Know your customer & perfect your proposition

In an age of targeting becoming almost impossible and platform algorithms doing a lot of audience definition leg work, you might be tempted to question why you would need to really understand who your customers are. This would be a big mistake. Knowing your customers, their pain points, and speaking their language is as important as ever. 

Broad targeting means your creative has to help your audience self-determine relevance. The more tailored your creative is to your target audience, the faster ad platforms will be at understanding who your ads are most relevant to and therefore how to drive the best performance. And in order to be more tailored, you need to know who your target customer is, where they are, and what they’re looking for. 

This applies throughout the funnel too. You can have the best ad creative in the world, but if your product is too broad and unspecific, you’re leaving money on the table. This requires really understanding your customers’ mindset at every stage of the buying journey. 

So how can you understand your customers, and how do you know if you’re doing it right? Tactics fall into two categories: quantitative and qualitative.

Quantitative methods are useful for fast learning. Desk research can often give you a good picture of the market. Conduct keyword research with tools like SEMRush to understand demand, or run ads to test propositions and positioning.

Qualitative feedback is also essential and often missed. Get out of the building. Talk to your target market. The value is in the nuance, so ask open ended questions and let them speak.

Once you’ve gathered all the data you need, we find it useful to pull it all together into a framework for a clear value proposition. This can then filter through everything you do, from your marketing campaigns to your product.

In practice, this will look like this in your marketing copy:

For [audience] who [pain point], [Company] enables [Emotional benefit].

• [Functional benefit] through [feature]

• [Functional benefit] through [feature]

• [Functional benefit] through [feature]

Measuring and analysis

Tracking and measuring progress is more important than ever when aiming for increased efficiency. Especially in uncertain times, Business As Usual changes. Propositions, creative, even whole channels that worked before can fall off a cliff very quickly. You need to have a grip on your metrics to understand what’s working, what’s not and (perhaps most importantly) why. 

The first step is understanding which metrics are most valuable to track. LTV:CAC ratio is the metric all other KPIs should feed into. Ultimately, if on average each customer you acquire is worth more than you paid for them, you’ve got a viable business. How much more will determine how fast you can reinvest into growth.

Understanding how each metric impacts LTV or CAC is important. You’ll often hear people talk about avoiding vanity metrics. These are essentially metrics that you can’t confidently attribute to impacting either CAC or LTV. 

Once you know what to track, the next question is how. It’s no secret that with the iOS14 update and the imminent ‘cookie apocalypse’, tracking and attribution are getting much harder. Businesses are being pushed from deterministic to probabilistic attribution, as the ‘source of truth’ ceases to exist. But the truth is even without these blockers, startups were rarely seeing a full and true picture. A reliance on linear customer journeys and last-click attribution meant they were often flying blind even if they didn’t realise it. Third party attribution tools like Triple Whale have certainly helped with this, but we’re also seeing a big shift back to the days of uplift tests and post-conversion surveys becoming more and more important. 

These are the best ways to truly understand potential halo effects and cannibalisation. For example, we often see big upticks in organic search performance from paid campaigns. Conversely, startups often pay for traffic they would have received anyway through things like branded search campaigns. The most public example of this was when Airbnb slashed performance marketing budgets and saw record profits.

Triangulating various data points and systems is the only way to get as accurate a picture as possible now.

Utilise technology and automation

No article on efficient growth would be complete without mentioning the recent huge leaps in technology available to startups. AI and automation are key to scaling efficiently. From copy and design to data analysis, low/no-code, low cost tools are popping up everywhere which promise to automate your manual processes and free up time to focus on higher level strategic work. Increasing your output with limited resources has never been easier. 

As has been widely talked about over the past few months, the key with these tools is to use them to amplify your efforts—not replace them. As execution costs trend to 0, the differentiator will be in your creative input and the context you feed these tools. Without this, output will be generic at best. But done well, the potential is incredible.