5 Steps to Choose Your Customer Acquisition Channel
Choosing the right customer acquisition channel is critical for any startup's growth strategy. Here's a step-by-step guide, illustrated with examples from Boundless, a company that provides free digital alternatives to expensive college textbooks.
What Are You Optimizing For?
Start by asking: "What am I optimizing for?"
Your objective could vary based on your business stage or current needs. Common goals include:
— Learning: Understanding user engagement, retention, or monetization (ideal for pre-product-market fit).
— Volume: Demonstrating scalability or acquiring enough users for meaningful data.
— Cost: Minimizing customer acquisition cost (CAC) to maximize budget efficiency.
What Are Your Constraints?
Identify the factors limiting your choices. Common constraints include:
— Time: Do you have a short time window to reach your audience or limited runway?
— Money: Are you bootstrapped or well-funded?
— Target Audience: Are you targeting a specific group, such as a niche demographic?
— Legal/Regulatory: Are there potential legal roadblocks in your industry?
Set Up Your Channel Matrix
Organize potential channels into a matrix to systematically evaluate and compare them.
Create the Framework
Use a spreadsheet to list potential channels in rows (e.g., SEO, SEM, content marketing, display ads). Break down broader channels into specific tactics for precision.
Define Attributes
Add column headers for channel-defining attributes. At a minimum, include:
— Targeting: Ability to reach your exact audience.
— Cost: Upfront and ongoing costs.
— Input Time: Time required to set up.
— Output Time: Time needed to see results.
— Control: Ease of turning the channel on/off.
— Scale: Potential size or reach.
Fill the Matrix
Research each channel and grade each attribute as low, medium, or high based on your findings.
— Google Adwords: High targeting, medium cost, low input/output time, high control, medium scale.
— Content Marketing: Medium targeting, low cost, high input/output time, medium control, high scale.
Prioritize Channels Based on Goals and Constraints
Sort channels based on how well they align with your primary optimization goal (Step 1) and constraints (Step 2).
— If cost is a constraint, prioritize low-cost channels.
— If time is a constraint, choose channels with low input/output times.
— If targeting is critical, focus on high-targeting channels.
Choose 1–2 Channels as Hypotheses
Select one or two channels as your primary hypotheses. Look for channels that best align with your goals and constraints:
Ideal Channel Attributes:
— High targeting
— Low cost
— Low input/output time
— High control
— High scale
After choosing, focus on designing and running experiments to validate the channel's effectiveness.
Key Takeaways
— Clarity of Goals: Decide whether you’re optimizing for learning, volume, or cost.
— Understand Constraints: Time, money, and targeting will shape your options.
— Systematic Evaluation: Use a channel matrix to make informed decisions.
— Hypothesis Testing: Treat your chosen channel as an experiment, refining your strategy as you go.
This process provides a structured, data-driven way to identify and test acquisition channels, minimizing wasted effort
Choosing the right customer acquisition channel is critical for any startup's growth strategy. Here's a step-by-step guide, illustrated with examples from Boundless, a company that provides free digital alternatives to expensive college textbooks.
What Are You Optimizing For?
Start by asking: "What am I optimizing for?"
Your objective could vary based on your business stage or current needs. Common goals include:
— Learning: Understanding user engagement, retention, or monetization (ideal for pre-product-market fit).
— Volume: Demonstrating scalability or acquiring enough users for meaningful data.
— Cost: Minimizing customer acquisition cost (CAC) to maximize budget efficiency.
What Are Your Constraints?
Identify the factors limiting your choices. Common constraints include:
— Time: Do you have a short time window to reach your audience or limited runway?
— Money: Are you bootstrapped or well-funded?
— Target Audience: Are you targeting a specific group, such as a niche demographic?
— Legal/Regulatory: Are there potential legal roadblocks in your industry?
Set Up Your Channel Matrix
Organize potential channels into a matrix to systematically evaluate and compare them.
Create the Framework
Use a spreadsheet to list potential channels in rows (e.g., SEO, SEM, content marketing, display ads). Break down broader channels into specific tactics for precision.
Define Attributes
Add column headers for channel-defining attributes. At a minimum, include:
— Targeting: Ability to reach your exact audience.
— Cost: Upfront and ongoing costs.
— Input Time: Time required to set up.
— Output Time: Time needed to see results.
— Control: Ease of turning the channel on/off.
— Scale: Potential size or reach.
Fill the Matrix
Research each channel and grade each attribute as low, medium, or high based on your findings.
— Google Adwords: High targeting, medium cost, low input/output time, high control, medium scale.
— Content Marketing: Medium targeting, low cost, high input/output time, medium control, high scale.
Prioritize Channels Based on Goals and Constraints
Sort channels based on how well they align with your primary optimization goal (Step 1) and constraints (Step 2).
— If cost is a constraint, prioritize low-cost channels.
— If time is a constraint, choose channels with low input/output times.
— If targeting is critical, focus on high-targeting channels.
Choose 1–2 Channels as Hypotheses
Select one or two channels as your primary hypotheses. Look for channels that best align with your goals and constraints:
Ideal Channel Attributes:
— High targeting
— Low cost
— Low input/output time
— High control
— High scale
After choosing, focus on designing and running experiments to validate the channel's effectiveness.
Key Takeaways
— Clarity of Goals: Decide whether you’re optimizing for learning, volume, or cost.
— Understand Constraints: Time, money, and targeting will shape your options.
— Systematic Evaluation: Use a channel matrix to make informed decisions.
— Hypothesis Testing: Treat your chosen channel as an experiment, refining your strategy as you go.
This process provides a structured, data-driven way to identify and test acquisition channels, minimizing wasted effort