A STARTUP GUIDE TO GETTING CUSTOMERS

Visual list of 19 traction channels mentioned in this book
Image by Reading Graphics

Chapter 1 Traction Channels

Traction is a sign that your company is taking off. Getting traction means moving your growth curve up and to the right as best you can.

This Chapter introduces readers to 19 marketing and distribution channels through which your startup can get traction: real users and customers.

Chapter 2 — Bullseye Framework

Bullseye Framework is a five-step process that allows companies to choose one of the nineteen tractions given in this book.

Step 1: Brainstorm

Create a spreadsheet and come up with at least one idea for every traction channel. The trick is not to skip even a single channel while brainstorming. You can add specific questions for every channel and answer them. Such as :

  • How probable does it seem that this idea could work (1–5)?
  • What is the expected cost to acquire a customer through this?
  • How many customers can you expect to receive at that cost?
  • What is the timeframe needed to run tests?

Step 2: Rank

Organize every channel in one of the following column — A. Inner Circle (Most promising Channels), B. Potential (Could work), C. Long Shot (Remaining channels).

Step 3: Prioritize

Choose the top 3 channels from your Inner Circle for three or less than three channels is the best option.

Step 4: Test

It’s time to start cheap testing these three channels. The tests you create should be able to answer the following questions — 

  • Roughly how much will it cost to acquire customers through this channel
  • How many customers do you think are available through this channel?
  • Are the customers that you are getting through this channel the
    ones that you want right now?

Step 5: Focusing

After your tests, has any channel produced promising results? It’s time to focus on this channel and uncover every tactic that will work for you.

Chapter 3 — Traction Thinking

50/50 Rule

All failed startups have products; what they don’t have is customers. The strategy is focusing 50/50 on your product and traction development.

This parallel work will keep you on the winning side. Focusing half your energy on traction development will result in experimenting with various channels even before your product enters the market.

Moving the Needle

Finding the right traction channel is all about what gets your needle moving in the present. However, a channel won’t be successful in driving people to buy your product at all stages. Switch to a new channel when the growth curve of the current channel flattens.

The trick is to keep testing for channels that give results. Channels usually vary over these three stages-

  • Making something people want
  • Marketing something people want
  • Scaling your business

Chapter 4 — Traction Testing

Over time, all marketing channels become crowded, ineffective, and saturated. To combat this reality, consistently conduct small experiments to answer questions like:

  • How much does it cost to acquire customers through this channel strategy?
  • How many customers are available through this channel strategy?
  • How well do these customers convert?
  • How long does it take to acquire a customer?

These first tests should be cheap (costing a few hundred dollars). The faster you run high-quality experiments, the faster you’ll find scalable, effective growth tactics.

Optimize and Quantify

Found a traction channel that is working? Optimize the use of that channel through A/B testing to measure its effectiveness.

Then, quantify your results in a spreadsheet to rank and prioritize. Include universal columns such as ‘cost to acquire a customer’ and ‘lifetime value of a customer’ for each traction channel to make comparisons across channels easily.

Chapter 5 — Critical Path

Define your critical path and Traction Goal, which will depend on your business. 1,000 paying customers? 100 new daily users? 10% of your market?

Defining Milestones — The path to reaching your traction goal with the fewest number of steps is your Critical Path. Everything you do should be assessed against your Critical Path.

Then, enumerate the intermediate steps (milestones) and order them. The order of your necessary milestones is your Critical Path.

Put them on a calendar or in a spreadsheet and work on the first steps. Reassess your Critical Path using the market knowledge learned after achieving that milestone because the original plan is often wrong.

Aim High. Every activity (need not be traction related) is either on the path or not. If it is not on the path, don’t do it!

Good mentors help you stay on your Critical Path.

Remove Bias by asking yourselfwhich traction channels are you currently biased for or against? Work on overcoming this traction channel bias through the Bullseye framework in Chapter 1.


Chapter 6 — Viral Marketing

Viral Marketing is about creating viral loops where a user exposed to the product brings at least one other user, and this user brings another, and the chain continues.

