Customer Acquisition Tactics for Startups on a Budget

By
| Last Updated: September 01, 2017 |

Reading time: 4 minutes

Apart from product development, customer acquisition is one of the toughest stages of building a startup. The customer acquisition phase can determine whether your startup will take off or will be among the many that will never be known.

Today, getting traction for startups is more difficult even with ”TechCrunch”, ”Mashable” and ”VentureBeat” still around. Getting Crunched or Mashed is not a startup strategy as Alex Turnbull of Groove says here. There are only so many startups that the press can cover at any time.

Visionary startup founders use the press to complement already established customer acquisition strategies. Entertaining the press is good but it should not be relied on as the major launch strategy. Even with a small budget, it’s still possible to get the word out about your startup and get thousands of users within the first few days.

Now, not every marketing technique will be right for your startup. It may take a few experiments to determine which techniques to concentrate on. However, some of the best user acquisition techniques are free or low-cost to implement. By checking your user acquisition metrics, you can narrow down on the techniques that result in the most customers and concentrate on them.

Let’s look at some examples.

Launch Strategy

Launch Strategy can propel your startup to growth when you understand your users and create an element of scarcity of your product. Mailbox is an email startup that rightly used this strategy.

To begin, Mailbox started as an invite-only product to build massive growth. This is typical of what many startups do during their beta periods.

However, Mailbox took things further. They created a one-minute demo video on how the product worked and the number of people that were in line in front of any new user were on the waiting list. The result? One million users on the waiting list in six weeks.

Creating a sense of spectacle and scarcity of your products can help you gain users fast. One way you can do this is to create social proof by giving customers a way to show their connections that they are using your product.

Referral Marketing

Most people associate referral marketing with the old school direct selling marketing. However, nothing can be farther from the truth.

Referral marketing is to online companies what word-of-mouth is to offline brands. With referral marketing, your users do all the hard work for you. They suggest your product to other people, who are likely to buy.

According to this study by Nielsen, consumers trust recommendations from real friends and virtual strangers. A recommendation from a virtual stranger can lead to more signups, than perhaps a PPC ad. This is what Dropbox did in its formative years.

After struggling for more than a year to find a marketing strategy to ignite growth for their company, the team opted for referral marketing. Their efforts turned out to be one of the most successful viral referral programs for tech companies. Today, 35% of Dropbox’s customers still come through the referral program.

There are two components that are important in Dropbox’s viral program success: a good product and referral from trusted users.

Content Marketing

Sprout Social is a Chicago-based startup that recently completed a series B funding of $18 million according to Crunchbase. The SaaS company provides social media management, engagement and analytics tools and boasts of customers such as Pepsi, McDonald’s, Nokia and AMD.

The social media management tool space is very competitive with players such as Buffer and Hootsuite. To counter this, Sprout Social has gone all out with its content marketing. You will see the company all over the media, in everything related to marketing and social media conferences. Recently, it was highlighted by Fox News Chicago as one of the 20 best places to work for millennials.

Sprout Social’s website features simple, benefit-focused messaging that invites visitors to sign up for a free trial. The front page has been optimized for the keyword “social media management software” and scrolling down, provides visitors with what the software does, who uses it and examples of customers.

However, it’s the company’s Insight section that cements its content marketing efforts. The team posts at least once a day with thought leadership pieces on business use of social media. There are also helpful guides, press coverage and thought leadership pieces in its Resources section.

Successful User Acquisition

Before you start marketing your product, check that there is a market for it. Snooping around Reddit threads and going through the discussions on YCombinator can give you an idea on whether people need your product.

Users will always find a great product. However, a poor product will not always find users.

Author of the post

John Solomon

Marketing Leader / Sales Enabler. Head of India Operations for @Infrascale / @sosonlinebackup.

Hear from a team of curious beings
A team that’s bent on delivering the best stories, lessons, and observations on SaaS, straight into your inbox. Every week.
SaaS Dispatch Team

Subscription Billing Made Easy

Try for free

Recent Blog Posts

SaaS Growth and Recurring Billing
Unhacking SaaS growth and rethinking recurring billing's role in it

Behind the question of whether a billing system can help your SaaS business grow is the question of what it means for a SaaS business to grow. This guide tackles both — it creates a model you can use to approach SaaS growth and a 360-degree view of how your billing system fits into it. Read More >

Scaling SaaS Billing
Scaling SaaS Billing: How To Plan For The Insanity

Scaling your SaaS billing system can be complex. Here's the guide to making sure your subscriptions don't suffer for it. Read More >

Purpose Driven Friction
Friction Isn't Always the Bad Guy in User Experience

How friction improves UX in SaaS, how it helped Chargebee's onboarding and activation flows, and the right way to handle positive, purpose-driven friction. Read More >

Subscription billing software that lets startups deliver recurring happiness to customers.
How Chargebee Works