I met Justin Mares the author of Traction a couple of years ago in Miami.
He was promoting his book at an event related to marketing for startups.
He was giving his book away and I was lucky enough to grab a copy.
The book sat on my pile of books for a couple of years and I only got to read it finally last week.
Some books come at the right time in your life and I feel this an important book that all marketers and business owners should read.
I’m very passionate about helping businesses grow and this book gives you a great foundation of the 19 different channels you can use to grow and scale any business.
The book interviews over 40 different founders and pulls experts related to the 19 different channels.
What is Traction?
The book defines it as the following:
“Traction is basically quantitative evidence of customer demand. So if you’re in enterprise software, [initial traction] may be two or three early customers who are paying a bit; if you’re in consumer software the bar might be as high as hundreds of thousands of users….It’s the Supreme Court definition of porn. You’ll know it when you see it.” -Naval Ravikant AngelList
To put it simply traction is growth.
Companies define growth in different ways.
For most companies growth is simply making more sales and acquiring more customers.
For others, this might mean more users.
Two of the main themes discovered in the book is that far too many businesses focus on the same channels and it’s hard to predict which channel will work best until you have tested it.
The BullsEye Framework
There are a lot of different distribution channels you can try.
It’s hard to know which will work best for your company or product.
This is why it’s important to have a framework that helps you test and measure each channel’s effectiveness.
Peter Theil puts it as the following:
“You probably won’t have a bunch of equally good distribution strategies. Engineers frequently fall victim to this because they do not understand distribution. Since they don’t know what works, and haven’t thought about it, they try some sales, BD, advertising, and viral marketing—everything but the kitchen sink.
That is a really bad idea. It is very likely that one channel is optimal. Most businesses actually get zero distribution channels to work. Poor distribution—not product—is the number one cause of failure. If you can get even a single distribution channel to work, you have great business. If you try for several but don’t nail one, you’re finished.
So it’s worth thinking really hard about finding the single best distribution channel.”
The authors define this strategy as the BullsEye Framework.
It’s called the BullsEye because you’re aiming for one channel that works the best.
Once you know which channel works the best you can then invest time and resources to it.
The BullsEye Framework is defined as the following:
- Brainstorm– At this stage you think of the best channels that might work the best for your business. It’s important not to dismiss any channel.
- Rank– At this stage you’ll rank which channels you think will work the best.
- Prioritize– Narrow down your channels into three different choices and start experimenting.
- Test– Run tests and make sure to answer the questions you are testing.
- Focus– Hopefully one channel works better than the rest. You can start focusing your efforts into this channel.
The 50% Rule
The 50% rule is simply defined on how startups should define their time.
50% should be devoted to product development while the other 50% is devoted to traction.
Founders should be using both strategies in conjunction.
The more users and customers you acquire the better your product will be with feedback, onboarding process, and you get to define your sales process.
19 Different Channels for Customer Acquisition
The book defines 19 different channels for customer acquisition.
Most marketers think of one or two channels that can help you acquire customers.
But, the fact there are 19 channels should make you think of the possibilities.
I have used most channels to grow my clients business but I am not familiar with all of them.
I’ll summarize each channel below:
Viral marketing is the process of getting your users to refer others to your product.
You’ve seen a lot of companies go viral.
Companies like Facebook, Uber, and Dropbox all have had explosive growth through referrals.
The authors define the referral process as viral loops.
A viral loop is defined as a three step process.
A user is exposed to your product.
That user tells a set of potential users about your product.
These potential users are exposed to your product and become users themselves.
Not many companies can go viral.
The best way to do this is to give users the incentive to collaborate with others.
Almost every new tech company has this feature of “inviting others/friends.”
To read more about viral marketing check out the posts below:
- Viral Marketing Cheatsheet
- 5 Key Viral Marketing Tactics that Work
- 7 Steps to Create a Viral Marketing Campaign
PR is the art of getting your name out there via traditional media channels like newspapers, magazines, and television.
How the Media Works
The media has changed.
It’s driven by clickthrough rates and eyeballs.
Ryan Holiday from Trust Me I’m Lying gave the following description:
“The news has fundamentally changed. Think of The New York Times. When they decided to publish an article about you, they are doing you a huge favor. After all, there are so many other people they could write about.
There are a finite number of spots in the paper. Blogs are different, as they can publish an infinite number of articles and every article they publish is a chance for more traffic (which means more money in their pockets).
In other words, when Business Insider writes about you, you are doing them the favor.” -Ryan Holiday
How to Pitch for PR
You should first understand that editors get pitched at least 50 times a day.
If you are doing the direct route you have to make sure your pitch stands out.
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This means doing something exceptional with PR.
There are two types of unconventional PR: the publicity stunt and customer appreciation.
One of the most famous PR examples was Felix Baumgartner’s space jump in 2012.
