In this episode of the GrowthTLDR, we talk to Holly Chen, a growth advisor to numerous companies, and former global head of growth marketing at Slack.
We go into what makes up a winning customer acquisition strategy. We talk about forecasting models, and how you know what hires to make. We talk about the importance of multi-attribution models and how to split your paid advertising budget across both brand and direct response.
Time Stamped Notes
[3:10] - When creating a forecast model for customer acquisition, you should do a top-down and bottoms-up plan.
Top-down: Based on historical trends, how will you grow across each acquisition channel over the next 12 months.
Bottoms-down: Based on the monthly customer revenue number, work back up your funnel to establish how many monthly signups you would need to generate, and ultimately, how much traffic this would be.
Once you have both of those, figure out what gaps you have and plan how you reconcile them.
[5:45] - You'll often need to re-forecast at high growth companies as goals can be changing every six months.
[6:00]- When planning to invest headcount for customer acquisition, you need first to understand what marketing channels will be pivotal to your growth. You then decide if you need a full-time headcount, or if you can hire a freelancer and consultant to get started.
[7:30] - Holly will typically prove the viability of a new marketing channel with her current team before hiring full-time people.
[10:30] - There are not many marketing channels to grow from, but there are still many different tactics to help you win in those channels. It also helps to have a multi-channel attribution model.
[12:30]- Holly gives examples of how she runs experiments to look at the actual effectiveness of ads.
[18:10] - When driving growth through paid advertising, you need both direct response and brand advertising. The lines between these ad types are also blurring. You need to have an integrated approach to brand and direct response ads, vs. thinking of them as separate things.
[21:05] - Holly gives us her playbook for how she would split budget across brand advertising and direct response. She would start from bottoms up, maximizing spend on the best converting ads, and then working up the funnel.
[25:25] - Some companies might do brand advertising earlier than others, such as ridesharing companies, who take an approach of saturating single cities with advertising. We get into when it does and doesn't make sense to prioritize brand advertising.
[29:05] - We talk about the tactics self-serve businesses need to adopt to turn more self-serve users into enterprise customers. Holly recommends having one team responsible for both your self-serve business and enterprise customers.
[32:30] - The best way to leverage your self-serve userbase is to have customer success increase usage within that base, and pass on any potential great fit enterprise customers to sales.