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Ecommerce Growth Hacks
What I learned from starting my own company
Aside from finding your company’s unique selling proposition or niche in the universe, growth marketing for your startup might be the most important and difficult part of getting your ecommerce company off the ground.
I have had the luck and pleasure of starting my own company — an ecommerce clothing business called BeGood. We grew BeGood from an idea to a startup valued at a couple million dollars.
Unfortunately, my inability to raise a Series A round of financing spelled the end for BeGood and resulted in a small sale to a competitor. However, we made some effective marketing decisions that helped BeGood grow from nothing to a couple million in revenue.
Startup marketing involves a full understanding of your customer, a keen focus on cash management and cheap growth hacking wherever possible. An amazing book on the topic is The Lean Startup by Eric Ries. Ries contends that entrepreneurs should fail quickly and cheaply, rather than place large bets unnecessarily.
The ability to experiment and make fast iterations will allow you to pivot your startup to growth quickly.
Digital marketing and offline marketing for your ecommerce startup in three steps.
There is no one way to market a startup, but there are definitely some best practices for allocating your limited cash and resources. I’ll share my experiences, both good and bad, that I think will help you optimize your startup’s growth during the early days.
Creating a tailored marketing plan for your startup is challenging; one size doesn’t fit all. Read my post for an in depth discussion of marketing b2c companies versus b2b companies or learn more about growth marketing best practices.
1. “Know thy Customer”
The first step in growth marketing is know thy customer. This phrase has become a marketing platitude, but no truer words have been spoken. If you don’t understand who you are selling to, how could you possibly market your business optimally? Suboptimal marketing and lackluster optimization translates to cash inefficiency and cash burn.
Cash burn is basically the amount of cash you’re draining from your investors (or your personal bank account) per month.
The best way to understand your customer is to speak with them directly.
Email a bunch of customers and non-customers and ask to speak to a few on the phone. Feel free to ask as many questions of them as you like, but I have found in most cases that the most crucial one to ask is:
“how can we earn your business” …or…
“how can we get you to give us more money?”
While it may feel stupidly obvious or even rude to be so forward with the very people who give your business value, you will get to the crux of what your customers want from you.
At BeGood, surveying our customers gave us a unique opportunity to learn from and delight them with an individualized response from me or our customer service rep. Plus, we let these customers shop new products before other customers, which lead to increased repeat sales.
2. Find your Customer
Once you know who your customer is, you have to find them — growth marketing is all about locating pockets of potential users and rapidly learning how to acquire them in the most cost effective way possible.
It’s not surprising that a lot of startups begin their growth hacking experiments in LinkedIn Groups, on Subreddits or Facebook Groups. Think of these as the clubs of social media. Users in these groups have a common interest — in the case of LinkedIn Groups, the users may work in the same industry or have gone to the same university. Subreddits are usually interest-based, like /rapmusic or /growthmarketing.
Many Facebook Groups materialized, where local buyers and sellers could barter over furniture, crafts, electronics, music equipment, clothing and cat paraphenalia. Sound a lot like Craigslist? Facebook thinks it does. Facebook takes on Craigslist.
Where better to introduce your product or service than to a group of already interested customers? We dabbled with seeding BeGood, which sold organic cotton clothing, in eco friendly Facebook Groups, but never found much scale.
Even if you can’t get your product or service to take hold in one of these groups, use the engaged group members to gather insights about ways to improve your offering.
Don’t be afraid of where you might find your customers – there is no audience too difficult to market to.
I’ve found that in many cases, your customers’ interests and location may be completely uncorrelated with your product offering and wishes. At BeGood, we launched thinking our customer was a younger female.
A year later, we realized that she was actually a 40 year old. How did we adapt? We used older models in our product shots and changed many of our ad units to speak more clearly to a decidedly older demographic.
Now that you’ve located your customer, it’s time for the fun part!
3. Startup Growth Hacks
The early days of a startup can be some of the most difficult. With no rules and little cash, it’s a great time to hack your company to cheap (or even free) growth. The secret to startup growth hacking is a combination of understanding your customer and creativity. Armed with these tools, you will turn to growth marketing to acquire users.
When it comes to growth marketing, turn over as many stones as possible, prioritizing those tests which are free, quick or potentially large scale. Deprioritize tests in channels that are expensive and/or ones that are not iterative.