  • Word of mouth
  • Inherent — get value from a product by inviting other users, e.g., Skype
  • Collaborative — product becomes more valuable as you invite others, e.g., Google Docs
  • Communicative — company’s branding on free customers, removed for paying users, e.g., Mailchimp
  • Incentives — when you’re referring the product to friends, e.g., Dropbox & AirBnB
  • Embedded — code snippet to embed the product on any website, e.g., YouTube
  • Social — message easy to broadcast to social connections, e.g., Zynga

Viral Cycle Time — Shorter cycle time will increase the rate at which your product goes viral. Companies can incentivize or create urgency around inviting friends, family, or coworkers, along with creating a smooth and easy signup/download funnel.

Run as many A/B tests as possible while focusing on one area for weeks until you achieve set goals.

Viral Tactics

  • Distribution Mechanisms — Email and Social Media Platforms. Experiment with new ones like Instagram, Snapchat, and Pinterest.
  • Effective Invitations — Design short, concise, and engaging invitations for nonusers. Allowing test-drives without signing up can build trust.
  • Effective Conversion Pages — Use the same messaging on social invitations and conversation page.
  • Things to Test — Optimize things like the location of CTA’s, headlines, site copy, testimonials, ease of signup, button vs. text links, etc.

Chapter 7 — Public Relations

Well crafted stories on the right channels can make you market leader overnight.

How Media Works

Stories and content is getting filtered up rather than down. You don’t have to pitch directly to the New York Times or CNN anymore. Rather pitch smaller sites whose content is then picked by larger media houses. If you tell your story right, you will be creating enough buzz around your brand to catch the attention of big fishes.

How to pitch for PR

Turn smaller announcements into one big one and generate noteworthy coverage.

Pitch Template

Get your story picked up by curating angles that drive emotion and activity. Keep your pitch concise and clear. Editors get numerous pitches in a day; you should be memorable with the right details.

Tactics

  • Starting Out — Start small. Use services like Help a Reporter Out (HARO) and twitter to get coverage and credibility.
  • Amplifying — Draw attention by submitting stories to community sites (Reddit, Digg, Hackerrank, etc.), social shares, and getting feedback from influencers.
  • Fundraising — PR plays a role in social proof for investors who are interested in your business/product.
  • PR Firms — Hiring a PR firm can help you in bringing up the right angle for the story and breaking into traditionally harder to break markets.

Chapter 8 — Unconventional PR

Sometimes companies focus on stunts and not so traditional methods to gain publicity.

Publicity Stunt

  • Half.com renamed (Halfway, Oregon) to Half.com and launched it on the Today show with the mayor of Halfway, Oregon.
  • Richard Branson made an outlandish press conference by dressing like a woman and driving a tank through the streets to get the media talking about whatever Virgin was launching.
  • DuckDuckGo (Google Search competitor) bought a billboard in Google’s backyard highlighting its privacy focus.
  • Blendtec created a series of videos called “Will It Blend?” where they blended almost everything from a rake, golf balls, and even an iPhone.
  • Grasshopper sent chocolate-covered grasshoppers to 5,000 influential people when they were rebranding.
  • WePay (a PayPal competitor) placed a 600-pound block of ice at PayPal’s conference entrance, referring to the frozen Paypal accounts of many users.

Customer Appreciation

If you keep your customers happy, they are likely to spread the news about your products. Anything from handwritten notes, contests, and great customer support will go in your favor.


Chapter 9 — SEM

Search engine marketing (SEM) refers to placing paid advertisements on search engines (also known as pay-per-click, or just PPC) for keyword searches. SEM works well for companies looking to sell directly to their target customer.

Terminology

  • CTR — Click-Through Rate is the percentage of ad appearances translating to clicks.
  • CPC — Cost per Click is the amount paid for each click on the advertisement.
  • CPA — Cost per Acquisition is the price of acquiring a customer after a click. This is a measure of actual purchase.
  • CPA = CPC/conversion percentage

Basic Strategy

  • The first step is to identify the keywords that can be most effective in attracting customers using tools like Google Keyword Planner.
  • This is followed by testing these keywords on a platform like Google AdWords.
  • Then create eye-catching ads, which also include a call to action.
  • Different keywords have different rates, and an analytics tool can be used if the cost and conversion rates are in sync.
  • A small-scale test at the beginning can let you know if SEM is the right channel for you.
  • The channel can be further optimized on different metrics to improve the ad quality scores.