This event was sponsored by Redbull and drew millions of viewers to watch a man jump from space.
This type of event can help propel your company from anonymity to national recognition overnight.
Another more sustainable type of unconventional PR is going above and beyond in serving your customers.
You can do this easily with the following:
- Free book giveaways.
- Handwritten Letters.
- Birthday specials.
- Contests Giveaways.
If you want to learn more about Unconventional PR check out the resources site the authors’ put together here.
Search Engine Marketing (SEM)
Search Engine Marketing also known as PPC (pay per click) involves placing ads on search engines like Google, Bing, and Yahoo.
SEM is one of the fastest and most predictable ways to acquire new customers.
PPC allows you to target people that are actively looking for solutions.
The authors interviewed Matthew Monahan CEO of Inflection a company that was spending at one point over $100,000 per month on SEM:
“One the things I really want to emphasize here is just how compelling SEM is as a way to get early customer data in a fairly controlled, predictable manner. So even if you don’t expect to be profitable, you can decide to spend $5,000 ($1,000, or $500) on an advertising campaign and get an early base of customers and users.”
Running a Campaign
The basic strategy of running a campaign are to search for high potential keywords.
You then group them into different ad groups, test the ad copy, test the landing page, and use the data to learn and optimize.
Re-marketing allows you to target people interested in your products/services with display ads across the internet.
Re-marketing ads have 3-10 times higher CTR (click-through rates).
If you want to learn more about SEM/PPC check out the following guides below:
- The Ultimate Guide to PPC
- Pay-Per-Click Marketing: Using PPC to Build Your Business
- The Noob Guide to Understanding Pay-Per-Click Marketing
Social & Display Ads
The authors group two types of advertising into one chapter.
Social Ads, which have become the second biggest online marketing channel behind PPC, include:
- Facebook Advertising.
- Twitter Ads.
This includes running advertising on display networks.
Display networks are a network of sites that aggregate advertising.
These networks include Google Display Network, Yahoo Gemini, Taboola, Outbrain, and Gravity.
This is also known as native advertising.
The ad looks like a news article and follows the natural of function of the user experience on where the article is placed.
Facebook Advertising is the king here.
There are now over 3 million advertisers on Facebook and close to two million businesses advertising on Facebook.
Facebook represents the cheapest way to build brand awareness and generate leads for any type of business.
The main difference between SEM and Social Display Ads as told by Nikhil Sethi, CEO of Adaptly:
“In the social context, what we’re talking about is ‘indirect response.’ You’re still focused on a sale, an install, a signup, or whatever, but the methodology to get there is different.
Instead of looking at every click and how it converts, indirect response says ‘let’s’ create an environment within the social context that’s geared toward the specific product or service you’re trying to offer, build affinity there, build loyalty there, and then migrate that audience toward some conversion element we want to occur at a later point in time.”
People visit social media sites to be entertained and catch up with old friends.
They are not there to see ads and buy stuff.
Remember this key difference and you’ll be a lot more successful in your advertising.
Even with the growing popularity of online advertising most businesses still spend more money on offline ads also known as traditional advertising.
These ads include TV, radio, magazines, yellow pages, and newspapers.
The same principles that apply online also apply offline as well.
The basics include:
Direct mail has the second highest ROI behind email marketing.
Cost per order or lead for acquisition campaigns stood at $51.40 for direct mail, slightly less than for paid search ($52.58), postcard ($54.10), and email ($55.24)
You can buy lists of every type of demographic imaginable.
A few good resources that will help you compile lists are the following:
Even though the world is moving towards digital offline advertising can be very effective.
The authors summarize offline advertising below:
“The best way to approach this channel is to understand that there is no guaranteed way to predict what will work. But, if you keep at it, you may end up with an effective offline advertising strategy.”
Search Engine Optimization (SEO)
SEO is the process of improving your online presence to rank higher on search engines.
There are over 3.5 billion searches a day on Google.
Rand Fishkin the founder of Moz summarizes SEO with the following:
“At its base, SEO is starting with a content strategy and finding a way to attract relevant visitors through search engines. You have to intelligently design this kind of [content] and make sure search engines can find and rank that content.”
Two SEO Strategies: Fat Head and Long-Tail
Moz illustrates these two strategies with their search demand curve:
Your company should determine which strategy will work best in the beginning.
If you find that after doing the research that the keywords are very competitive in your market you should try a long-tail keyword strategy.
Long Tail Keyword Strategy
This involves targeting keywords that are three or four phrases and are very specific.
Usually, when someone types this on a search engine they are exactly for what you are selling.
To read more on this strategy check out the following posts below:
- Long Tail Keywords
- A Step by Step Guide to Integrating Long-Tail Keywords Within Blog Posts
- Why Focus on Long Tail Keywords?
