How to Create a Customer Acquisition Plan for Startups

“So, how do you plan on acquiring customers?”

I’ve been talking to a lot of people about Attach and I’ve heard this question more than a few times, especially as a marketer.

If you’ve ever been in a meeting with potential investors, applied for a startup accelerator, or filled out a business model canvas, you’ve probably come across this question before. Of course everyone wants to know how you’re going to grow, but it’s the wrong question.

What’s the right answer?

Cold emailing? SEO? Content Marketing? You could list out every single channel, describe how you’re going to include viral hooks, work a unique PR angle, but at this point you’re just shooting in the dark.

The only true answer to this question is to confirm that you’ve committed to an agile growth process. Besides, “no plan survives first contact with customers” – Steve Blank.

Your customer acquisition plan should evolve as you grow. In fact, it MUST. What works initially might not work later on, and what doesn’t work now might be worth revisiting in the future.

From the book Traction,

“Startup growth happens in spurts. Initially, growth is usually slow.
Then, it spikes as a useful traction channel is unlocked. Eventually it flattens out again as a channel gets saturated and becomes less effective. Then, you unlock another strategy and you get another spike.”

This means your plan must be dynamic, and to do that you must develop a process that will continue to move you forward.

Therefore, the question should be: “have you defined a process to acquire customers?”


Growth vs Growth Hacks

When you first venture into customer acquisition, you probably start off by trying random tactics.

You run a Facebook Ad here, write a blog post there, or try the latest growth hack you read about.

After experimenting with a few of these ideas you realize you’re probably not making much of an impact. You can’t randomly try different tactics and expect up-and-to-the-right success, you need a strategy behind them.

So you put together a plan of attack, and you start organizing your efforts into a spreadsheet and track your metrics.

After running with this for a while, you realize it’s extremely hard to continuously improve upon your efforts. You just ran a Facebook Ad campaign for 2 weeks… now what do I do?

Only then do you realize you need a goal driven process behind it. Once you understand that, it all starts to make sense.

Once you establish your goals,
you create a process / system to work within,
then you fill it with strategy / ideas to align with your goals,
lastly, you’ll break those down into specific tactics to execute…

…and not the other way around.

Tactics aren’t sustainable, their effects will always tail off. A process is sustainable and continuous – as long as you are committed to it.

‘Growth Hacks’ are strategy and tactics. ‘Growth’ is a process.

growth vs growth hacks
So here’s how to avoid those mistakes and create a customer acquisition plan to grow your startup.


How to create your Customer Acquisition Plan

A good customer acquisition plan starts with some important prep work: define your ideal customer, your goals, your customer acquisition funnel, and your metrics. From there, you create your own growth process from which to fill out and implement your plan.

1. Define your ideal customer

Everything starts with identifying your ideal customer profile. From finding who they are and how to reach them, to how to talk and sell to them.

Attracting the right type of customers makes everything else that much easier, so figure out what ‘right’ means for you. Lincoln Murphy has put together a comprehensive framework to create your ideal customer profile.

2. Define your goals

Goals shape everything from your strategies, to your tactics and daily focus.

From the book Full-Scale,

“Determine goals, milestones and priorities. These three tasks make people more productive. Productivity makes better use of your time. Time is directly related to growth. Growth is why we’re here. Therefore, growth is goals, milestones and priorities.”

Your goals might be monetary, user count, or activity based goals. We all know about S.M.A.R.T. goals and they definitely apply here, but it’s also important that you only focus on 1 to 2 goals at any given time.

For customer acquisition, your goal might be to get more visitors, convert more visitors into leads, or convert more leads into paying customers.

3. Define your acquisition funnel

Break down the journey your customers must take to pay you. This helps you identify where your funnel might be leaky, and as a result, identify the biggest opportunities for quick wins. If this means drawing out a funnel, then grab a piece of paper and draw it out.

Think of your entire acquisition funnel as lots of smaller funnels.

