Letter 018 - User Acquisition: Breaking Through In A Crowded Market
Counterexamples, Nature, and my three favorite tactics -- Counterpositioning, Heart & Heart-aware messaging, and constant prioritization of (marketing) spend
Hey new subscribers! As a reminder, Exonomist is written in raw form, with typos and occasionally odd topical flow. I’m going to likely start shifting more to market / business strategy in the next few posts, a bit away from the more interpersonal topics I’ve been writing about for the past several weeks.
Tl;dr — to break through in crowded markets, consider how your brand is positioned against other established players as a means to tell your story more passionately… Which should ideally be a part of your push to leave an impression on both the emotional and logical sides of your customers… Getting to these customers can sometimes be an expensive, infuriating journey, and you should establish discipline in reviewing marketing investment efficacy (ROMI) on a regular basis, allowing some longer-term bets to mature and grow, while also using data on interim performance to inform where to make adjustments.
How can my product can breakthrough amidst of a wave of competitors??
This has been a prime pursuit since the dawn of commerce, where multiple providers went to market with competing products, and yet how people think about breaking through oftentimes leaves much to be desired. Typically, teams grasp a tactic superficially and apply it sub-optimally. Which is why most markets are comprised of companies that have stagnated and/or failed to execute grandiose sounding growth programs. Here’s a crappy example of a sub-component of a growth strategy I once came across on a marketing strategy project (we were reviewing the old marketing strategy, which had failed). Exact wording is escaping me, but it was extremely close to:
We’re going to pursued a content-led growth, by publishing more articles on LinkedIn. It’s a proven tactic that other brands have utilized, and we have an opportunity to differentiate through our messaging.
This is superficially grasping a tactic, but it lacked any sense of specificity or…rigor. Rigor = going deeper by asking questions like…
Why have other attempts at this strategy failed? How can we avoid making the same mistakes?
How will we know this strategy is working? When do we decide to abandon the approach?
Who is the absolute best at doing this in our segment? Do they write a blog? Have they spoken at conferences? Are there hallmarks of their approach that we should consider?
If we were 100% reliant on this one approach, what would we do to make damned sure it produced results?
And ideally you land with something closer to this than what I wrote above…: “We are going to pursue a content-led growth (user acquisition) strategy that builds on a hyper specific appreciation of a persona group, and we are hiring a proven expert in this exact field on a 3-month contract, during which time we expect to see X content conversion rates. To support this strategy, we will invest Z dollars into marketing automation, and we will also have every executive at the company re-post/share said articles at least 1x per month, AND we will host three webinars fully centered around these topics that will be moderated by three different key opinion leaders in the space.”
It’s specific
It’s multi-damned-pronged
It’s timebound (3 months)
It is missing a key result ;-)
But at least it’s specific about specific tactics to accelerate the experiment
This matters because winning in your market is not a given. At any given moment, someone (or someones) are out there conspiring to replace your company (coming back to this in a bit…). You have to be specific in your strategies and measurement mechanisms (aka, “Dude is this working??”) to make sure your product can thrive.
As I type these words, I’m looking out at a collection of branches that just keep growing, and growing, and growing. They, much like companies, are trying to break through. They’re striving to capture as much of the sunlight as they can, they’re trying to dig roots that can last and capture water reliably, so that they can keep growing and capturing more sunlight, and so on and so forth. It’s pretty incredible how this battle for resources is happening all around us, and yet I rarely view this ecosystem of plants as a brutal competitive landscape. It’s life, trying to survive. It’s beautiful, calming, and when you look deeper there’s more to it than just branches growing.
And that’s akin to a company, where many people have their livelihoods and reputations staked on business outcomes. That latest advertising campaign can seem so innocuous when you take it at face value, but it is a war for your attention, and a war for your share of wallet every time your eyes cross whatever brand asset that company paid for you to see.
Alright, enough gazing at nature. How can a company break through in a crowded market to acquire users/customers? Here are the things that immediately come top of mind.
Counter-positioning
Purpose, Values, and Storytelling
Kick-ass customer experience (CX)
Head & Heart
Bold Plays
Constant prioritization of marketing spend
Constant capture of marketing data
Long-term earned media bets & KOLs (key opinion leaders)
Variable, paid-media bets
Minimizing gap between marketing, sales, and CX
Sales enablement
I’m not going to write about all of these today. Instead, I’m going to pick out three of the areas that I have been most drawn to lately: (1) Counter-positioning, (2) Head & Heart, and (3) constant prioritization of marketing investments/spend. Will write about the other ones at some other point (oh you thought I was only going to write a few articles and stop? I’m just getting started :-)).
