Channel selection is one of the core parts of a go-to-market strategy. It goes without saying, but I’ll say it anyway, it’s also one of the most important decisions you need to make when building your business in the early days. It’s fundamental in how you’re going to sign-up customers and grow.
I’d love to tell you it’s easy, but alas, it’s not. With over 20 different growth channels to choose from and normally no first-hand data to make this decision, it often ends up being a logical best-guess based on where you think your audience is hanging out.
There are some key challenges early-stage startup founders face when building and executing on your go-to-market strategy, namely:
- A lack of data to make informed channel investment decisions
- Often budgets are limited
- A lack of growth expertise in the founding team to test the initial hypothesised strategy
Lucky for you, I build on average 10-15 go-to-market strategies per month for startups of all shapes and sizes. And over the last few years have helped build strategies for the likes of Oddbox, Startups.com, Weavr, Breezy and Addland. So, I’ve got some key lessons I want to share with you to overcome each of these challenges.
Challenge 1: Lack of Data
As a startup building your go-to-market strategy, you likely haven’t invested much in growth up to this point. If you have, make sure you’re leveraging the learnings you’ve had to date to determine which channels you should invest in. If you haven’t, I’d recommend trying to gather some information from 3 key areas:
- Talk to prospective customers to understand where they “hang out” and how they make buying decisions. Ask questions such as: What influences them? What do they look for when making a purchase?
- What do other companies do to target your prospective customer? What seems to be working for them?
- Utilise research tools to validate the opportunity in a channel (e.g., for Paid Search use Google’s Keyword Planner, for SEO use SEMrush, for Direct Outreach check prospect lead volumes on LinkedIn)
Once you have as much information as possible on who you are trying to target, where those people are ‘hanging out’ and what influences them in their buyer decision-making process, then it’s time to select your channels to market. To do this, I’d recommend using a framework called the Bullseye Framework.
The Bullseye Framework outlines the 20 different channels to market you can choose from. These channels range from paid, to organic, to content-based channels, to viral channels. Based on your research, I’d recommend thinking about each channel in turn and selecting between 4-6 channels you believe have the biggest potential to move the needle of growth for your business. It will form your initial, hypothesised channel strategy. For more information on the Bullseye Framework, see this article I wrote.
Challenge 2: Limited Budget
Whilst you’re going through the Bullseye Framework and considering which channels are going to be relevant ones to reach your audience, one of your primary considerations must be, “can I afford to invest in this channel and get a reasonable return?”
Every business will have a different growth budget that will enable or restrict investment in certain channels. If you’re uncertain what you need to be spending to hit your targets, or if you’re unsure what your budget should look like, look at this article.
My recommendation on overcoming this challenge when building your go-to-market strategy is to focus on more cost-effective, high impact channels when budgets are tight. But, of course, this is going to vary business by business.
But as an example, if you’re a B2B SaaS startup with a £2k/month budget, I’d start by selecting the high impact channels from the Bullseye then do some research into its viability. If, for example, you see Paid Search Ads as a potential channel, as you think prospects are googling for solutions to the problem you solve, then look into Keyword Planner. It might look something like this:
An estimated cost per click (CPC) of £3 and 1000 searches per month on your keywords. Seems reasonable. So let’s assume you get 5% of that traffic (50 clicks at £150 total cost). Then you have a 5% conversion on your landing page, that’s two conversions per month at £75.
For me, this little thought experiment validates this as a channel to market. I’d highly recommend bringing in a Paid Search Ad expert even to have a remote chance of achieving this, so you need to factor that into your budget. But that should fit in your £2k budget.
If Paid Ads are unaffordable, you might think about Direct Outreach and whether you can gather high-quality data for your prospective customers and reach out to them on LinkedIn and Email. To estimate results for this channel:
Let’s assume you can get 1000 lead data points per month with a 50% open rate (500), 10% reply rate (50) and a 20% interest rate (10). So then, your only costs are the management cost of the expert, the tools and the data. Round that up to £1500/month, and you have £150 per qualified lead.
For each channel, you consider, estimate your monthly cost for running and managing that channel, calculate your returns from the channel, then select the channels accordingly.
Challenge 3: Lack of Growth Expertise
Then finally, when you get to the execution part of the strategy, I often see startup founders trying to own the channel experiments, who more often than not aren’t channel experts. Or the founder employs a “generalist marketer” who isn’t channel-specific in their expertise, so they end up managing multiple channels. This founder-led approach and generalist-led approach leads to a lot of wasted marketing spending through poorly run growth experiments.
Of course, the choice to run channels in-house often comes back to the budget issue discussed above. However, I’d really encourage you in the growth budgeting phase to budget in bringing in a freelance channel expert to run the execution for you; they will execute more effectively and make the most of your budgets—if it’s a paid channel.
As I mentioned at the top of the article, it’s not easy building and executing a go-to-market strategy in the early days for startup founders. However, if there is one key takeaway from this, I want you to remember that your initial channel selection is merely hypothetical, based on best guesses and rough inputs. The proof—and growth—comes in the execution.
I hope I’ve given you some frameworks and ways of thinking to make that initial channel selection a little easier and your execution much more effective.
About the Author
Tristan has worked with over 50 startups in the last few years in a variety of capacities: as a founder, on the founding team, as a consultant or with his current growth marketing agency Growth Division. Growth Division helps startups find and validate channels to market through their community of growth experts and have worked with the likes of Startups.com, Seedlegals, Oddbox and Weavr. He also has recently started a coworking space in Budapest, where he now lives, called CoWork Division.
In this article, Tristan explores some of the common challenges a startup founder has when choosing their route to market. He gives tips on what startup founders need to think about when picking their marketing channels and what growth frameworks they can use to put this strategy into practice effectively.