How Startups Can Grow More Efficiently

Sam Martin-Ross
Sustainable Growth
Sustainable Growth

Recent years have seen a huge upsurge in the number of start-ups operating at a loss in order to grow fast. The Wall Street Journal reported that for the first time ever over 80% of IPOs in the US last year were for money-losing companies.

When managed effectively, this can be a successful long-term strategy, however the cost-per-acquisition will play a significant role in the success. This often makes reducing the CPA, getting growth more efficient, a focal point of any start-up.

As it should be for any startup or challenger brand, whether profitable or not, having aspirations to overtake market leaders or disrupt industries will be easier and faster to achieve with more efficient growth.

Given this, here are four ways how startups & challengers can grow more efficiently;

1. Connect with customers, and improve

Fostering a strong connection with existing customers is crucial for challenger brands. Jeff Bezos summarised the importance of this on growth back in 2010;

“You used to be able to win with a mediocre product, if you were a good enough marketer. That is getting harder to do… if I build a great product or service, my customers will tell each other”

On top of that, customers provide valuable feedback for product development that if implemented will make future customers happier, and get them spreading the word too.

Ahrefs, our favourite SEO tool, is a great example of this. They have never taken funding and now have over ~$40m in annual recurring revenue, with over 65% YoY growth, two years in a row. They put this almost entirely down to creating a ‘must have’ product.

Thankfully it’s now easier to connect with customers than it ever has been before, with email and social media. These channels have the added benefit of creating brand awareness however for growth, their primary function should be to connect with customers for product improvements.

2. Make paid search and social efficient

When used efficiently, these channels can be hugely beneficial in accelerating growth.

In order to make them more efficient sales cycles need to be considered in strategy. Channels, targeting, messaging and their different combinations need to be decided on based on where they sit in the cycle to have maximum impact on growth.

For example, with a longer sales cycles it can make sense to have remarketing on a low frequency (let’s say two impressions per user per week) for a longer than average time frame (say 90 days plus) in order to have important messaging seen during it.

Then ensuring the right KPIs are in place for the right campaigns allows you to better optimise over time and move budget to higher performing areas while cutting waste.

Consider each campaign’s goal when deciding KPIs. For example, awareness based campaigns could look at reach and brand search volume, whereas conversion focused campaigns tend to look at revenue linked to customers through CRMs.

3. Use SEO for ‘free’ growth

Organic traffic has the same intention behind it as paid search. This means it has similar conversion rates, the main difference is however that no one pays Google for it, it’s free.

That’s not to say it’s easy, it takes hard work and time to rank highly for competitive keywords. When we think about the resources required to get there, it’s far from free.

On the other hand, the size of prize is bigger. According to Sparktoro, Organic takes ~40% of search traffic, compared to paid search’s 3%.  

Given this share of traffic, it needs to be considered early on and the right keywords need to be chosen. The key to making SEO efficiently drive growth is being certain your chosen keywords will drive growth.

4. Lastly, be ready for growth

Brands making their digital more efficient will see growth in sales. So, the whole team needs to be ready. Make sure you’ve got the right CRM and sales systems in place, along with an expert team that’s ready to manage a growing business. Nobody wants a leaky bucket.