Tactics

  • After establishing a profitable campaign, consider expanding to the Google content network
  • Use advanced tools like retargeting, conversion rate optimization, negative keywords, and programming scripts
  • Aggregate long-tail keywords, which are cheaper as they have low search volumes
  • Use negative keywords to prevent ads from showing for keywords you aren’t targeting.

Chapter 10 — Social and Display Ads

Social and Display ads have become a massive industry, as more and more people are spending time online.

Display Advertising

These are run by ad networks where companies can run buy ad space on various blogs at once.

1. Large Ad Networks — . Companies like Google’s Display Network, Advertising.com, TribalFusion, ValueClick, and Adblade have access to websites that have millions of unique monthly visitors. Run small tests on specific demographics, markets, and product positioning to find what works and what doesn’t.

2. Niche Ad Networks — These networks focus on a specific demographic group.

3. Direct Ads — Get in touch with blog/website owners and pay a fixed price to display your banners.

Social Ads

Social ads are for generating interest from new potential customers. They are awareness-oriented, not conversion-oriented. They are creating engaging social experiences and compelling content to succeed.

LinkedIn, Twitter, Facebook, StumbleUpon, Foursquare, Tumblr, Reddit, YouTube, BuzzFeed, Scribd, SlideShare, Pinterest, etc. are some of the major social sites.

This is an accessible channel to create tests and analyze results. If you understand your audience, you can experiment with the message in your ads and their location to see if you can drive the needle.


Chapter 11 — Offline Ads

Offline ads include TV spots, radio commercials, billboards, infomercials, newspaper and magazine ads, as well as flyers and other local advertisements. Such ads can’t be tracked. However, use them for creating brand awareness and starting a conversation about an upcoming event/product launch.

Print Advertising

Magazines, Newspapers, Direct Mail, and Local Print Ads.

  • Magazines range from commercial publications with millions of subscribers and small publications with hundreds of readers.
  • Newspapers are for demographic aged above 30 for events, awareness campaigns, and public announcements.
  • Direct Mails like letters and catalogs should have compelling offers, clear Call to Action, and a self-addressed envelope for increasing the number of responses.
  • Local ads can help you get traction in Phase 1 if your target audience is in the local area. Hanging flyers where potential customers visit is a successful unorthodox strategy.

Billboard Advertising

Billboards do not provide instant action, but great to build awareness around an event or a product.

Websites of top companies like Lamar and OBS Outdoor provide information about local representatives and billboards location and their audience. Apart from location, rates also depend on the size of the ad, type of billboard, and impressions.

Transit Advertising

Transit ads are placed on park benches, bus shelters, taxis, buses, and bus stands. Creating a great ad is a must.

Radio Advertising

You can run both traditional radio ads or satellite radio ads depending on how much ad time you require and your budget.

TV Advertising

If your consumers watch TV, this is an excellent channel. However, the costs for creating a quality TV ad can run tens of thousands. There are ways to reduce costs by creating animation over live actors. Buying airtime is another expensive hurdle. If you are considering TV Advertising, it’s better to hire an agency to negotiate and get you a deal.

Infomercials

Infomercials are long-form of TV ads great of showcasing large appliances. 
The following product categories make great infomercials: – Workout equipment or programs, Body care products, Household products (kitchen, cleaning), Vacuum cleaners, Health products (e.g., juicers), and Work from home businesses.


Chapter 12 — Search Engine Optimisation

SEO is the process of improving your ranking on Search Engines to drive more traffic on your website. SEO is a widespread practice that works for almost any product/business. It’s about developing a content strategy to attract more relevant visitors to your blog/website. Your focus should be on ranking as high as possible on the first page for your niche.

Two SEO Strategies

  1. Fat Head Strategy — involves trying to rank for search terms that directly describe your company.
  2. Long Tail Strategy — involves trying to rank for more
    specific terms with lower search volumes.

Link Building

SEO is about two things: quality content and links. The more links you can get from credible sources, the better you will rank.

  • Product — with some products, you can produce web pages as part of your product that people naturally want to share. A great example is LinkedIn profile pages.
  • PR — when online publications cover you, reporters
    will link to your website (see chapter 7).
  • Content marketing — creating robust and relevant content that
    people want to read, and thus share (see chapter 13).
  • Widgets — giving site owners useful things to add to their sites,
    which also contain links back to yours.

