Choosing a Customer Acquisition Channel

I imagined creating a matrix for a tech startup called "TechWiz," specializing in a cutting-edge productivity app. It’s in the early phases, it has limited funds, and it needs to understand user behavior as fast as possible.

So, it’s priorities were learning, cost efficiency, and rapid implementation. It’s constraints were its niche target audience (digit nomads and freelancers), budget, and limited team resources (TechWiz has a small team of people).

Step 1 was choosing TechWiz’s highest priority. According to the Power Law of Distribution, only one channel will be responsible for 70% or more of acquisition. Here’s my reasoning:

TechWiz’s highest priority should be learning. This is the best priority since their startup seems to be pre product-market. TechWiz can’t simply put their product out in search of a market because putting the solution before the problem will cause future issues. They seem to have identified their audience, which is a niche market of remote freelancers and digital nomads, so they need to take the extra steps to define their target audience’s problems and motivations. 

Finding the answer to questions like “How do we keep nomads and freelancers engaged with us?” and “What is their typical behavior?” will be crucial to TechWiz because they need every percent of customer retention they can get (the dollars saved will add up each year). 

TechWiz is really not in the position to waste money if they start optimizing channels before without doing the proper research. They have limited funds for marketing initiatives. That’s why learning takes precedence in TechWiz’s earliest stages. It will help prevent misdirection of funds. 

Step 2 was considering how constraints will impact the choice of marketing channels. I thought it through it this way:

TechWiz’s niche target audience will require channels that are high in targeting. They can’t afford to market too broadly since it’s at the risk of missing its audience entirely or not converting enough people into customers. TechWiz should also consider channels with low input and output times. It’s likely that such channels aren’t difficult to operate if they can accomplish both quickly, as there's not as much to learn about the channel. The team, which is small, will therefore have less on their plate. 

Less input and output times will allow more time to be spent on testing and adapting quickly, which will optimize for learning, and that is TechWiz's highest priority anyways. However, the cost of exact targeting and low input/output times may be higher than other channels. TechWiz might have to make this trade-off even though they have budget limitations. Or, they can focus on cutting costs at the future expense of niche customers and more strain on the team’s resources. 

The rest of the steps involve opening up a spreadsheet tool (I used Google sheets), filling out the header column with potential channels, and filling out the header column with attributes of channels. From there, I filled in the rest of the boxes based on TechWiz's priorities and constraints.

I used process of elimination to choose two channels for TechWiz to test out. Those are SEM and organic social media.

Eliminate SEO since it has high input and output times with only a medium amount of targeting. Eliminate influencer partnerships because the input time is high, and it costs a lot, despite doing well in the targeting department. Eliminate email marketing because the input time can be high, and it will create a lot of work for the small team. In addition, the targeting is low. 

That leaves TechWiz with SEM (search engine marketing) and paid social media, or organic social media, as hypothetical channels. The startup won’t know without running some test firsts, but SEM seems to be the best bet for them. It can hone in on the right audience very precisely, so that Google advertisements, for example, can reach potential customers. The input and output times are also shorter than SEO. Also, SEM doesn’t have to be expensive if you don’t go after highly competitive keywords. TechWiz could use this channel without going over their budget. 

While paid social media offers excellent targeting and control with minimal input and output times, it does tend to be very costly. That is why TechWiz should use organic social media (media without paying for extra features). They can build out their online platforms and still collect an audience. Then, when their company grows and makes more money, the team can revisit the idea of using paid social media as a channel. 

There you have it! My first time choosing a hypothetical customer acquisition channel is complete.