I’ve written about the power of content marketing before here.
It’s one of the most powerful and effective ways to generate new business.
Over 70% of CMO’s think content marketing is the future of marketing.
In the book, they interview two founders who used content marketing to grow their business.
How OkCupid Used Content Marketing to Grow their business:
“They intentionally wrote controversial posts (e.g. How Your Race Affects The Messages You Get) to generate traffic and conversation. Each of their posts took a month to write and drew on the data they had from studying the usage patterns of their members.”
Unbounce is landing page SAAS company that targets online marketers.
They made their first hire a full-time blogger.
They knew their target audience were very active online and a blog would be the perfect way to reach them.
“If we had not started blogging at the beginning the way we did , Unbounce would not be here today…Our content still drives customers. Something we wrote in January 2010 still drives customers today.”- Rick Perreault Unbounce
Now, our blog is our primary source of customer acquisition. People write about Unbounce. Other people tweet about our posts…Our blog is the centerpiece of all of our marketing.”
The biggest challenge that content marketers have is producing engaging content.
One of the best ways to overcome this is to write about your customer’s problems and challenges.
It’s not a panacea for your content but it’s a start.
One thing the authors fail to mention is video content marketing.
When the book was written online, video wasn’t as popular as it is today.
People are now consuming videos more than ever before.
You can grow your blog with videos and it’s usually easier to rank for keywords.
I’ve mentioned it many times before but email marketing has the highest ROI of any online marketing channel.
It’s not sexy or new but it works.
Email marketing has 4,300% return on investment.
In the book, they interviewed Colin Nederkoorn, the founder of Customer.io who shared his thoughts:
“If you’re running a real business, [email] is still the most effective way to universally reach people who have expressed interest in your product or site. For that, it really can’t be beat.”
Email marketing can be used all stages of the buyer’s journey.
It’s also very inexpensive to get started.
You can scrape a list of prospects and start emailing them with relevant information.
“Email can be used at all stages of the customer life-cycle: to acquire customers, build familiarity with prospects, move customers through your funnel, and retain the customers you already have.”
If you want to learn more about email marketing I’ve compiled a list of posts you can read:
- A Beginner’s Guide to Successful Email Marketing
- The Ultimate Guide To Successful Email Marketing
- The Beginner’s Guide to Email Marketing
Engineering as Marketing
This is a special type of lead magnet that many companies have used to scale their business.
Lead magnets like calculators, widgets, free software, and educational micro-sites, are used to generate leads.
In the chapter, they used Hubspot and RJ Metrics as examples.
HubSpot has a free tool on their site called Website Grader.
This tool evaluates your site based on the following metrics:
In order to get my result, I have to enter my email address.
This lead magnet works better than anything because of the value that it provides.
Dharmesh Shah founder of HubSpot talks about the website grader:
“One of the initial steps in the sales process was for me to get a sense for how good a given company’s website was at inbound marketing.”
“I built an application to automate that process for me. Once the app was built, I thought it might be useful for other people, so I registered “websitegrader.com” and the made the app available publicly. We eventually started collecting email addresses in the app, and kept iterating on it.”
There are a lot of different companies that are doing this now.
Quicksprout, WP Engine, and others have free tools on their sites used as lead generation.
“I think of free tools as content (albeit, interactive content). At Hubspot, we really believe in marketing channels that have high leverage (i.e. write it or build it once- and get value forever). As such, we take a very geeky and analytical approach to marketing. We think of each piece of content as a marketing asset.”
This is one of the channels that doesn’t scale as well as the others but it can be very effective in getting your first customers.
In this chapter, the authors interviewed Noah Kagan who grew Mint.com to more than 20,000 users before its launch.
Case Study: Mint
Mint’s growth was very impressive.
Two years after their launch, they had over 1.5 million users.
Noah Kagan targeted high traffic blogs that were relevant to his audience.
“To test blogs, he contacted a few that were representative of different customer segments, and got them to write articles about Mint.”
“Noah then created a long list of blogs to target, and set about contacting those blogs about guest posts, coverage, and placing Mint badges on their sites. Through this focusing process, Noah uncovered tactics that further improved traction through this channel: VIP access and sponsoring.”
To learn more on using this strategy check out the posts below:
Business Development (BD)
Business development is similar to sales but with a focus on exchanging value through partnerships.
A lot of marketing consultants and agencies partner together to form strategic alliances that benefit both parties.
Here are a few of the partnerships covered in the book:
- Standard Partnerships.
- Joint Ventures.
- Distribution Deals.
- Supply Partners.
Pick the right partners.
“You need to understand why a potential partner should want to work with you. What are their incentives? Just as you evaluate potential partnerships in terms of your core metrics, they will be doing the same. You should also seek out forward-thinking partners.”
