GrowthPad

“If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.” – Jeff Bezos

Ah, the wise words of Bezos. Imagine the chaos of 6,000 disgruntled customers wielding their keyboards like pitchforks. But fret not! We’re diving into the wild world of subscription acquisition channels to ensure that your service never faces such a digital mob.

Acquisition Channels: A Primer

Before we start fishing for new subscribers, let’s make sure our subscription boat isn’t leaking. Yes, services need to first understand their subscriber churn profiles and lifetime value (LTV) before obsessing over member acquisition. Think of it as patching the holes before setting sail.

Retention Over Acquisition: The Golden Rule

Investing in retention is like eating your vegetables; it’s not flashy, but it pays off in the long run. If your service isn’t optimized for retention, engagement, and monetization, you’re essentially pouring new members into a very leaky bucket. So, fix that bucket before you drown in churn!

For services plagued by significant churn, over-investing in acquisition will lead to business failure faster than you can say, “Oops!” Focus on getting your house in order first.

Understanding the Various Channels

Now, let’s break down the acquisition channels into three main categories: Build, Buy, and Partner.

1. Build

Sales Channels

Imagine a group of highly trained sales ninjas. They’re expensive but oh-so-effective. Ideal for high LTV services. Example companies: GoDaddy, Palantir, Salesforce.

Referral Program

Ah, the classic “bring a friend” trick. This channel leverages your existing members to bring in new ones, often incentivized. Example companies: Dropbox, Robinhood. But beware of gaming and abuse – no one likes a referral loophole abuser.

Viral Loops/Network Effects

This is where things get spicy. For services that get better with more users, like Slack or Invision, viral loops can supercharge growth. Cost-effective and powerful, just like your mom’s secret chili recipe.

Content Marketing & SEO

Billions of searches daily mean high-quality content (aka content marketing) with SEO can drive traffic like a charm. Think Yelp and Glassdoor. Cost-effective and less likely to burn a hole in your pocket.

2. Buy

When in doubt, throw money at the problem! Paid acquisition is the bread and butter of growth for most subscription services.

Digital Ads

From social messaging ads to search ads, this channel is all about targeting, costs, and outsmarting Google’s ranking algorithm. Example companies: Supercell, Blue Apron, FreshDirect.

TV Media and Out of Home

Traditional media isn’t dead – it’s just napping. TV, radio, and out-of-home (OOH) channels are great if your audience isn’t glued to their smartphones. Example companies: HBO, Apple Music, Spotify.

Email

Ah, email – the trusty steed of digital marketing. Cheap, effective, but watch out for those pesky deliverability issues. Example companies: Subscription video and music services.

3. Partner

The “let’s hold hands and grow together” strategy. Partnering with other companies can open up new worlds of growth and retention opportunities.

Bundling

Bundling is like the Swiss Army knife of partnerships. It’s seen considerable growth with services like Spotify bundling with Hulu/Showtime or Verizon bundling with Disney+. Dive into this strategy with a fantastic post entitled, The Four Myths of Bundling.

Key Takeaways

1. Focus on scaling acquisition channels once you’re confident in your service’s retention.
2. Measure the LTV of your service and decide on your growth investment wisely.
3. Log and analyze your acquisition channel data to understand effectiveness.
4. Test, measure, and optimize channels continuously.
5. Monitor the effectiveness and keep testing new channels.
6. Aim for a low-cost and highly scalable acquisition channel, like word-of-mouth (WoM).

Cautionary Tale: Growth Obsessed Cultures

Remember the tale of Match.com? The FTC slapped them with a lawsuit for using fake messages to lure users. Growth is crucial, but not at the cost of user trust and experience. Read more about it here.

So there you have it, folks. Dive into acquisition channels with a strategy, a sense of humor, and a commitment to keeping your subscribers happy. Because remember, an unhappy subscriber today could be an Internet nightmare tomorrow. Happy acquiring!