For example, if you’re planning on running multiple landing pages and you’re sending traffic to them from SEO, content marketing and paid acquisition, each of those channels are their own funnel to be measured individually.

4. Know your metrics

Figuring out your key business metrics is core to the plan.

Without knowing your key metrics, you might know “I need to increase traffic” but you aren’t sure what levels you need to get to. When you do know your metrics, you know what numbers you need to hit, and that guides what strategies you’ll focus on to have the best chance of hitting them.

But if you’re just starting out, chances are you don’t know these numbers, and that’s fine too.

Use external sources as a rule of thumb to aim for. If you’re running a SaaS model, take Groove’s SaaS Conversion Survey results on key metrics from 1500 responses as a benchmark:

SaaS Metrics

The awesome Ad Spend Calculator is a free tool that helps you figure out your business metrics by working backwards from your average revenue per user and churn rate:

Business Metrics Calculator

It also tells you how much you can afford to spend to acquire a new customer. So once you start implementing campaigns, you’ll know fairly quickly whether something is worth pursuing or not.

Gary Gaspar put together a simple spreadsheet for SaaS that you can plug your numbers into and play around with:

Saas Forecast Spreadsheet

Happy Bootstrapper put together a MRR projection spreadsheet for SaaS here.

For a more comprehensive spreadsheet, check out this KPI Dashboard for early stage SaaS startups by Christoph Janz.

Using the spreadsheet example above, you can see exactly how you can reach a goal of $5k MRR in 6 months.

These examples are specifically for SaaS businesses. If you’re running another model you’ll have to change the spreadsheet accordingly but the same principles apply.

The goal here is to develop a hypothesis to start with and work from.

Comparing yourself to others isn’t usually that valuable and establishing your own baseline quickly is key. But using benchmarks gives you a rough idea of what to aim for in the meantime.

5. Track (almost) everything from day one

The best customer acquisition plans have measurement strategies organized in advance.

Most startups don’t begin this process early enough, and they pay for it later.

Even if you don’t use the data right away, it will become invaluable when you have the time to dig into it, or start new campaigns in the future and want to see if they have an impact.

It doesn’t matter if you use a paid analytics tool, Google Analytics, or a simple acquisition channel spreadsheet – what matters the most is that you start to build the history as early as possible.

How do you know what you need to track? While you can measure just about anything, it’s not a good idea to measure everything:

  • Begin with your goals in mind: prioritize when and what to measure based on the answers you need to make decisions that will help you grow.
  • Measure against your sales funnel: make sure you’re tracking all the steps in your funnel. The AARRR metrics should be tracked at a minimum.
  • Track to validate experiments: before you run any marketing campaign, be sure you know exactly how you will measure your success and track those metrics before you start.

Segment have put together a best practice tracking plan that I recommend following.


Reverse engineer your growth

Now that you know your goals and your metrics, you can combine these with the growth process to complete your plan. Whilst there are a few ways people run their growth process, the underlying ideas are the same and generally follow these steps:

growth process diagram

Using your longer-term goals and your current metrics, you can reverse engineer them to figure out where you should focus your efforts. Look for bottlenecks in your metrics: is your visitor to trial rate low? Is your churn rate high? Do you need to drive traffic?

If you want to improve a certain metric, figure out what part of your sales funnel will most impact that metric. Then brainstorm on that area with ideas to test, there could be a million ways to improve it.

Start by asking questions: To reach our goal, what do we need to improve right now? How can we improve it? If your traffic is low, focus on tactics that will increase visitors. If your visit to free account rate is low, focus on tactics that will improve signups.

This is how you generate tactics to execute on. But this time, these tactics are no longer random, they are specific, implement with purpose to drive progress towards your high-level goals and milestones.

1. Create your growth ideas list

List out any ideas you have to increase your metrics at each stage of the funnel. These could be tactics you read or hear about, tactics you see that successfully work for others, or ideas you brainstorm yourself. This is your dumping ground for any possible tactic you think might work for your business. These are your strategies / ideas to implement.

