WRITTEN BY: CHRIS BLANSHARD
We get this question a lot here at Innovate Niagara. Our clients have spent countless hours validating their idea, building a business model, and making constant tweaks until they are ready to bring their idea to market. Once ready, they want to grow their customer base in a way that yields the highest return on investment, as they are often bootstrapping and need to do more with less.
We use a 5-step approach when answering this question for two reasons:
1) It provides structure in a chaotic world. The life of an entrepreneur can be tough, you are required to fulfill many roles at once and time is valuable.
2) It focuses on testing ideas with minimal cost and time commitment, so you can be sure before committing.
Step 1: Set a Goal
Your goal will depend on your company’s wants and needs. Some examples can include:
1) Acquiring a certain amount of customers
2) Reaching your “break-even” point
3) Reaching a certain amount of revenue
Start to think about the time, people, and capital needed to reach this goal.
Step 2: Brainstorm Channels
List any marketing channels you can think of that could potentially reach your target market. Try not to pre-judge or disregard any of them at this time. Once complete, there are five question you should consider:
1) How much would it cost to acquire a single customer using each channel?
2) How many customers could the channel realistically yield?
3) Can you reach your target customers through this channel?
4) What is the time needed to execute on each channel?
5) Which team member will be in charge of this channel?
Once complete, narrow down your list of channels to your top 3.
Step 3: Test It
For each of your 3 channels design a short/cheap test utilizing a similar tactic for each. We recommend roughly 2-4 weeks in duration and a maximum of $1000 dollars per channel. At a minimum, track the following:
1) The number of customers that channel offers
2 ) Conversion rate
3) Cost of acquiring one customer
Step 4: Focus
Identify which channel did the best. Eliminate the remaining two channels and focus on 3 individual tactics for the winning channel. Test those for 2-4 weeks and record relevant data. Focus on the winning tactic(s) going forward.
Step 5: Repeat
This methodology needs to be repeated over time for two reasons:
1) Your goals will change
2) Your test results will change as the market is ever changing and unpredictable
Are you ready to grow your customer base? Learn more about becoming an Innovate Niagara client at www.InnovateNiagara.com!
Chris Blanshard is a Business Analyst at Innovate Niagara, a not-for-profit private corporation that connects innovators to the people and programs required to bring their innovations to market through a suite of in-house programs, resource partners, and network of incubation facilities.
This article originally appeared in Business Link Niagara.