ROI Focused Marketing - for startups and growth brands

Table of contents:

Depending on what stage your company is in, you can skip some of the early steps, but we’ll start at the beginning.‍

Overall we’ll cover:

Product Launch – the basics needed for marketing & branding
Testing User Acquisition (UA) – understanding your baseline cost per acquisition (CPA) and designing experiments to improve it
Scaling UA - optimizing your channels

Product launch

Whether it’s a physical product or software, B2B or consumer, there are best practices we can cover, but we’ll focus on B2C companies first. For this section, we’ll assume the product has just launched. We’ll also assume you have basically no budget at this early stage.

Website

We’ll assume you have a simple site, aka from SquareSpace/etc.

Instagram

Arguably the most important touchpoint for consumers is your Instagram page. You’ve probably visited more brand's pages on IG recently versus their WWW site.

Creating Content for Instagram: working with Content Creators is the lowest-cost and easiest way to scale high quality content at an affordable price-point.
If you’re just starting out, find a creator/influencer via searching on Instagram (hashtags/etc) and message them about creating content for your brand in exchange for product and/or payment. While prices are on average are higher than this, if you find the right creator you could get content from them for $100-250 per photo; prices are lower if you’re working with a creator for multiple pieces of content at once. It’s common to pay up to $500/photo for top-notch IG photography, and even more if it’s a professional designed Ad Asset (e.g. a Promoted Pin for Pinterest, etc.)
Images vs. Video: When first starting out, you want great imagery to brand your IG page. One you start doing paid social you should invest in videos which are more expensive but perform better. (More on Paid Social later.)
Instagram Stories: there’s a lower bar for quality with IG stories, and for this it would probably be acceptable to either have a teammate run it (behind the scenes shots, etc.) or just ask the creator you’re collaborating with for main IG page content to run it for an extra fee. On average content for a multi-tap Instagram Story (not an influencer story post) costs in the hundreds of dollars range as well. IG Stories are significantly more expensive if asking influencers to do a sponsored post about you, but we’ll get to sponsored posts and influencers later.
Getting followers: In terms of getting followers, a reliable way to do this is to follow accounts and engage with them. Many follow you back, and you can unfollow people who don’t if they’re not engaging with you. To find people, try searching hashtags that are relevant to your brand. It’ll look weird if you have a very low amount followers, and also if your ratio of followers-to-following is off (e.g. 100 followers and you’re following 5000 people). This might be controversial, but when starting out you can probably even buy a few hundred (or low-thousands) of followers, but it’s also weird to consumers if you have 10k followers and 9 Likes on a photo, so watch out for that too.

Other social media accounts?

TikTok: Some brands decided to focus first on TikTok instead of Instagram, and with a little more effort I would say you could get more engagement & views there, but content creation is trickier, so my default recco is to start with IG. We’ll get to TikTok shortly.
Pinterest, YouTube, Twitter, or even Twitch or Snap could actually be best for your brand, but as a general rule of thumb I would invest in Instagram first as it’s the most straightforward and a good default place where people go to learn about your brand. We’ll touch on these networks shortly.
Start small: In general we’d advocate for doing a small number of channels right versus trying to be everywhere.

Email

You’ll want a way to catalog your customers and capture a point of contact and way to own that relationship with them- e.g. Mailchimp, etc.

Storefront

If you have a physical product, we’d recommend Shopify.

Testing User Acquisition Channels

In general, startups should think about UA in terms of your first 1, 10, 100, 1000, 10000 users. The tactics for each change.In general, you’re also searching for roughly 5-10% weekly growth if you’re a few months old and 100%–300% YoY growth in the first year or two, and if you’ve been around a few years maybe 40%-150% growth. (For SaaS companies to become a unicorn or go on the path to IPO, some people say you probably need to 3x three years in a row and 2x two years in a row: T2D3. There’s also metrics for SaaS companies doing this cost-effectively, like the rule of 40%. )Anyways – these are huge huge huge oversimplifications. But if you’re getting 10% weekly growth (even with a small baseline) for the first 4-6 months of your company’s life, you’re probably doing something right.

First user: this should be you. The best products come from people who are solving a problem they’re familiar with. I worked in advertising before Pop Pays so I knew a bit about this industry, although I wasn’t a creator. Still having the background helped me navigate the industry a bit. If I was getting into tools for the financial industry, I’d probably face a much, much steeper learning curve.
First 10: these are friends you text, family members you email, ex-teammates you’ve worked with that you hit up, etc.
First 100: these are people you hit up on IG or FB messenger, or maybe your team is posting on your personal social channels, or emailing all the people you can think of.

At this stage you’re getting alpha / beta users and trying to see if they’re getting earnest use of the product. If it’s an app you want retention - maybe >33% of the users are sticking around after 1 month, for example. You don’t want to see churn at this stage. If you have no repeat usage or engagement, talk to users to figure out how to make the product better before moving on from this step! This is very important!

First 1000: here you are starting to test user acquisition channels. You want to understand your benchmark Cost Per Acquisition (CPA) and then design experiments to see if you can find more efficient channels than your benchmark. For benchmarking I would suggest Paid Social, and for experiments to run, you could test anything from AdWords, Email Marketing, SEO, posting on message boards (Quora, Reddit), influencer marketing, referral programs, etc etc.