Content should be link-worthy — Create remarkable content that adds value. Do this by adding relevant images, infographics, slideshows, case studies, and research findings. You can always look at your competitor’s websites to find places to target for links.

What not to do? — Don’t buy links. Also called the Black hat tactic, which can harm your website. It is hard to sustain long term through buying links because search engines crack down on such sites, and you’ll lose traffic due to penalization.


Chapter 13 — Content Marketing

This section has stories from two companies that started blogging at different phases. Unbounce, a Landing page tool, started blogging a year before product launch, and OkCupid, an online dating site focused on content marketing channel after five years of being in business.

Unbounce used social media and organic results to drive readers to their website. At the same, they pinged twitter influencers for feedback and gave away free infographics and ebooks in exchange for emails. After a year when Unbounce launched their product, their email list was 5000 strong.

OkCupid saw an increase in organic traffic once they started posting blogs on their website rather than PR firms. They wrote on controversial topics and drew on data they had from studying their customers’ usage patterns.

Tactics:

Overcoming Writers Block — Write about problems faced by your target audience. 
Engaging Content — Integrate infographics, mini-courses, ebooks in your typical blog posts. These have higher chances of getting picked up by other publications and blogs. 
Online Forums — Get involved in conversations on niche forums to drive more traffic. 
Guest Posting — This works great when you don’t have an audience to work on your own.


Chapter 14 — Email Marketing

This traction channel that works best when personalized.

Email can be used at all stages of the customer lifecycle: to acquire customers, build familiarity with prospects, move customers through your funnel, and retain the customers you already have.

Email Marketing for Finding Customers

Don’t buy email lists and spam people. Rather build an email list from traction channels such as SEO (Chap 12) or Content Marketing (Chap 13).

Email Marketing for Engaging Customers

The next step is ensuring you have an email list of active users. Improving activation rates can have a significant effect on your business.

Lifecycle emails are one of the strategies; the email cycle first begins when a customer signs up for your product and ends when they become active while creating an ideal experience for them. Create a message that automatically emails customers when they drop off and do this at every step where users could quit.

Email Marketing for Retaining Customers

It’s time to surprise your customers while also keeping your product at the forefront of their minds. Depending on your product, send your users weekly or monthly useful emails to make them feel good on an emotional level.

Email Marketing for Revenue

Turning emails into money will with timing and experimentation. One of the ways to drive revenue through email marketing is doing lifecycle campaigns aimed at upselling customers. Here you ask for visitors’ email rather than a sale and then use email to sell a product over a month or so.

Email retargeting is when you send a customized email with a special offer when a user abandons a shopping cart for items they left.

Email Marketing for Referrals

Generating customer referrals over email marketing can be a major growth for your product. Brands like Dropbox, Hotmail, Facebook, LinkedIn, Asana, Groupon grew by cleverly using email marketing.

Tactics

  • Use email marketing providers like MailChimp or Constant Contact to ensure deliverability.
  • A/B test every aspect: subjects, formats, images, timing, and more.
  • Send/Schedule emails either between 9 a.m.–12 p.m. in your customer’s time zone or the time they registered for the email list.
  • Don’t use a no-reply email address.
  • Great email copy to have wildly profitable email campaigns.

Chapter 15 — Engineering as Marketing

What’s an ideal problem faced by your potential customer? Create a free solution around it that will help customers to grow their business.

Effective Engineering as Marketing

Using engineering skills for building tools like widgets, educational micro-sites, and calculators will get your company in front of prospective customers. Companies like Hubspot, Moz, and RJ Metrics have utilized this channel for driving leads in their funnel and rapid growth. Once customers use your tools, begin engaging them through other traction channels.

Converting Potential Customers

The idea should be on using these inbound marketing tools as assets that pay you indefinitely. Such tools have the potential to become a constant source of traction.

Tactics

  • Annual Promotions
  • Micro-Sites
  • Widgets

Chapter 16 — Targeting Blogs

Target niche blogs your customers read to get the first wave of customers in Phase I.

Finding Blogs

Use platforms like YouTube, Twitter, Delicious, and Search engine and Social Mentions to find influencers in your niche.

Link Sharing Communities

Target large communities on the web, encourage and even reward link sharing.


Chapter 17 — Business Development

Business Development or BD is primarily focused on exchanging value through partnerships rather than exchanging products for dollars.