Tactics are the specific ways you’re going to execute on your strategy.

Your strategy might be to run Facebook Ads, but you tactic might be to:
Use custom audiences, optimize for click-throughs, advertise against top of funnel blog-posts, or advertise an upcoming webinar. These are all derived from a specific strategy and goal, which are identified through the process.

Pull out these specific tasks and put them into your to-do list.

2. Prioritize your ideas

Especially when starting out, you want to do a million things RIGHT NOW. You’ll eventually want to see all your metrics improve, but you should work on improving 1 metric at a time.

I can’t stress how important this is. When you spread yourself too thin you’ll never take the time to focus on your task and you’ll do everything with half a brain. You’ll become stressed and demotivated because you won’t see results.

Pick one tactic to execute, send it through the funnel and see it through to the end.

Which ones do you focus on?

Play to your strengths to get the ball rolling. If you know you can create great content, focus on that to start. It takes time to learn the ropes on a new channel (let alone be effective), so get the quick wins first before trying channels you have little to no experience in.

Your bottlenecks help you to determine how to spend your time. If your immediate goal is to increase website traffic, then focusing on email marketing isn’t going to bring in more traffic as well as other channels can.

Look at how much of an impact it might have, how confident you are that will happen, and how many resources it takes to experiment with it. Compare it against other experiments that are on the list.

This is how you use your longer-term goals to work backwards to figure out exactly what you need to do today to reach them.

How long do you plan your experiments for?

Brian Balfour, VP of Growth at Hubspot recommends 30 to 90 day experiment cycles:

“Anything smaller than 30 days you’re probably not giving yourself enough time to make a meaningful impact, anything larger than 90 days you’re probably biting off too big of a piece.”

As a rule of thumb, start with once a month. This should be enough time to implement an idea, test it out and see if you have a chance of making it work. The first time you try something it’s likely to fail, so any signs of success should be seen as validation to keep at it.

3. Execute your plan

This part of the plan is where you implement your specific tactics.

The first time you test a new idea in a channel, it’s unlikely that you’re going to achieve a big impact. It’s okay to run a campaign where the primary goal is to learn whether something works. Aim for small victories quickly to establish momentum.

4. Analyze: how to stand apart from the majority of marketers

The most important part of the process is analyzing the results of your campaigns against your hypothesis, pulling out learnings, and turning those into action items, or new experiments. The results of your previous experiments will guide the next cycle of marketing, based on your learnings.

This is the crucial part of the process that most marketers fail to execute and stick to.

At the end of any experiment you have to go back and ask yourself: “Was this experiment successful? If so why? If not, why not? What have we learnt and what can we do differently next time?”

Take these learnings, funnel them back into the plan as new ideas for the next cycle.

5. Optimize & formalize your methods

A well defined process comes from well-defined methods.

Whenever you run a marketing experiment, document your efforts. Outline your objective, hypothesis, timeframe, and how you’ll execute it. After the experiment is over, return to the document and include your results, your learnings, and what you’ll do next.

If you’re doing something that is likely to be repeated in the future, write out a playbook for it that can be referred to next time.

Store all details of your efforts in a shared Google Drive folder. This level of documentation is not something you typically think about when it comes to startups, but it’s critical to keep a record for reviewing your progress and making continuous improvements.

In the same vein, create a dashboard.

Whatever goals you’re focusing on, create a simple dashboard that helps you visualize the metrics you need to improve. This can be in a Google Analytics dashboard, or a tool like Geckoboard.

Dashboards helps you avoid floundering, and focus on what matters.

Timeframe is important. You need smaller timeframes to see if your actions are having direct impact, and longer timeframes to see trends.

For example, if your goal is to improve the number of signups, you might want to add: number of signups per day, week, month or over six months, and also top signup sources.

Segment put together a great guide on making your SaaS Dashboard using KissMetrics, and how to focus on the right metrics:

SaaS Dashboard

Bookmark it in your browser or have it as your home tab, and look at it every day.


