Startup Marketing, Learn To Farm As Well As Hunt
Most startup marketing focuses on hunting for new customers, rather than trying to ‘farm’ customers to build sustainable long-term growth. Hunters rely on new customer acquisition strategies to constantly replenish their customer base, moving onto the next prospect once the deal is done. The energy, buzz and ‘vanity metrics’ associated with ‘capturing new prey’ makes hunting a tempting option for most startups. Farmers drive retention and build lifetime value through constant nurturing, fertilization and re-sowing.
For farmers, the focus is on cultivation:
- 1To prepare and work on in order to raise yield
- 2To promote and improve growth by labor and attention
- 3To develop or improve by education or training
By appropriately preparing, attending and educating customers, they are more likely to: a) stay with you over the long-term, b) increase their value to you, and c) tell others about the experience and hence attract them to you.
A Question of Balance
Too many startups (and establish business for that matter) put the majority of their marketing focus and resources behind getting new virgin customers through the metaphorical door. I’m not advocating that this is an either / or; moreover that farming is currently severely underutilized by the majority of businesses and the balance needs re-dressing. That said, there is no one ‘right’ answer for this juxtaposition and it really depends on the audience, sales cycle and business model in question.
The old adage in marketing circles is that it costs 5-10 times as much to acquire a new customer as it does to retain one. Whilst the validity of this truism can be questioned, the benefits of farming are much wider than the pure economics of retention extending to how you quickly customer-return ramps; the growth in overall lifetime value; and the potential cross-pollination to new ancillary audiences.
The Future of Startup Marketing
Farmers generally understand customers to a much greater degree than hunters, a trait that will become increasingly relevant as new data-driven technologies emerge for sensing, interpreting and targeting customer behaviors – virtually and physically – leading to a new contextual relevance for both marketing and consumption. Farming will become a much more requisite practice in the future, therefore, as customers demand and come to expect a more personalized and relevant engagement throughout their journey.
Farming in Practice
To acting as a farmer you should:
- 1Focus on how you prepare and welcome new customers into their consumption experience. This is as relevant for consumer-products and it is to business-to-business; consider Apple’s famous ‘unboxing’ experience. Ensure that the transition from prospect to customer is seamless and that the promise made is consistent with their reality upon adoption.
- 2Build customers’ understanding and appreciation through education and training. Not only will this lead to greater opportunities for wider and deeper product usage, but they’re also likely to pass the knowledge gained onto other customers and potential prospects.
- 3Foster and encourage cross-pollination by building sharing directly into the product functionality. This doesn’t mean merely adding social buttons to your pages, but looking at reasons why customers would want to share – what’s in it for them?
- 4Understand which crops deliver the greatest yield and focus on these. Always be fair, transparent and supportive to all customers, but maximize your engagement where you’re likely to see the greatest returns.
Farming isn’t a short-term game, which is why many startups shy away. But it is the path to real, sustainable and profitable growth over the long-term.