Types of Partnerships

1. Standard Partnerships — Two companies work together on one or both of their products by leveraging the unique capabilities of another.

2. Joint Ventures — Two companies work together to create a new product. This takes investment, a long period, and equity exchanges.

3. Licensing — This is when an upstart wants to use another company’s strong brand in their product.

4. Distribution Deals — One party provides a product or service to the other in return for access to potential customers.

5. Supply Partners — These types of partnerships help you secure key inputs that are essential for certain products.

Tactics

Not all partnerships end up working. Build multiple pipelines of deals.

  • Strategic Business Development is essential for BD to succeed. Identify the right objectives that will maximize the chances of your success.
  • Picking the Right Partners goes both ways. Work on understanding why a potential partner might want to work with you.
  • Create an exhaustive list of all your possible partners.
  • Send it to your investors and friends for warm introductions.
  • Approach potential customers with a value-focused proposition that outlines why they should work with you.
  • Make sure to find out who is in charge of the metric you’ve targeted and contact them directly.
  • Keep negotiation and term sheet as simple as possible.

Chapter 18 — Sales

Sales are the process of generating leads, qualifying them, and converting them into paying customers.

SPIN Selling

Neil Rackham’s four-part question framework when talking to prospects outlines in his SPIN Selling:

1 Situation Questions — To learn about a prospect’s buying situation. Only ask two or three of such questions
2 Problem questions — To clarify the buyer’s pain points. Such as Are they happy with their current solution? What problems do you face with it? Use them sparingly
3 Implication Questions — To make prospects aware of the implications that stem from the problems they are facing. Does this problem hurt your productivity? How many people does this issue impact, and in what ways? 
4 Need Payoff Questions — Focus attention on your solutions and get them to think about benefits. How do you feel
this solution would help you? What type of impact would this have on you if we were to implement this within the next few months? Whose life would improve if this problem was solved, and how?

Cold Calling

You will get your first customers through cold Calling. Set weekly/monthly targets for cold Calling to get through the process and push yourself through rejections.

Todd Vollmer’s PNAME:

Process — How does the company buy solutions like yours?
Need — How badly does this company need a solution like the one you’re offering?
Authority — What individuals have the authority to make the purchase happen?
Money — Do they have the funds to buy what you’re selling? How much does not solving the problem cost them?
Estimated Timing — What are the budget and decision timelines for a purchase?

Designing Sales Funnel

1 Generating Leads — Drive leads on top of the funnel by using other traction channels to generate awareness about your product. Cold Calling is less effective in Phase 1.

2 Qualifying Leads — Determine how ready a prospect is in buying and how much additional resources you should invest. Marketing teams are in charge of generating leads and arming sales reps with all the required tools to win sales campaigns.

3 Closing Leads — Create a purchase timeline to convert prospects to paying customers. Getting a Yes/No response will allow you to focus time on leads likely to close in the recent future.

Sales funnel Strategy — Remember to design sales cycle from the customer’s standpoint rather than your own, says David Skok, partner at Matrix Ventures. Minimize complexity and blockages, points where prospects drop off.


Chapter 19 — Affiliate Programs

This is an arrangement where you pay people or companies for performing certain actions.

Common Affiliate Programs

1 Retail — Platforms like Amazon, Target, and Wal-Mart have the biggest programs pay affiliates a percentage of each sale they make.

2. Information products — Digital products like books, software, music, and (increasingly) education are sold through affiliates.

3. Lead Generation — Depending on the industry, a lead may include a working email address, home address, or phone number. It may also include more qualifying information like a credit score.

Affiliate Program Strategy

1 Using affiliate networks — easier to recruit affiliate but requires an up-front cost
2 Creating Your Affiliate Program — recruit partners from the customer base or people who have access to a group of customers. One Benefit is you don’t have to pay affiliates.

Tactics

Contact content creators, including bloggers, publishers, social media influencers, and email list curators. You can reach a new set of audiences without spending money on leads that don’t convert.


Chapter 20 — Existing Platform

For this traction, you leverage the potential of websites, apps, or networks that have a massive number of users, sometimes in hundreds of millions. The tactic is to find out where your users hang out online. Platforms like eBay, Craigslist, Tumblr, GitHub, Amazon, and Behance have all helped various startups in building traction.

