Customer Acquisition is hard

Customer Acquisition is hard

Without customer acquisition you don’t have a business.

Getting people to care about what you are doing, and eventually buy your product is hard.

For a while I coasted off of the attention we got from launching our first product, but as I dive into the SaaS world it’s becoming clear that a better strategy is required.

Customer acquisition is important for any business, but it’s especially important for a SaaS product.

Jason Cohen points out that in a SaaS business, cancellations are more costly than just the lost revenue. In fact, due to customer acquisition costs, if 10 customers cancel, you have to get 12 (or so) to sign up just to stay flat. So 12 new people signed up this month, and you have not grown, you just kept from shrinking.

There are lots of ways to go about this, let’s look at a few.

Content Marketing

Definitely my favorite, but takes the longest to see returns.

All types of businesses do content marketing, you just don’t recognize it as that. Television producers create free content (tv shows) week after week, and make money by selling ads. Newspapers and magazines are the same. On the internet, you can produce articles, podcasts, and videos.

The easiest type of content is blogging, but many times people get lazy with blog posts. They look at the mediocre posts everyone else is doing and think that’s all they need.

Having a strategy and putting in the time to make high quality content is the key. Here are a couple of real life examples of content marketing.

Groove’s transparent journey

My favorite example is the startup journey blog over at Groove.

Groove blog

Groove CEO Alex Turnbull has chronicled the company’s growth from zero to $100K/month. It is shockingly honest, and completely transparent. It is also well written, it has great images, and it contains real numbers.

I would highly recommend reading through it to see how they strategize content marketing. This blog is not a willy-nilly string of posts, it’s execution of a strategy. They are very open with the fact that the content they’ve created has generated real returns for their company.

A guide instead of blog posts

A couple of years ago, I created a WordPress Theme Customization Guide. It’s pretty old now (and hasn’t been updated in years), but that guide ended up doubling that site’s traffic with over 10,000 views per month.

Instead of creating a series of blog posts, I put a little more time into the design, and that made it stand out. That guide got thousands of visitors to that site for years. What would that have cost in ad spend?

The great part about content marketing is that the rewards last for so long after you’ve done it. A high quality article or video you make will bring traffic to your site for years to come. Years.

Find some time to make good content, it’s worth it.


Affiliates can be a great way to acquire new customers.

The trick is to get high quality affiliates that serve your target market. The spray and pray approach will not work here, low quality affiliates are a time-suck. They can also contribute to fraud, and who needs that?

The best way to get high quality affiliates is to develop relationships with people who serve your target market. In my case, I want to get in touch with churches, and show them how to create mobile apps using my product.

I contacted a friend of mine who sells WordPress themes to churches, which is a perfect fit. I’ve also been contacting other friends who do WordPress website design about getting apps for their clients. I’m not hard selling them on being an affiliate, I’m trying to find a plan that works for them just as much as it does for me. So far the response has been good.

Develop relationships with people who serve your target market, and start a dialogue. Figure out an arrangement that works for them, not just for you.

Standard affiliate commissions differ, in the SaaS world it can be anywhere from the first payment, to the first few months payments or more. Whatever you choose, make sure you do the math on how long that customer has to stay to make it worth your while.

Hosting companies sometimes offer the first 6 months of payments, but if you don’t know for sure your customer is staying at least double that time, don’t offer that!

For Reactor affiliates, we are offering a flat commission of $60 per referral. As I learn the value of the customers I get from affiliates I can then adjust that up or down.


The easiest to start, but one of the hardest to see returns from.

It’s easy to buy a Facebook ad, or start an AdWords campaign, but it’s really expensive these days. You really have to optimize the heck out of it to see any returns.

Buying ads too early is a mistake. If you haven’t reached product/market fit, optimized your landing pages to collect leads, or setup a marketing funnel, it’s a waste of time.

Until you know the exact percentage of prospects to conversions on your site, and you’ve done the math on ad spend to conversions, don’t run ads.

For example, let’s say that 1 in 100 visitors to my website buys something worth $50. If it costs me $30 in Facebook ads to get 100 visitors to my site, then I know I can make $50 on every $30 I spend on ads.

If you simply buy Facebook, Twitter, and AdWords campaigns without a strategy, you’ll see little to no returns.

Finding new channels

I have found that early on, you don’t know which channels are going to be the most profitable.

You have to pick a few and invest some time, then see what the results are. In my case, I haven’t found a silver bullet yet, but I know spending time in content marketing and affiliate partnerships will pay off.

I’ve also embraced Paul Graham’s philosophy to do things that don’t scale. Sometimes that means getting customers one at a time.

Getting a startup or product going is like pushing a boulder uphill, but eventually it gets easier. Maybe someday the boulder will be rolling downhill from it’s own momentum, but until then, I’ll keep pushing.

What type of marketing has worked for you? Let me know in the comments.


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