Pace your customer acquisition plan with product dev

As a startup, the majority of your time should be spent on customer acquisition and product development – the things that will move you forward.

However, you want to be able to make sure that your customer acquisition plan is not so far ahead of your product development, or so far behind your product development, that it throws your entire business out of whack.

If you’re not careful it’s easy to spend more time working on one while the other one suffers.

For example, if your marketing gets too far ahead of your product you can start driving too many leads. But, because the product isn’t up to scratch they’ll all churn out and your efforts will be wasted.

Likewise, if you spend too much time on product development, you won’t have enough customers to bring in money to pay for the development resources, so you risk dying out from lack of revenue. Or you don’t have enough customers to give you feedback on it and you’ll end up building in a vacuum.


Conclusion

A customer acquisition plan will give you the best chance of reaching your goals. But the plan is just the beginning. Ability to analyze, execute, and continuously iterate on your plan will set apart the startups who grow from the ones who don’t.

  • BlogIn internal blog

    Excellent article, pure gold for new startup owners. Brings some sort of “order” to an overwhelming and confusing customer acquisition efforts.

    • https://ryangum.com/ Ryan Gum

      Thanks guys!

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  • Henley Wing

    Great article! I like the methodological approach to determining your ideal customer, goals, acquisition funnel, and reverse engineering your growth.

    Question: When do you think it doesn’t make sense to invest in content marketing for a startup? I’m asking because content marketing does take a very long time to pay dividends, and a startup might not be able to wait that long to see results. Is it something you feel should consist of a small % of your marketing efforts when you’re not profitable yet?

    2nd, what do you think of BuzzSumo for finding out what topics/stories resonates with your audience?

    I created it last year, and it’s a tool that shows you the most shared articles for a specific domain, or topic. was wondering if you could try it out to see if you’d find it useful?

    • http://customericare.com Aurelie Chazal

      Hi Henley,
      You created BuzzSumo? That’s awesome. I find it super useful to find out who shares popular article on subjects I want to write about. It’s usually the website everyone in the startup world links to when talking about identifying popular content / influencers in your niche.

      When focusing on content as a main marketing channel, BuzzSumo is super useful to not just shoot in the dark and write about what we think would work.

    • https://ryangum.com/ Ryan Gum

      Hey Henley, I think content marketing doesn’t make sense when you can spend your resources on something else that brings a better return. Of course, it’s a longer play so it’s hard to really find out how well you can execute on it quickly. But it’s definitely a channel everyone should attempt to explore for a few months.

      Big fan of Buzz Sumo, thanks for creating it. I use it almost daily for a whole range of tasks – checking on competitors, influencers, keywords, even as a search engine (it display searches in a way google cant). Thanks for creating it.

      • Henley Wing

        Awesome, glad you enjoy using BuzzSumo! Check your email for an early X’Mas surprise :)

      • Henley Wing

        Thanks for the compliment, Ryan. I sent you an email to your gmail email. Just a gift :)

    • http://lizasperling.com/ Liza Sperling

      @henleywing:disqus I just dove into Buzzsumo this past week, and I am really impressed! There are so many ways to use it – the challenge (as is the challenge with most marketing tools) is to make it actionable. Still working on that!

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  • Moheth Koppolu

    Great Article. With a lot of new startups coming up everyday, acquiring customers is not an easy task. A proper plan is never proper, lots of furstrations and little success and hitting the right note isnt that easy.

    • https://ryangum.com/ Ryan Gum

      Thanks Moheth, glad you found it interesting.

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  • http://neerajchoudhary10.blogspot.in/2014/12/inbound-marketing-let-people-find-you.html neeraj dx

    Great Article!! Since their are a number of startups coming up everyday!!! So, very Useful for them and at the same time ‘result driven’ indeed very interesting, Thanks Ryan

  • http://facebook.com/andyalterini Andy Alterini

    Just Brilliant! Thank you so much for sharing this clear concepts!

  • jaysean

    great post!

