In the startup world, the question ‘what’s the best performing channel to sell my product?’ isn’t a rare one. Whether you’re the founder or marketing and sales director, if you’ve got a great product it is inevitable you’ll be wondering what channel will work best for actually selling it.
Unfortunately, there is no single silver bullet. What I’ve found is that most businesses thrive by using a mix of channels, and before selecting the right one there’s quite some testing required. This can be time and budget consuming and therefore frustrating, especially when your business is under time pressure because cash is running low.
Here are four steps I recommend you follow to find your product’s very own channel mix. To demonstrate, I’ve used one of the products I have been responsible for as an example: a global Software-as-a-Service product for adults who want to learn English.
1. Know your target audience
Gather as much information as you can by doing research and talking to your customers and prospects about their demographics, behaviour and motivation.
For example, what we found was individuals who are willing to pay to learn English well and relatively quickly are mostly middle-income earners between 25 and 40 years old, living in urban areas. They use the social media platforms dominant in the country they live in (ie, Facebook in most countries, Wechat in China, etc.), mostly on their phone. They read news, commute to work by train or car; they may listen to the radio while they drive, watch the news on television, and so on.
To learn English, they attend English language classes in a centre near their house or their work. Their motivation to go there is because they want to connect with people internationally, they want to improve their career prospects or they want to travel or migrate to another country. They choose the centre based on convenience, price, quality and recommendations. They trust that the teachers in the centre know how they can learn English in the most effective and efficient way.
2. Match the proposition
Now you have a firm picture of who your target audience is, it’s time to define the problem they have, and how your solution solves it. Based on that, it becomes clearer how to create a message and highlight the product USPs in a way that will speak directly to your audience.
We identified a few problems adult English language learners have. Firstly, it is very hard to learn a new language. Secondly, they don’t have much time, and thirdly, their budget is limited.
The product offered a way of practicing English anytime, anywhere and showed the student the progress they were making.
3. Test and choose your channel
After researching your target audience, you might have an idea of some of the channels you need to be across to get in front of them. While it’s tempting to make assumptions and only go with one or two options, I have to stress the importance of running tests. You will figure out which channels work and which don’t, and often the results can be unexpected and enlightening. For the English language product, we tested many channels, including paid search, paid social, EDM’s and more.
Ultimately, we found the best channel was the teacher. Even though the student was paying for the product and the product could be used outside of class, the student was most inclined to buy it when a teacher recommended it. That brought us to our next challenge: how to reach the teacher.
4. Marry up your revenue target and budget
Lastly, as any smart startup founder will know, you’ll have a limited budget, and as such you need to make choices. You’ll need to calculate the resources and the media budget required to hit your target. As Penny Elmsie from Xero put it in my previous blog post: “Identifying the right channel for your product allows you to make the right investments, focus and create clear value.”
A simple formula to use for testing is: audience x message x channel. This is one of the examples we used to test with English language students:
● Audience: English language learners are time poor.
● Message: Save time by learning English on your way to work.
● Channel: Teachers handing out discount vouchers so they can follow the progress of their students outside of class.
On top of that, you need to look at the seasonality and allocate your budget accordingly. Test and reallocate your budget based on results. As everything in business, it’s an iterative process, so while there is no off-the-shelf silver bullet that will work for every product, by following these steps you can start forging your own.