Growing a Small Business
Today we are going to talk about startup growth. This is part two of our growth articles, which you can find here. The reason I know any of this is because I'm the CEO of Slidebean, and for our first few years, I handled most of our initial marketing experiments. In our last article, we talked about the 19 growth channels available in the world, so for this one, I am going to talk about the ones that we've tried, the ones that failed, and the ones that worked.
Big disclaimer, these tactics apply to our particular case: a SaaS company with a presentation design product that saves (a tremendous amount) of time. These might or might not apply to you, but hopefully, they can give you some ideas. Another detail is that we measure these tactics by their success in terms of ROI. Time (which means money) spent, and revenue obtained.
In the early days, we focused a lot of time and effort on being featured by the press. Our first TC publication gave us around 10,000 sign ups- but after that, most of our PR has had low impact. We've been in TC a couple more times, and TheNextWeb, and others- but the impact in terms of revenue has never been clear. While there's a brand awareness benefit, it's very intangible.
This brings me to a side topic, which is Brand Awareness vs. Direct Response. There are two broad categories of marketing efforts to position a product or service. Direct Response refers to all the campaigns that have a measurable impact in revenue, or at least in leads. You can very clearly calculate the cost of the campaign, vs. the revenue received or leads obtained.
Brand Awareness campaigns are intangible. You can measure the impact of impressions, or top of mind, but there's no way to know how much revenue gets generated. Many Social Media efforts, billboards are brand awareness campaigns. Don't get me wrong; Brand Awareness can go a long way- they empower your brand, which translates into measurable KPIs such as conversion rates. However, it's a long term bet, and we, startups, need quicker results.
I believe that a tech startup should spend 3/4 of their time and money on Direct Response, and the remaining 1/4 on brand awareness. That's the way we do it, at least. Press has been a Brand Awareness campaign for us, for the most part. And that 1/4 of our marketing efforts is currently going to other campaigns that have more impact.
The same way people become ad-blind, we are much better at detecting Promotional emails. And Google is too. We've never seen a lot of success with emails. We have around 1,000,000 emails from people that have signed up for our product or our newsletters at some point, but it's tough to provide value to such a massive email base.
Also, we have to be careful about getting flagged. Even though we follow all the guidelines of the SPAM act: unsubscribe button, etc... Gmail gets pretty sensitive if we send a lot of emails in a short period, and starts sending them to the spam filters.
This happens, likely, due to low open rates and some users clicking that nasty 'mark as spam' button. There's also the cost of a mailing system that can hold 1,000,000 emails. It's in the thousands of dollars. We prefer, instead, to focus emails on the audience of active users who want to hear from us, and email works great to stay in touch with them! But we mustn't abuse it, and we haven't been able to leverage it to positive ROI.
Business development is a must- and we do it- but it's not a channel to scale our product. Even though most of our customers are small businesses, our customer acquisition cycle is B2C. The only way to win is to get thousands of customers through our funnel, and that is more easily achieved with the channels we'll cover in a minute.
We have an affiliate program, you can make around $30 for every customer you bring to us, but so far, only a handful of users have come from our affiliates. Not really something we rely on to scale.
We've done a few meetups and love doing them- they don't translate into sales. More of a Brand Awareness thing. Some of that 1/4 of the time/budget will continue to go to these.
I do public speaking events all the time, and I'm always thrilled to be invited- but It's really hard to get people to take action after listening to you on stage. Once again, a Brand Awareness thing.
I think this is one of the most critical growth channels out there. Let me explain. The core difference between Google Search ads and display ads is a concept called Moment of Intent. Facebook is REALLY good at targeting people based on their behavior. We know very well how bad that can be.
However, when you see an ad for a presentation platform on Facebook, or for any product for that matter, it's disrupting your experience. You're there to do something else, and these ads are in the way. You are not ready to buy; you are not even planning to buy- the moment of intent is far away.
Search ads, on the other hand, are well targeted at the right moment of intent: if you are on your cell phone, looking for a car towing service, you are very likely in need of a towing service right now. If you are looking for a platform to make a pitch deck, you know you need a pitch deck, you are just looking for the service to help you with it. The decision is made — the moment of intent.
This is why search ads are generally very expensive, but at the same time, they are one of the most direct ways to convert customers. We spend over $100,000/yr on Search ads and make at least $300,000 in revenue from it.
If you can crack the code on SEM, then the next obvious step is SEO. We made a video about this, on our very early Youtube channel- where a drunk me tries to explain this while drinking shots. Not our best Youtube times. The idea here is, only about 10% of Youtube Searches end up clicking an ad. The other 90% goes for organic results. The problem is, appearing in those organic results takes a lot of work: years of optimization, hundreds of articles, and thousands of dollars.
So... you only want to do that when you know, for a fact, that the audience is there, and that it's going to convert. That's where SEM is vital. Basic steps:
Our engineering as a marketing product was born as a new startup idea, but it ended up becoming a fantastic lead generator and brand awareness/strengthening mechanism. It's called FounderHub.
It's basically a checklist for starting a company with some excellent documentation on how to solve the legal bits, the business strategy, and the launch. It's free, but by the time you get to fundraising, we hope you'll consider our help :)
You are watching our content marketing efforts right now. And they work. To give you an idea, this channel now gets around 250,000 views per month, and it's still growing. Do you know how much those Youtube sponsorships cost? It's usually a 5-digit number. And we get the same exposure for free.
We ask every one of our customers where they heard about us. In September 2019, at least $20,000 in revenue came from people that specifically said they came from Youtube. It took us years to figure it out, we still spend around $5,000/mo in making these videos (we made a video about that), but it's all worth it.
Before Youtube, our content marketing focused on the blog- and it worked as well. It was an essential part of our SEO strategy. But who reads blogs anymore? We also come up with actionable items, like telling you that if you want your presentations to look like this, you can sign up for one free month on any of our plans by using the link in the description. See?
We mostly use these to close the conversion loop. Maybe you watched this video, and then you start seeing our ad everywhere. Well, that's a lot better, and cheaper, than just pushing those ads to strangers who have never seen our logo. We also use these display ads as part of our onboarding. Different users in different parts of our sales cycles see ads to help but them back into the funnel or show a feature that they might be missing.
And that is how Slidebean uses the channels of growth. We'd love to hear what your company uses, and if you want me to dig deeper into any of these, let me know in the comments.
This is a functional model you can use to create your own formulas and project your potential business growth. Instructions on how to use it are on the front page.