Strategizing for exponential growth from content marketing
In a recent article, we discussed how the customer journey is evolving, and what this means for consultants and other small businesses. Three key takeaways from that article are that a content marketing strategy should:
In this article, we’ll build on these takeaways by discussing the strategy of using growth loops to boost customer acquisition, sales, revenues and profits.
Why your business needs growth loops
Perhaps the biggest killer of businesses – especially smaller, niche businesses – is startup costs and poor cash flow.
Consultancy and coaching businesses, for example, can be very lucrative. You are imparting your expertise and improving the fortune of others. That kind of help and advice does not usually come cheaply. However, to grow your business you must acquire customers. Traditional methods of doing so are expensive.
The cost of customer acquisition can be easily calculated for any method of marketing. If you run a newspaper ad that costs $1,000 and you gain two customers, then your customer acquisition cost is $500. If you spend too much money acquiring (and retaining) customers, your business will die.
To grow your business fast and exponentially, you need to utilize the power of growth loops. This will help your business grow more organically, maximizing the cost of marketing and reducing the cost of acquiring customers.
What are growth loops?
The old, defunct way of charting a customer journey was to use the sales funnel. You get as many people to view your content as possible, and hope that as they move down the funnel you don’t lose them. The result is sales at the end of that customer journey. However, there are several disadvantages to this. These include:
- The output (sales) is dictated wholly by the input (prospects)
- This type of sales funnel doesn’t focus on developing sustainable growth
- Funnels create silo thinking within organizations
Consider how companies and teams are structured and incentivized. There are marketing teams tasked to create leads. Sales teams are tasked to convert leads. Product teams are tasked to create the products or services that customers desire. This creates a silo approach that fails to see the big picture:
- The pressure to create a target number of leads often means that those leads are of poor quality. The result is poor sales.
- Poor-quality leads also creates poor information for product developers, with the result that product and service evolution fall short of what the market really wants.
- Though the more you put in at the top should lead to more sales, you constantly have to work harder to put more in at the top. This means more money, more effort, more strategies, and ultimately linear growth that matches the linear format of the sales funnel.
Loops challenge this concept. Loops create more output than input.
How do growth loops work?
Growth loops work because they help drive exponential growth by looping the output back to input, and by creating greater numbers of new inputs organically. Different types of loops work in their own ways, but each follows a logical approach:
i. Create great content that resonates with your target audience
ii. Provide incentives for people to share that content, and make sharing easy
iii. Convert visitors by offering value propositions (e.g. free eBooks, courses, surveys, etc.)
Here are four growth loops and how they work:
Viruses infect people and then force them to share with other people. Viral loops work similarly, and are designed to take you from zero to hero in a very short space of time. Each subsequent user shares the content you publish with numerous friends and contacts; and each of those contacts becomes a potential marketer for you. The key is to ensure that you provide an incredible piece of content, service or offer for your target audience.
You can promote sharing in a number of ways, including:
- Offering more for sharing (e.g. a free consultation when five friends sign up to your basic service)
- Providing a monetary incentive to get others to sign up
- Creating a social experience (for example, forums where users can help others and discuss problems and issues)
The paid loop is similar to the viral loop, except that the first step is to pay for visitors to visit your site. By then providing great content and value propositions, you encourage these visitors to share your content, therefore garnering more visitors organically. The steps are:
i. Pay for visitors (e.g. via pay-per-click advertising or Facebook ads)
ii. Provide great content and encourage visitors to sign up and share
iii. These new users transact on your site
iv. Rinse and repeat
An acquisition loop converts a new user into an active user, before encouraging the now active user to attract more new users.
When using acquisition loops, it is important to understand that external influences may affect how well they work. For example, if you are using Facebook as a publishing channel and Facebook changes how it shares your content with Facebook users, the results of your strategy will alter. A simple acquisition loop may work as follows:
- You post an article on LinkedIn
- This article gets ranked by search engines
- A web surfer finds your article (because they are searching for content)
- That surfer is prompted to sign up and share
A retention loop returns the user to your core product or service and results in a repeat use. Facebook is a classic example of how this works in four steps:
i. A trigger encourages an action; for example, someone comments on your Facebook post.
ii. The trigger is delivered to you via a channel; for example, email, SMS, or instant messenger, etc.
iii. You receive a reward – a ‘good feeling’ for replying to a comment.
iv. You act to gain the reward, perhaps replying to the comment left for you or adding a new comment. This action opens up new retention loops.
This model is also known as the ‘Hook Model’, and was developed by Nir Eyal. It works best when the reward is variable. For example, the user doesn’t know how many comments, shares or likes they will receive. This encourages more interaction to receive greater reward.
The benefits of growth loops
Employing growth loops in your content marketing strategy helps you to move away from thinking about your business in separate silos and consider the whole instead. This enables big picture strategizing – instead of considering the sale, you consider how to generate the content that encourages ‘word-of-mouth’ marketing. Thus, you utilize users and customers as marketers.
Additionally, as you delve deeper into employing loops in marketing strategy, you will discover that you can transfer users from one loop to another, thus adding more fuel to each loop strategy and within an overarching and sustainable strategy.
Do growth loops work for consultancies and niche businesses?
You may be thinking that loop strategies probably work best with established organizations, products and services. While it is true that large organizations use them to good effect, they work exceptionally well for businesses with niche products and services.
Growth loops are the gift that keep giving, providing you create content and offers that are specific to your product and service and relevant to your target audience. You will need to continually monitor, measure and manage your growth loops strategy to produce the best results.
With the right content and the right approach, you should find that growth loops provide the exponential growth in visitor numbers that enable you to convert to real customers and drive business success.
In answer to the question, “Do growth loops work for consultancies and niche businesses?”, there are some extremely high-profile examples that prove they do. For example, startups such as Facebook and LinkedIn began their lives by targeting small, niche segments. They are now huge companies with huge followings.
Have you found your content isn’t converting as expected? Tell us why in the comments.
What have you found to be your biggest challenge when starting to build your content marketing strategy? Get in touch, and we’ll help you find the solution: