retention. Casey walks through previous experiments in his presentation.
9. Partner with complementary companies to grow faster
Michael Sharkey is the CEO of Autopilot. I think I’ve heard of that company before. Mike showed how to get bigger faster through strategic partnerships. With the rise of unbundled tech stacks, companies are focusing on doing one thing and doing it well. Case in point: Instapage for landing pages, Pipedrive for CRM, and Autopilot for customer journey marketing. The world is moving away from all-in-one monolithic platforms that promise to “do it all.” Companies adopting the do one thing well strategy have an opportunity to partner up with complementary companies. The end result is faster growth by getting your product in front of audiences similar to yet different than your own. A few partnership tips:
Start small by working your way up to a full-blown partnership. Begin with a blog post or a webinar before talking about an integration.
Say “no” to partnerships that don’t make sense for your user base. Even if it’s with a big company.
Solve a problem** that highlights the best of yours and your partner company’s products.**
Stick to your core with the do one thing well strategy, no matter what.
10. Learn everything you can from your first 100 customers
Steven Dupree is an entrepreneur-in-residence at Trinity Ventures, and former VP of Marketing at SoFi, where his team scaled the lending program to $8 billion in less than three years. His presentation focused on where to spend your first $10k in marketing budget. First, invest in $0 channels for long-term returns. Think SEO, content marketing, and social media. For a young startup with upside, “zero cost” channels can yield long-tail returns at $0 cost-per-acquisition (excluding the cost of your time). Not to mention a $0 CPA is music to investor ears. Second, focus on finding active seekers. These are people who have a need for and are actively seeking your product or service. They’re way easier to pull in than uninterested buyers. Third, copy your competitors to see why they do what they do. You’ll be able to identify ways to differentiate, and plus it’s better than starting from scratch. Fourth, harass your early adopters (my personal favorite). They’re your biggest source of feedback and are most willing to talk with you. In his experience, conversations with them lead to clarity on where to hone your messaging and and which marketing channels to double down on. Fifth, test on the cheap across various channels. Scale, tweak, or kill new channels based on ROI. Sixth, mitigate business hurdles that prospects must overcome to become customers. A SoFi example…prospects need to a) qualify b) get off their butt and c) trust the company enough to pay. Seventh, learn from failure. Tests with potential for greater upside have a higher probability of failure. But have no fear, failed tests yields knowledge which informs future tests and improves ROI. Did you get a chance to tune into the Weapons of Mass Distribution presentations? Any big takeaways from these influencers? Let us know in the comments.