For instance, one regrettable test BeGood ran was on an adbuy with heavily-trafficked eco blog, Treehugger. We were mentioned in an article on the website in 2013 and saw a surge in traffic and over $3k in sales in a day. After mulling it over, we finally decided to buy $5k in digital display ads with Treehugger, hoping to replicate the success of our article. In reality, this is a bad test — it’s expensive and if it fails we wouldn’t walk away from the experience with many meaningful learnings. It would be difficult to firmly discern whether the test failed because of a low quality audience, bad creative or some other issue altogether.
The beauty of Google display network ads and Facebook ads is that you can test multiple audiences, images, CTAs (calls to action), headlines and descriptions at once to optimize for the best combination. The test with Treehugger was rigid and binary. We would either get it right or get it wrong. We got it wrong. Despite the incredibly targeted audience, we weren’t able to break even on our $5k spend.
BeGood found great success with with other channels, including referral program, affiliate network and native advertising.
Often, the obscure ideas end up working. See some weird growth hacks that worked well.
My favorite growth hacks that young startups have employed to supercharge customer acquisition.
1 . DODOcase makes durable and stylish iPhone and tablet cases. DODOcase, an accessories company, doesn’t look like the prototypical Silicon Valley startup. But they purportedly grew like one. They hacked their way to growth using an offline marketing trick that makes perfect sense if your customer is a die hard Apple phones and tablets customer — DODOcase knew that their customers would be first in line at Apple Stores for the newest generation iPhone and tablet products. With that, they enlisted Craigslist freelancers to hand out discount coupons for the DODOcase website to customers waiting in line for the newest Apple device. DODOcase founder, Patrick Buckley described the hack on Mixergy:
We went on Craigslist and we found people in different cities to basically go out to Apple stores and hand these out. We gave everyone a code so we could track who sold what and we gave them a commission on whatever they could sell.
So, they only got paid on what orders they could generate so there was very little risk for us. We were able to get college students and people who were just enthusiastic and energetic about a new Apple product. So they went out and they evangelized our product before we even had any product. We made basically two cases at that point.
And that just snowballed, really. I think we spent about $500 on marketing and that’s it.
I have to imagine that DODOcase’s customer lifetime value is $100+. Acquiring customers for pennies to make $100+ sounds good to me.
2. Chubbies sells only shorts. It’s remarkable, but they’ve been able to turn a business this thigh-liberating garment category into a multimillion dollar per month business. Chubbies was and still is, amazing at brand marketing. They cornered a market of aspirational young men who want to have fun and enjoy the weekend 7 days a week.
Chubbies realized pretty early on from sales data and customer feedback that southern college campuses really dug their shorts. With this in mind, Chubbies went on to make a very successful college ambassador program — so much so that other clothing and accessories startups like Serengetee and Pura Vida bracelets replicated the program quite successfully as well. Chubbies’ original playbook called for 8-10 college representatives to wear the brand, pass out freebies like sunglass croakies and beer koozies and offer friends discount codes for Chubbies products. Originally, the program grew organically from superfans, but shortly Chubbies began taking applications on its website.
Highest selling ambassadors were given gifts like paid vacations, more shorts and other stuff I would have liked a lot in college. Chubbies’ strategy was fantastic in that it penetrated a customer market that already had an allegiance and allowed buyers to enjoy and organically spread the brand by hosting events, parties and giving his friends free stuff. No wonder it worked.
3. BeGood: Affiliate marketing is an amazing way to grow a business. One of the best things we ever did at BeGood was come out of the gate with affiliate partners. Think of affiliates as your digital distributers. A California almond farmer uses a food distributor to sell more product to grocery stores all over the state than just in his/her small town. A digital marketer likes affiliates because they promote your product or service to their existing audience.
More, you only pay affiliates when you close a lead. BeGood gave away product – $3,000+ of product – to bloggers and Instagramers with relatively large audiences with the understanding that many would write about us, link to our social media, our splash page and generally promote our brand to their audience.
We turned many of these flattering relationships into affiliates before our launch, offering them referral links so that on the day of our launch they could send their audience to our website and make money for every sale we made that day. We generated $20,000+ in sales in our first week. Ambassador is a great tool for managing your affiliate partners and keeping track of their commissions.