Benchmarking Your CPAIf you’ve just launched and relied on “doing things that don’t scale” for your first 1, 10, 100 users (which is good!) then paid ads on Facebook / Instagram are often the best way to test the waters and see what your baseline CPA is so you can understand what you need to beat.If your CPA is under the revenue you make from your users/sales, then you’ve already got the right dynamics for a profitable business. For example, if you spend $15 on Facebook to acquire a customer who buys a $50 product from you where you have 50% gross margins. You’re making $10 in profit per sale then, and could continue re-investing in ads and making tons of sales & revenue. The same is true for freemium products: if you’re Dropbox and you spend $5 to acquire a user, and for every 10 users, 1 signs up for a $99/year plan, then Dropbox spends $50 to make $99.What makes successful AdsInterestingly, for all of the fretting around audience targeting, Facebook has repeatedly said that the biggest mover for Ad performance is actually the creative.Getting started on Paid SocialFB’s business manager and advertising tool set makes it pretty easy to get started, and most platforms have ~$100 coupons for businesses to get started with their self-service tools. However, I think Paid Social is for the point where you can comfortably invest at least a few thousand in Ads. (Many of our startup/growth clients have test budgets in the thousands –or tens of thousands– but if the ROI is positive, they have the appetite to spend millions, since they can keep funneling it back to profitable growth.) Sometimes venture-backed startups still decide to spend huge amounts in advertising because their ROI is decent enough to where they expect to recoup the cost of the ads over time based on the lifetime value – LTV – of the customer… or perhaps it’s a land grab and they just need to own the market. Our company’s recommendation is to not scale up advertising if your CPA is less than your expected LTV, but rather to use your budget to test more channels to lower your CPA.Getting Content for your AdsAgain I would recommend using Content Creators to source content here, although using plain lifestyle content built for an Instagram feed won’t always have the highest ROI. At Pop Pays we have a group of creators “The Pop Shop” who are trained in ad assets (Carousel ads, etc) but if you see a creator who looks great at not just photography but editing, that’s a great sign. For example, a video Instagram story with engaging graphics and a Call To Action (CTA) of “Swipe up!” will perform better than a static image. A good video will cost in the low thousands of dollars.Note: if you're getting to the point where you need to scale content, try using Pop Pays Lite to find an editor or Creator and collaborate with them.TrackingA good reason to start with Paid Social is that there’s tons of collateral online about how to set up ads, tracking systems, etc.Pop Pays is happy to take over full service management of boosting your content for a low transparent fee, but if you’re setting it up yourself, try to ensure you’re getting data around the conversion performance of your ad. If you don’t have a product yet, sometimes just using a Lead Gen ad unit and capturing a customer’s email address is a good way to capture value at this stage.Semi-normal rates for CPAs and CPIsAnother huge generalization here, but if you’re a company selling a physical product, subscription box, a supplement, etc - your CPA might be $50-100. If you’re a free game, your CPI might be $1-5. However so much depends upon your industry that it’s really critical to learn your own benchmarks. I would spend more time than you think testing different ad units and pieces of creative, as people often are surprised that 1 piece of content has a 10x or greater difference in CPA/CPI than the other! As an example, my friend tested two batches of creative with a few thousand dollars and got a $2.50 CPI with one ad and 0 conversions with the other.

Testing New Channels

Let’s say we have a subscription box company as well as a freemium tool, and they found that the CPA for the box is $100 and the cost per install for the app is $5. What now? If the CPA < LTV then keep investing and optimizing! But you can also try discovering new channels to see if they provide a better CPA:

AdWords – this is another great one to start with since it’s also very scientific, there’s lots of writings about it, and you can get a benchmark CPA pretty easily. However unless you have a real niche it’s often not the most efficient CPA. (Some keywords, like “Insurance” or “Loans” are a real bloodbath, with >$50 Cost Per Click prices!)
Email marketing – as you get email addresses, you can be using them to send offers, news, etc. Make sure you’re building this from the get go. You can also put out resources (e.g. an online tool) that is free in exchange for an email.
SEO, Blogging, & Content Marketing – this is a slow burn, and it can take time to return positively, so I don’t recommend it as the #1, but if you use Google’s Keyword planner to research keywords with low competition but high searches, you could make niche content relevant to your customer. Just aim to be helpful.
Influencer Marketing – influencers are tricky to get an ROI with, but can be really impactful if you nail it. We’ll do a separate section on just this!
Online communities - you could use Reddit, Quora, etc to respond to relevant questions surrounding your industry. Like SEO, just aim to be helpful.
Other paid social (TikTok, Pinterest, Twitter, YouTube, etc) - You can often drive great results across TikTok, Pinterest, Twitter, Reddit, Snap, etc using the same methods as we detailed above.
PR - you can try to get some news about your startup/product! People often overestimate the impact of PR, but it’s certainly helpful to have some articles to use as validation for you, so it’s worth investing in.
Referrals - talk to each early customer and offer an amount lower than your benchmark CPA; you can also grow by viral loops, like how Dropbox offered 1GB of free storage to new users (or PayPal gave $10 to new users.)
Offers – this can be combined with other channels, but giving a free sample of the product/service is a super super powerful way of driving trial. If your retention is good, all the better.
Organic Social - posting and relying on organic growth is tough, but if your product/service results in helpful content (e.g. like how Pop Pays has great Creators who make amazing content), you could re-purpose that on your own feed to show off the product/service and drive some natural awareness and community-building.
Webinars, events, etc.
Partnerships
Hacks & Growth Tactics - you can get super clever with growth hacking. Maybe you get a Twitter bot that “Likes” or sends a canned reply to every tweet in a certain hashtag.

Recommended Reading:How To Measure the Return on Investment (ROI) of Your Influencer Marketing Campaigns

Don’t forget about retention

True growth is retention. If you retained every person you brought it, you would grow tremendously fast, and retaining a user is easier than getting a new one. You also learn a ton from retention. If you fix a problem for one person and get them to retain, you might also keep many others from that same effort. If ever you have a leaky bucket, go back to talking with your customers - the power users, the ones who churned, anyone - and try to learn more about how to make your product & service better. Once you have a great product and service, it magnifies your efforts in all other areas of the company, including marketing!Up next