Avoid the trap of paying to acquire customers at the early phase of your startup. It is a very bad idea because doing so introduces many fudge factors which will make it impossible to understand the product viability.
As I have noted, do not pursue massive customer growth unless you are able to RETAIN customers. Why? You can spend all the money on marketing, and if you are unable to retain customers, once you stop paying those customers, they go. There is always the next app there!
Focus on what matters: make customers become FANS and that means loving your products because you offer value. Sure, you can spend money on initial launch to kickstart a business (physics supports that); it is one way of breaking customer inertia. But sustained paid-driven growth strategy will fail.
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Customer discovery and customer validation are critical phases in product development. There is a reason in that village that makes everyone want to buy palm wine from Mazi Nkwo. That market woman that sells food at the corner of the telephone mast in the market never takes food home because she finishes it. What is the secret? Empathy: seeing markets from the perspectives of your customers and creating products and services to fix their frictions.
In Oriendu Market in Ovim, I sold garri and yam for my grandmother. And in FUTO, I owned a magazine, FUTO Bubbles, and to this moment in our companies, I have this conclusion: if you cannot retain customers, you have no mission because customers are the best INVESTORS in business. So, I call you to stop chasing vanity metrics.
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Comment on Feed
Comment: Ndubuisi Prof in the phone app and online engagement space its called ‘paid user acquisition’ the opposite of which is known as ‘organic user acquisition’.
Generally in a pitch, VCs HATE to hear about a paid user acquisition strategy, and the moment it rears its ugly head they switch off.
You have released another article about how different new developments defined various decades in Nigeria…
I would say ‘paid user acquisition’ as a strategy had its day from roughly 1995-2005 globally – roughly the first decade of internet.
Now it seems more dated than a dial up modem, and exposes an entrepreneur as out of touch.
My Response: paying for something does not mean transferring money. In my construct, it goes beyond “paid user acquisition’ . When you have an ecommerce website and you sell a shoe for $25 when it was bought for $30, that is the same thing even though you did not “pay” the buyer. In other words, here, mindless discounts are included. The model is always: pick that $5 tab and hope next time the customer can pay even $35.
That paying can include contracts: move from Merchant A to B, and we will discount 30% of the first year. Those things can work when customers are not paying the full value and can take any average product. But check if they return when the full price is listed.
Comment 2: Cost of customer acquisition is on the rise globally
and will keep rising for the forseable future. Owned media should be the goal and customer retention strategies should be the ultimate skin in the game.
My Response: “Owned media should be the goal ” – I agree even though it takes time to develop it
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