How to choose the right channels in your Acquisition strategy

Crafting your channel acquisition strategy? Here’s a quick guide - 

In the world of ever-increasing Customer Acquisition Costs (CACs), knowing what channels to prioritize can be a little tricky, and more often than not, if done without adequate research, it’s literally equivalent to shooting arrows in the dark, hoping to hit the bull's eye. 

Well…It’s a wise choice not to have just one channel as your main acquisition channel. Here’s a quick framework to align your acquisition strategy with growth in real terms - 

Decoding Channel Market Fit -

While many of us are familiar with Product-Market Fit, Channel market fit is the synergy between your product and the distribution channels through which the business reaches the end-users. In short - It is choosing your channels in the acquisition framework. It's about understanding where your target audience resides, and ensuring your product is not only present there but also well-positioned.

Confused? Let’s go back to the basics -

The study of economics defines a fundamental concept - ‘scarcity’. We have unlimited wants and needs, However, our resources are limited. Hence, one has to make a choice. 

As you navigate the channels available to your products, a systematic approach can make all the difference. Let’s break down the components of Channel Market Fit and how to strategically approach each one:

1. Channel name - Identifying the channels that align with your brand and resonate with the audience, whether it's performance marketing, social media, creating a community, etc. Each channel has its unique characteristics. Choose wisely based on your product and target audience.
   
   
2. Intent - Clearly outlining why the brand needs to be using a specific channel. Is it to tap in on a new demographic, leverage a growing trend for short-term conversions, or enhance overall brand visibility? Understanding their intent will guide your approach and ensure your conscious presence. On an objective level, whether you’re present on the channel for awareness, consideration, or conversion.
   
   
3. Cost - Evaluating the financial implications of each channel, consider not only direct costs but also the potential ROI. A channel might have a higher entry cost but could yield significant returns, making it a strategic investment rather than an expense.
   
   
4. Efforts - Assessing the manpower and resources required to maintain and scale on a channel. Some channels demand a robust content strategy, while some are highly operation-driven channels. Streamline your channels to maximize efficiency and output.
   
   
5. Scale - Nothing feels more disheartening than knowing that you always had a glass ceiling above you and you could have invested resources in a much better channel for your ROI. Consider the scalability of the channel and understand whether a channel has the potential to scale or plateau for your brand. - Align your channel strategy with your long-term growth to ensure sustained ROI.
   
   
6. Turnaround time - In the dynamic world of business, timing is critical. Evaluate the turnaround time for each channel. From onboarding to seeing tangible ROI. Prioritize channels that allow you to swiftly capitalize on the opportunity along with giving you advanced consumer insights.
   
   
7. User segmentation - Understanding the user segments that are prevalent in each channel can rapidly increase your acquisition metrics. Tailor your messaging and positioning to resonate with the specific segment of your users.
   
   
8. Key component - While each platform has its own characteristics, some social media platforms like LinkedIn work on network effects hence relevancy of the audience and content resonance ends up being the differentiator, while a channel like email marketing, where factors like deliverability, open rates, CTR etc, your tech + content makes the difference. It is imperative to understand what’s the key component of the channel. 
   
   
   

The acquisition landscape is ever-evolving, and so should be your channel strategy. Regularly assessing the performance of your channels and being agile in adapting to emerging trends or shifts in audience behavior. By meticulously considering these components, you can craft a strategic blueprint for Channel Market Fit.

One could even quantify the process for more accuracy, for eg: rate each channel and variable out of 10, and add in all the variables to get a channel score, it not only gives you a framework worth relying, on but also churns out your next channels to prioritize and take your acquisition strategy onto next level 🚀

The Evaluation Time:

Having to measure your investments with your ROI is the bedrock for any strategy call. Below are the most important metrics on the basis of which you can make changes to your acquisition framework -

1. Conversion Rates - Track how many leads from each channel convert to customers, if one channel consistently outperforms the others, it's a sign of a strong fit.
2. Customer Acquisition Cost (CAC) - Analyze the cost of acquiring customers through different channels. Optimizing your CAC for more efficiency and better ROI. 
3. Customer Lifetime Value (CLV) - Understand the long-term value of customers from each channel. A higher CLV justifies the resources invested in a particular channel.

In a world where every strategy team is optimizing for Revenue Operations (RevOps), it has become imperative for teams to allocate resources to channels that give them the highest ROI, even when it is about acquiring the users that will grow the business. Achieving channel market fit is not just a goal; it’s a strategic imperative.

Now the next time you want to answer which channel you should spend your ‘limited resources on’, revisit this blog to gain perspective on the same!