1. Counter-positioning
Man, I have been obsessed with this concept lately, not because it’s particularly groundbreaking, but because the term is so surgically awesome. David Rosenthal (one of my business knowledge heroes and angel investor who hosts a badass podcast I’ve referenced here several times, Acquired) has talked about this in the context of new venture capital firms emerging to challenge established incumbents, but I also think you can see countless examples of this happening in the market. Contrast is the mother of clarity — you see something oftentimes by seeing what it is NOT first…
Apple (back in the day) positioning itself as the cool, design, luxury product against a staid (read: unadventurous) product line
Robinhood positioning itself as the refreshing, mobile-first trading platform as opposed to the old, hard-to-access platforms of the legacy consumer trading platforms
Netflix deciding to release entire seasons of episodes at once, as opposed to the very entrenched strategy of week-by-week releases.
Amazon positioning itself against legacy retailers by offering something few others could reliably: fast shipping
Fast Fashion companies pumping out new designs constantly, as opposed to always waiting for a new “season” to release new products
Airbnb offering an experience fundamentally different than whatever most hotels were offering at the time
Insert any example of a brand that did the complete opposite of whatever the established incumbent was
In business, this can be used to drive what another great book called Founders Mentality talks about as a “sense of insurgency” — the sense that you are doing something different from the established order, and that sense of being a part of something drives connection, and connection is ultimately a form of loyalty. It’s a phenomenal way to drive a wedge into a market, but to do it your product experience has to back up what your marketing is telling the market. Marketing efficacy tends to ware off over time, but a joy-producing customer experience and value over time tend to pay dividends.
2. Head & Heart
An old colleague of mine, Larry M., was the first person I heard say this. He was leading an offering around human experience in a digital health context, and we were pitching a large biotech company on a customer experience strategy project (one of my first ever real pitches). He powerfully spoke about needing to connect to the Head of a customer (their logical brain) and the Heart (that intangible, harder-to-understand part of us that is more driven by emotional connection).
While some products are truly exceptional on their own to not require much storytelling, there’s a reason you constantly see brands trying to build an emotional connection with you. It’s because emotions drive so much of our decision making, and if you only appeal to logic, you’re missing out on a big part of the human decision making cycle. Not accounting for emotion in customer acquisition is like fighting with one arm tied behind your back.
Whenever I have pitched anything in my life (…quite a bit by this point in time! Have lost count of the number of sales pursuits or complex sales I’ve led or been a part of), I’ve always tried to appeal to the value someone gets on an emotional / “human” level and also to the value they would see on more purely financial + time-savings terms. If it was just the latter, the appeal would feel…slightly empty? And that, to me, felt like a not-very-win-creating approach.
And frankly, the organization that is taking a product to market could probably benefit from the storytelling about the impact they are making every day.
3. Constant Prioritization of (marketing) Spend
I’ve talked about the importance of constant prioritization of spend before, most recently in letter 14, which was about the lessons I learned growing up in an entrepreneurial environment. This particular point, however, is ultra focused on marketing spend, since it can play such an outsized role in enabling a product to break through.
For companies (especially new ones), creating “brand awareness” is one of the most important things you do, and there are countless ways to spend money. I’ve oftentimes observed earlier-stage companies absolutely obsessing over which marketing channels to explore (good!), and I oftentimes see startups under-appreciate the radical clarity that can come from analyzing ROMI (return on marketing investment). It’s so easy to want to throw money at this sponsorship, and that advertisement, and this webinar, and that conference… And just like everything else, it pays (off) to be thoughtful about where you are spending your resources. It’s easy to write the check and to forget the post-mortem about what value that check really delivered to your company…
The best companies I see have a disciplined marketing investment strategy, where they are regularly (usually monthly, at least quarterly) reviewing every area of marketing spend, tracking what results they’ve achieved via this spend, and making fast decisions around which areas to increase, decrease, eliminate, or explore.
It is in these reviews, that you’ll start to uncover the signals that tell you which marketing bets might hold outsized potential. In other words your portfolio of marketing investments should be actively (not passively) managed.
Because few things (at work) suck more than spending months defining a Head-and-Heart-impacting brand messaging architecture, only for it to fall completely flat while you deploy said brand assets across channels that aren’t working.
Counterpoint: some things take a longer time to pay off… It’s OK to make marketing bets that may not pay off immediately, but you should just be extra thoughtful when you make them. The excuse of, “well, this takes time” is reasonable, but it can easily become a crutch that veils mediocre thinking.