App Stores

Apple and Andriod App stores, and Mozilla, and Chrome browser extension. App stores group apps based on category, country, editors choice, and even popularity. The goal is to get good rankings continuously, along with getting featured.

  • Tactic — Focus on new platforms for untapped potential or unique aspects of major platforms because you have less competition there.

Story of a paid iOS game developed by Matt Rix called Trainyard demonstrates impact app stores can have. When this app wasn’t picking pace, Matt decided to launch a free version called Trainyard express. An editor from a popular blog wrote a piece on it immediately. Trainyard became #1 app with 22k downloads on the same day and then hit top spot in the UK with 450k downloads. And right after seven days of launching Trainyard express, Apple decided to feature the app.

This story shows how various tractions like PR and targeted blogs work well together.

Social Platforms

Rapidly growing, newer social platforms can help to acquire a large number of customers. One of the methods is to fill gaps in one new platform by providing your service. This pattern can be seen when YouTube offered video sharing for MySpace in the mid-2000s, Bit.ly fulfilled the need of sharing shortened links on Twitter, and Imgur’s image hosting solution for Reddit.

Add-ons and Extensions

Add-ons and extensions allow web users to use your product without returning to your website. They can be downloaded for free to use on Chrome and Firefox.


Chapter 21 — Trade Shows

Trade shows are a chance for companies to build interest (and demand) during the pre-product phase and to acquire clients and partnerships as you get more established.

Picking Trade Shows

Decide which shows to attend by either visiting as a guest the year before or get the opinion of people who have attended the previous year.

Preparing for Trade Shows

Nearly everyone from your industry will be at the trade shows, from existing and potential customers/partners to your competition. You should be at your and ready.

  • Editors/Bloggers — An overlooked key for PR. Magazine editors and bloggers are regular visitors as they are looking for stories to write about. Build relationships and leave a great impression to get a chance of getting published online.
  • Set up meetings — Find industry experts and key attendees and schedule meetings with them before the event. Yes, send them a well-researched email explaining your product and ask to meet them at the show.
  • Schedule a dinner — Mark Suster, a partner at Upfront Ventures, suggests hosting dinners and inviting people you want to know intimately. He also suggests asking a few customers and potential customers.
  • Engaging customers — Do something unique with your booths that will pique people’s interest and then follow up with more information about your product. Include specific and robust Call To Actions.

Chapter 22 — Offline Events

In phase I, offline events allow you to engage directly with potential customers about their problems.

Conference

These are great for Phase 1 in your product development. It’s an excellent step to start your conference if there isn’t any that brings your target audience together.

Meetups and Smaller Scale Events

The best way to test this channel is by attending/hosting meetups or smaller events. These are scalable to larger events if potential customers show interest.

Throw a party

Throwing parties or hosting dinner alongside or after the conference is another successful way to reward your potential customers. Evite and Yelp used this traction in their early ventures.


Chapter 23 — Speaking Engagements

Speaking at a conference is suitable for personal growth. If you can pitch prospective customers in the right way, they will move the needle for you.

How to land speaking engagements

1. Grab the attention of event organizers by pitching your ideas for a talk at events that aligns with your industry.

2. Submitting the pitch far in advance, you are maximizing your chance of securing your spot at the conference of your choice.

3. Build your speaking reputation by talking for free at non-profits or smaller events and conferences. These past gigs act as social proofs. Also, if you do an excellent job at an event, chances are you will be invited to other events.

Chapter 24 — Community Building

Community building involves investing in the connections among your users, fostering those relationships, and helping them bring more people into your startup.

Build a Community

  • Wikipedia began with a small group of users from the Nupedia user group (an earlier online encyclopedia project).
  • Chris McCann started Startup Digest by emailing twenty-two friends in the Bay Area about local tech events. He then started giving 20 second startup pitches.

The key to a healthy community is cultivating and empowering evangelists. You also want to foster cross-connection among evangelists and community members in general (through forums, events, etc.). It is essential to focus on community quality early on and set standards that can be maintained as the community grows. You can build tools and processes into your organization (e.g., karma systems, rules) to help your community police itself.

Community building can give you traction by magnifying your essential purpose, building a core asset, creating evangelists for your service, contributing to product development, and even giving you a hiring pool.