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  • http://ascent.social/ Kurt Bullock

    Great article – thanks for putting this together!

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  • Kassu Laine

    Brilliant!

  • Isaac

    Great stuff!

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  • https://tractionboard.io/ Bart

    Hey Ryan, awesome guide.

    I saw you mentioned the Traction book (I’m a big fan of it). In the book, they talked about focus in 3 channels at the same time (with the bullseye framework), but your recommendation is up to 2, isn’t it ?

    I think it depends of your resources. We have a rule in our startup, “Don’t do anything that you are not gonna get 100% of what you may get”. So first we research how much we could get from any strategy, what we will have to do to get it and if it worth the effort and resources, we test it. If you have this cover, I think you could run as many test as you can.

    • https://ryangum.com/ Ryan Gum

      Hey Bar,

      Definitely – it depends on your resources, but always lean towards more focus on fewer channels. It takes a lot to make a channel really work properly. That sounds like a great process to go through!

  • Nikhil Samuel

    Brilliant stuff Ryan!

  • http://www.updateland.com/ Jyoti Chauhan

    Hi Ryan,

    Awesome article with detailed info. I am sure this post will prove helpful for lots of people. Keep sharing such interesting and valued information. There are some people who start business without proper planning and result is failure.

    • https://attach.io Ryan Gum

      Thanks Jyoti, glad you found it valuable!

  • cmorantz

    Ryan, I consider myself a seasoned entrepreneur and a go to market expert and I got a huge amount of value from this. I’m a big believer that we all need to be reminded of things, even if some of them are basic. You did a fantastic job of laying this out, thank you. @morerants

    • https://attach.io Ryan Gum

      Hey Craig, glad to hear. That’s exactly what I put it together. I even come back to this sometimes to remind myself and make sure I’m staying focused 😉

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  • Mandy Schenkenberger

    Thank you so much for sharing all of these details and tools, sometimes I get overwhelmed because of everything I need to do but don’t know where to start!

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  • Himesh Patel

    Awesome and very much helpful article.
    great work!

  • jof89

    This has been really helpful. It is a wake up call for a first-time entrepreneur like me. Thanks a ton.

  • Dave @ Posto.io

    Ryan – one of more compelling and brilliant (copying others comments) articles on using metrics, data points and reverse engineering to find those first mission critical customers. At Posto, we are entering this phase now and you are right – there are lots of strategies. I am going to take some of these thoughts (especially the reverse engineering aspect) and really put pen to paper. Right now, 25 paying customer is our goal. Thanks for the great post and now that we are on your mailing list, we are cetainly looking forward to more great content and participating in the discussion going forward.

    Thanks again.
    Dave @ Posto
    CEO

  • Veronica Antonova

    Ok but what about product / engineering driven growth hacks? Rather than marketing?

  • santosh raj

    Well, this is one of the finest articles that include theory and a bit of practical knowledge which definitely gets you some customers

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  • Wicked Schwarz

    Hey everybody,
    I want to get into customer acquisition for online businesses as an independent consultant.
    Do you think that there is a market for this?
    And if there is, what would their ideal customer look like?
    Any answers are appreciated.

    Thank you in advance.
    Fabian

  • Sunil P Johny

    Hi Great article, We are a startup in SaaS platform offering employee tracking software to SMEs. looking out for exploring effective marketing channels. This article given me a framework to think the possibilities, Thanks a lot writer.

    http://www.trackbizz.com is our product website, If anyone suggestions to make a better marketing plan please provide us here

  • http://www.leadgibbon.com Shamaila Zahid

    Thank you for such an in-depth article. As a marketer, it can get so overwhelming trying to figure out customer acquisitions methods. So, I found a lot of useful tips that I think will help me grow our customer base at http://www.leadgibbon.com

  • Larassati Rizky Septiani

    I cant subscribe my email. What happens in here? 404 error something, well.. Its a very good article and thank you for sharing. My email is larassatirizky01@gmail.com
    And i want to Be subscriber.. Thanks a lot

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