You have a lot on your plate as a startup or emerging business. You’re trying to build the right product, grow your user base, and keep your existing customers happy. You’ve got a lot of moving parts that all need attention at once-but few are as important as acquiring and retaining customers. As Sam Altman, one of the founders of YC, said, “Growth solves (nearly) all problems.”
Customer acquisition is a key challenge for all companies, but startups face unique challenges.
Startup marketing is a very different beast than marketing for more established businesses. The difference lies in the fact that startups are trying to get their first customers by making a business proposal, and have little data on which to rely. This means they’re forced to test different ideas quickly, learn from what works and what doesn’t work-and ultimately, find success by trial-and-error.
The challenge of customer acquisition is exacerbated by the fact that startups are often operating with limited resources at their disposal. As such, it’s important for these companies to utilise every tactic available to reach a wider audience; this includes using performance marketing as part of their overall growth and revenue generation strategy.
What is performance marketing?
Performance marketing is a way of measuring the effectiveness of your marketing and advertising. It’s a way of measuring your marketing campaigns’ ROI (return on investment) and ROAS (return on ad spend). This can help you to understand how well your marketing is working, and how to improve it.
Performance marketing Vs. Growth marketing
While performance marketing is driven by return on ad spend, growth marketing is a full-funnel approach to marketing. The performance focuses solely on online marketing efforts and any payment made for it is based on the success of a predetermined action. Whereas, growth marketing includes various methods of building awareness and converting users into loyal customers. In other words, performance marketing is best for the bottom of the marketing funnel and while growth marketing includes performance, it also covers all stages of the funnel to accelerate business growth.
Why is data & analytics so important for performance marketing?
With the right data & analytics in place, you can make smarter decisions about your startup’s performance marketing efforts. You’ll be able to:
- Drive better customer acquisition by knowing what keywords and audiences are driving traffic and conversions for your business.
- Prioritise your efforts by understanding which marketing channels are generating revenue, and where there’s room for improvement.
- Predict ROI (Return on Investment) and ROAS (Return On Ad Spend) based on your past performance.
How do you choose the channels that are right for you?
In order to effectively choose the channels that are right for your business, it’s important to understand what types of channels will work best for your brand. While there are no hard and fast rules regarding choosing which channels are right for you, data-driven decision-making is one of the best ways to approach this.
Making informed decisions based on data can be tricky when you’re trying to figure out what channel mix is ideal for your business goals. Your customers’ behaviours and preferences may change drastically over time; therefore, it’s important that these factors are always taken into account when putting together a marketing strategy. Create tailored content that resonates with your audience’s needs and expectations.
It’s also important to consider the resources available to you and your company and the goals of your marketing efforts. For example, if you’re a small business with limited capital, it may not be feasible for you to invest in multiple channels at once. One solution is to create a channel mix based on what makes sense for your brand and budget.
How do you track and report performance marketing?
There are a number of ways to track and report on performance marketing. You should look for:
- A/B testing different creatives and copy combinations based on results from previous campaigns.
- The overall ROI of your current performance marketing campaign (or campaigns). This can be measured in terms of sales, leads or sign-ups.
- Conversion rates for different landing pages and offers. You may want to set up several tracking codes to see what content works best with this audience.
Each company will have its own unique customer journey so it is important to monitor the different stages of that journey and how each stage is performing. This will help you identify areas where there is a drop off so action can be taken and avoid any performance marketing challenges.
Where does performance marketing fit into the overall customer acquisition funnel?
It’s part of the customer acquisition funnel, which means that performance marketing should be used to find out what people are interested in and what they’re looking for. The whole point of performance marketing is to learn about your audience using data so that you can better cater to them and understand what they want.
Data sits at the centre of any performance marketing strategy, which makes understanding this data extremely important. That is where analytics come in.
Data analytics can help you make smarter decisions about your startup’s performance marketing efforts.
Data analysis can help you make smarter decisions about your startup’s performance marketing efforts. This includes:
- Understanding your customer acquisition funnel.
- Understanding the lifetime value of each customer and how much they are worth on average.
- Understanding the lifetime value per channel.
- Understanding the lifetime value per channel per marketing campaign will help you determine where to allocate more resources to maximise revenue from advertising across different channels (such as Facebook Ads, Google Ads, etc.).
As the world becomes increasingly digital, we are all becoming more data-driven. This is especially true in business. When it comes to marketing, the most successful companies will be those who use data to inform their decision-making process and optimise their customer acquisition efforts.
In fact, the companies that are most successful at marketing are those that understand the value of data. They use this to inform their decision-making process, optimise their customer acquisition efforts, and ultimately increase revenue.
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