On the way to work Tuesday, I was offered vouchers from three different start ups, before I even made it from my house to the train station.
At first, this presents as an odd marketing strategy for companies which brand themselves as digital powerhouses, but in practice demonstrates the increasing problem faced by all start ups – a skyrocketing cost of customer acquisition.
What’s fascinating is that in this environment, it appears that what are considered the more traditional forms of marketing communications truly excel.
Increasingly, the problems being caused by the rocketing cost of acquisition is being recognised by venture capitalists. It’s no longer enough to turn up with an incredible new technology which will push a traditional industry into obsolescence, start-ups need a marketing and communications strategy, with a relationship with a strategic PR firm. For some VCs, this is now the price of entry.
But what is the long term outcome of this transition? The cost of customer acquisition is only going to continue increasing, the price of Google AdWords will go up exponentially (research indicates that in Q2 2015 alone, CPCs for brands rose 40%), and I’ll continue to receive my daily quotient of three vouchers on the way to the train station.
research indicates that in Q2 2015 alone, Google AdWords CPCs for brands rose 40%
But the one, truly traditional, cost of customer acquisition that will not change is the ability for start ups and their founders to polish and refine the story of their business, telling this at every opportunity, through every available medium. For the powerful story transcends a single paragraph adword, creating an emotional connection with a brand and individual and driving long term purchasing decisions.
A powerful story that resonates starts with simple questions – why are we here? what drove the development of the product? whose lives are we seeking to change? But the true power of a story lies in the ability for those who hear it to become evangelists – this sharing is inherent in human nature, and not only underlies the power of social media for brands, but also the power of traditional media and strategic communications in acquiring new customers.
For while print media faces its challenges, the power of using mass media for brand communication is not diminishing. The wide reach of these outlets ensures that a broad audience will hear your message, and even if 90 per cent of this audience isn’t interested in your message, if you’re telling a powerful enough story, they will want to share this with those in their community who will benefit from your product or service.
It certainly seems like a better way to keep your cost of customer acquisition down than paying someone to hand out thousands of vouchers with a minuscule conversion rate, surely?