Marketing budgets are a funny thing. Some companies view marketing as an upfront cost of customer acquisition. They look at things on a longer view, the so-called “lifetime value” of the customer. Other companies look at more immediate returns. If their campaigns don’t return at least 100% on their investment, they consider it a failure.
In the web services industry, you have a few very big players, who are ready, willing and able to spend millions of dollars per day to acquire customers. There are some very obvious positives to having a large marketing and customer acquisition budget. Your company will hopefully grow exponentially. And there are some very serious downsides, such as scale, support, infrastructure and the delivery of services to sustain that kind of growth.
At Skystra, we had a marketing budget of zero ($0) whole dollars for many years. For a number of reasons, including reinvestment into the technology, platform, growth of the various teams at our company and more. The big question is then, how did Skystra grow by not putting money into marketing?
That’s where I tell you that the title of this post is a little lie. We didn’t put any direct money into marketing, no paid search, no deals with influencers, no affiliate programs. But, we did hire a very clever, driven individual that was able to use new tools and channels out there to grow our customer base, without any of the traditional marketing expense.
Talk to your customers.
This is a point we make a lot in previous posts, and it comes up again now. Your customers aren’t just those who already signed up. They’re all those who will need your product or service, even if they don’t know it yet.
These customers are everywhere. Social media (and the dozens of services in this industry), classes, universities, groups, workplaces and more. When you don’t have the money to reach out to potential customers via automated means, you need to reach out and talk to them. What problem are they having, or what idea do they have? And is there anything we offer that can help them? Solve the problem, or empower the idea. And you can only do that by finding and talking to them.
This approach also let us grow organically, which is another word for slowly, but surely. It truly was and is a sustainable growth though. We had to become clever in how we approached problems. And our earlier customers found problems, reported them, and we had the time and space to learn what these problems were, and how to fix them.
I truly believe had we grown like a hockey stick in a graph chart, we would not be the same company today. That slower growth has not only led to our ability to scale properly, but also leads to much higher renewal numbers. The customers you speak to prior to their subscribing to your service are much more likely to stick with you, even if you make a mistake or two.
There is a certain trust that is built when people talk to each other, and that trust early from from customers and potential customers helped us become the company we are now. While we now budget for all those traditional marketing channels, we’ve never forgotten how we got started, and we go all out every day, still talking to customers, one at a time.