Are Campaigns important for Start Ups?
Aug 09 2012, 17:00 | By SME Mentor
Customer Acquisition activities are as important to a start-up, as it is to any other company. We often want to indulge in elaborate Marketing activities that lead to sales. We usually focus on the channel than the outcome of using that channel. For instance, a mass media campaign or a social media campaign are things that sound like the right things to do, as they display the potential of reaching out to a lot of users. What we overlook is the impact of doing a mass media campaign. What gets overlooked is the impact a mass media campaign has on the current business state.
Running a start-up myself, I have three simple questions when it comes to deciding what customer acquisition activities I choose:
1. How relevant is that activity to my current business state?
I go about answering these questions to arrive at choosing the activity I want to indulge in. Let me explain these questions a little further.
a) Is it the right time: Early stage start-ups need to answer this question constantly. There is no point in indulging in a full-fledged online marketing campaign including adwords, banner ads, etc. when one has just launched a product. It just could be early. As an initial version of the product is bound to have some nick-knacks that need to be addressed. At this stage the start-up should have an early adopter acquisition strategy and not an online marketing campaign. It's more productive to reach out to a set of people who are keen on the product offering, are forgiving if something fails and will give honest and constant feedback. Many times premature indulgence in a campaign or activity will have a negative effect on the business.
b) Do we have the resources for it: To execute a customer acquisition activity / campaign you need various kinds of resources:
a. Money: Do I have such budgets right now? And if you arrive at the conclusion that this is a super beneficial campaign, post answering the top 3 questions, then How can I best execute it with the budgets I have?
Funnel: Every campaign has a unique funnel structure through which you can track activity, measure impact and hence the success of the campaign. This funnel is related to the nature of your business. But broadly, let us consider a product launch campaign run through a special landing page, and we use email to reach out to potential customers, then your funnel broadly will have the following stages:
a. No. Of people the mail went out to
Tracking this tells us how we did at each stage and the success of the campaign can be determined easily. The funnel also helps you question every stage of the campaign and see what's preventing users from moving to register.
Return on Investment is rather crucial. No point in spending a whole lot of money, where I cannot track anything nor figure out which part of the campaign I should modify to ensure there are maximum numbers of people who get to the end of the funnel. I have been in scenarios where the company has spend a few hundred thousand bucks on what's called 360 degree mass media campaign to find out that each customer was acquired by spending a few thousand bucks, but the customer through his life time would only five a couple of thousand bucks.
It is very important to closely do the math. If I spend X on a campaign, I should be in a position to gain back x+n where n is the profits of that campaign, during the campaign or earn back x+n*l where l is the average life time of the customer.
If you can pause a bit, think of these questions and their answers to your use case then I am sure you'll err towards efforts that are measurable and those that pose a good ROI. So, do you still want to do the print ad campaign?
Nandini Hirianniah: is the co-founder of The Morpheus, India's premier start-up accelerator and micro fund. She works closely with start-up teams ranging from an idea to 2 years helping them bootstrap & build useful products. Follow her twitter updates @nandinih
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May 22 2013, 21:18
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