In this startup marketing series, Nathan addresses some of the key brand and marketing challenges that technology startups face on their journey to create a scalable and repeatable business model. The purpose of the series is to help technology startups with customer development by demonstrating how integral brand development and marketing are to the discovery, validation and execution phases of the business model. 

In Part 1 of this series, I outlined how scaling startups can build a strong, trustworthy brand identity. In Part 2 I delved into the concept of the customer and how startups can align their customer development efforts to solve customer pains, gains and “jobs to be done” supported by landmark methodologies: Clay Christensen’s milkshake and Marty Neumeier’s Brand Gap methodologies.

In this third and final segment, I’ll focus on customer relationship strategies, also known as the get, keep and grow (GKG) tactics of customer development.

  • Get: Employ awareness and acquisition tactics while reducing customer acquisition costs.
  • Keep: Reduce attrition and retain customers via loyalty programs, product updates and quality service.
  • Grow: Increase customer lifetime value by upselling, next-selling and cross-selling.

It’s also important to establish lifeblood metrics and respective pass/fail tests to avoid the metric vanity trap, and to build a strong viral coefficient, which gets customers to contribute, and to create high switching costs.

Once product/market fit has been found (the elixir where your value proposition aligns with the customer’s pains, gains and jobs to be done) and your business model is validated (by customers paying for your product or service in increasing and recurring numbers), it’s time to test your startup’s marketing engines.

Startups can begin by visualizing and aligning their team with the GKG funnel. They can then build a tactical plan of hypotheses in each GKG category. To test their hypotheses, startups must decide on which metrics will be the “lifeblood” metrics to measure and the respective target customer-acquisition costs (CAC), as well as the lifetime value (LTV) of their customers’ metrics. David Skok’s “Startup Killer: the Cost of Customer Acquisition” blog post and Dave McClure’s “Startup Metrics for Pirates” presentation contain important information on these topics.

Setting up pass/fail tests

Finally, startups can set pass/fail tests for each hypothesis to determine which tactics are driving customers through the GKG funnel for optimum CAC and LTV.

For instance, why spend $2,000 on search engine marketing acquisition channels to drive 50 customers into the funnel, when the same $2,000 spent on blogging and shareable content could drive 500 customers?

This also helps startups avoid the dreaded vanity metric trap, where a startup may have a lot of visitors converting via “get” tactics, but very low engagement via “keep” and “grow” tactics (for example, time spent, page views, visitor retention rate etc.).

At this point, startups may be asking: What paid, free and earned GKG media tactics can we choose from? Which tactics can be outsourced by partners or our customers? And what about viral and word-of-mouth tactics?

Paid tactics can be traditional TV, print, digital display, out-of-home or other marketing. The following graphic from The Startup Owner’s Manual summarizes get, keep and grow tactics nicely.

 get, keep and grow tactics
Get, keep and grow tactics.

Earned or free media

Since most startups don’t have a budget to spend on a Super Bowl ad, a strong focus on earned or free media (such as blogs, social media, search engine optimization, public relations, events and partnerships) will help in the beginning. One of the best infographics on this topic is the NOOB Guide to Online Marketing.

Measuring your success

No matter which tactic you choose, measuring it via a pass/fail test is critical. By doing so you ensure that an analytics dashboard is in place to capture lifeblood metrics, which helps you make resource allocation decisions and be able to start new tactics. It’s a cyclical process that allows you to properly deploy what little budget your startup may have in the beginning.

I recommend Google Analytics for early-stage startups and then Mixpanel or RJ Metrics for later-stage startups, depending on budget availability, team resources and level of complexity. Startups may also consider transforming the role of one of their founding team members into a “data chief” role: the analytics chief who will drive continuous improvement, not just in the customer validation process, but in perpetuity.

Be metrics-obsessed!

The bottom line is that startups need to be obsessed with the metrics that drive their businesses’ growth, constantly testing and challenging their hypotheses. Following these customer development tactics is not a magic solution to all of a startup’s marketing needs, but it will get you on the right path to success regardless of stage.

As with Parts 1 and 2 of this blog series, testing the tactics with each customer segment will reveal a solid marketing mix.

Resources, reads and events

Nathan Monk

Nathan is the Director, Growth Programming at MaRS. He helps our high-growth ventures grow by connecting them to the latest technology tools, resources and methodologies to scale in today’s competitive environment. Follow him @cowboytweets. See more…