Don’t diversify channels. Double down on growing channels.
There’s a school of acquisition thought that it’s better to cap investment in a specific marketing channel to reduce the risk to the business. This is particularly true when running acquisition on algorithmically driven platforms, e.g., Facebook.
Instead double down on what’s working. If a channel has doubled in acquisition volume, it can be done again. Double a channel 7 or 8 times, and now there’s a very solid path to scale.
I’ve scaled acquisition from 5 customers a month to over 2k but continuing to repeat what was working.
Businesses are valued on revenue levels and revenue growth.
Double Down Within a Channel
It’s possible to down down within a channel, not just on a channel.
This plays out on a high level (which channel) as well as a micro level (which targeting or audience). Once a channel has doubled, it can almost always double again. I’ve had the same keyword go from a handful of conversions to 100 conversions a month.
The levers for increasing gains are almost always the same:
- More impressions
- More clicks
- More conversions
- Higher lifetime value
This often translates down into:
- Targeting (keywords, audiences, national v local)
- Creative
- Landing experience
- Pricing
- Merchandising (whether it’s a good or service)
- Retention efforts
Running the growth process to double again is even easier than doubling the first time because the team has built out more processes. Come up with the growth plan, the hypothesis, and the testing structure.
Diversify Opportunistically
Develop new channels. Test out new paths to scale. Do it in a systematic way driven by opportunity not by fear. An opportunity driven approach is formed with a solid hypothesis on why a certain channel should work:
- New product experience that enables channel market fit
- Competitive insight shows that a similar company that’s successful
- New platform features that serve your business well
- New LTV that opens up previously expensive channel
- New attribution methodology that makes it possible to judge success (my favorite)
Diversify, but do it with a specific reason on why it will work and then try it out.
Dealing With Algorithm Changes
Algorithms change. Acquisition numbers will fluctuate as algorithm changes, sometimes by up to 50%. This is a scary feeling. Watching a dashboard show a 50% drop and then explaining that to leaders in the company. It creates an internal sense of panic.
Act with a clear, calm plan in this case:
- Gather the data – understand what was impacted, by how much
- Gather related writing – many platforms share insights on what drives decision making
- Reach out to leaders at other companies – were they affected? how much? what theories do they have
- Try reaching out to relevant leaders AT the platform company (Google, Facebook, Apple)
Come up with the plan on what to fix. Explain why it’s important, the reasoning behind it, and go out and execute. Sometimes big, scary changes might be needed. It’s worth it – they can always be undone.
Focus on Growth 