The growth secret of successful customer acquisition
Why starting your growth strategy with channels doesn’t get you anywhere
By Nikolas Vogt
Founder, Growth Academy | Ex-Growth Marketing Lead, Google | Guest speaker, Santa Clara University
Unfortunately, most acquisition strategies start with channels and where to spend money — like ads, social media, and SEO. According to Myk Pono¹, author of the Marketing Playbook, the standard acquisition process often looks like this:
Such a reversed acquisition approach results in putting the customer audience last. Some companies also assign teams to specific channels which certainly has advantages when it comes to specialization and efficiency. But organizations built around channels are prone to neglect important parts of the customer experience and instead focus on their own initiatives. This often leads to less collaborative culture, inconsistent messaging, and ultimately less value for customers.
Conversely, during my time attending executive education at University of Pennsylvania Eric Bradlow, Professor of Marketing and Analytics, stressed that it is all about “finding the right customers and maximizing value for them”, see his fantastic GBH article.²
This leads us to a more promising way to structure your acquisition process. It starts with the customer and audience segmentation before moving on to messaging and channels.
That’s why the first and most important part of your acquisition strategy should be all about audience segmentation and defining the customer. If you want to learn how to actually design a customer first growth strategy, join Growth Academy and learn growth strategies to acquire and retain customers from leaders at Google, Amazon, TikTok, Spotify, Skyscanner, and more.
Here’s a quick thought experiment, which we call the 30 of 40 example. The chart below shows the scenario of us going after 40% of the total addressable market, marked in light orange, and being able to acquire 30% of it, as depicted in the dark orange portion.
So now you might think that acquiring a 30% market share sounds hard. Why shouldn’t we target the whole addressable market and gain “just” 10% of 100%?
You most likely won’t be able to grab 10% of the TAM, because your acquisition efforts won’t be targeted enough, and hence not relevant. This makes them not only less effective, but also very expensive.
And even if you’re able to grab a 10% market share (marked in yellow here), the 12% market share resulting from 30 of 40 is not just bigger but, most likely, also easier and cheaper to acquire.
We hope this thought experiment showcases why the secret of successful acquisition lies in systematic segmentation based on a “customer first” mindset. This concept is just the tip of the iceberg when it comes to growth strategy. If you want to learn more on this and many other powerful growth frameworks, check out our growth strategy courses designed by leaders from Silicon Valley and the European Tech Scene (Google, Amazon, TikTok, Spotify, Skyscanner, and more).
Sources:
- Myk Pono, 2018, Author of the Marketing Playbook https://www.mykpono.com/about/
- Prof. Eric Bradlow, 2019, Professor of Marketing and Analytics at University of Pennsylvania, GHB Insights
https://gbhinsights.com/binge-consumption-and-its-impact-on-customer-lifetime-value/