Charlie O’Donnell, partner at VC firm Brooklyn Bridge Ventures suggests maintaining a large list of partners:
“Create an exhaustive list of all your possible [partners]. Don’t ever list Conde’ Nast without listing very single publisher you can think of. Make a very simple spreadsheet: Company, Partner Type (Publisher, Carrier, Reseller, etc) Contact person/email, size, relevance, ease of use, and then a subjective priority score. That list should be exhaustive.”
Selling is the process of generating leads, qualifying them, and converting them into clients/customers.
Depending on the type of product or service, you’ll most likely need a sales channel.
Selling is the most important skill you’ll ever learn in business.
Whether you are a lawyer or an entrepreneur sales is an essential business skill.
The best way to scale this model is to have a repeatable sales process.
This means that everything from sales scripts to qualifying questions needs to be tested and measured to maximize results.
This is a huge topic that I won’t be able to cover here but here are some recommended books that will help you get started:
- The Ultimate Sales Machine by Chet Holmes
- SPIN Selling by Neil Rackham
- Insight Selling: Surprising Research on What Sales Winners Do Differently
Affiliate marketing programs are partnerships where you pay people or companies for performing certain actions usually on a website.
You can pay people to perform on a cost per lead, per sale, cost per action etc.
There are several types of affiliate programs which include:
- Retail Partnerships.
- Information products.
- Lead Generation.
There are a lot of different strategies you can use to join affiliate programs depending on what your goals are.
If you want to sell more products/services you can reach out to relevant companies that have a lot of customers and offer to pay a commission based on each sale they refer.
You can also join affiliate networks like Commission Junction and Clickbank and start recruiting affiliates.
If you have a large audience and want to start selling products you believe in, you can join affiliate networks.
Alternatively you can reach out directly to the company selling the product to form a partnership.
To learn more about affiliate marketing check out the posts below:
- Affiliate Marketing for Beginners – The Ultimate Guide
- Welcome to the Affiliate Marketing Step by Step Guide
One of the best traction channels for tech companies is to leverage existing platforms to grow your customer base.
Case Study: Evernote
The authors interviewed Alex Pachikov one of the founders of Evernote.
“Every year there’s a new platform, new device, new something, as somebody who’s starting a company you should consider if there’s something really cool you can do on an upcoming platform. Now obviously you can’t plan if a platform is going to be successful, but you can [make some] reasonable guesses based on past experiences with a company.”
To learn more about using this channel to scale your business check out the posts below:
Trade shows the biggest marketing expense for most companies.
Over 39% of marketing budgets are spent on trade shows.
Trade shows can be a great way to increase demands for your products, sleuth the competition, and pursue partnerships.
“The best way to decide whether to attend an event is to visit as a guest and do a walk-through the year before.”
How to make your trade show experience success:
- Be Prepared.
- Set up meetings before the trade show.
- Have an automated follow-up sequence.
- Qualify your opportunities.
- Have an impressive display that states clearly what you do.
- Have an outbound strategy.
- Have a CTA on your business card.
The authors put together a great resource guide on trade shows check it out here
Sponsoring events and running offline events can be a great way to get traction.
You can attend conferences, create your own conference, attend meetups, and even have parties to get more customers.
Conferences are the by far the most popular type of event.
Similar to the trade show example, you can set up meetings with people and engage the speakers at the events.
The more you interact and network, the higher chances you have developing potential opportunities.
To learn more about this channel check out the posts below:
- How to get the most out of conferences
- Beginner’s Guide to Attending Conferences
- 6 Successful SXSW Startup Launch Stories
One of the best ways to build authority and credibility is to speak at events.
Going to trade shows and conferences is a great way to gain traction but speaking at these events takes it to a higher level.
Dan Martell, the founder of Clarity spoke about getting traction through speaking engagements:
“Speaking is funny. You know to me, it’s the old school concept that teaching sells…Teaching is what content marketing is all about: webinars, blog posts, and the like. I look at [these] things as the future of good marketing. The opportunity to teach and be in front of a room for 45 minutes introducing your company and your story to potential customers is time well spent.”
Steve Barsh, former CEO of PackLate gives great advice on pitching talks to events:
“Rather than pitch them directly on what he wants to talk about, he contacts them and asks them about the ideal topics they want to have speakers cover at an event. Once know, he then crafts the perfect pitch: one that hits on key points the organizers want to cover.”
Building Your Speaking Reputation
Dan Martell on building your speaking reputation:
“To become a speaker you have to speak once. If you speak and you’re good, people in the audience will ask you to speak at other events. That’s just how it happens. I’ve never marketed myself as a speaker; it’s not in my bio or anything. What happens is, you speak at a conference, people see it or talk about it, and you get invited to other ones.”
If you are not an experienced speaker you should check out your local Toastmasters and join.
If you want to learn more the authors’ speaking engagement resources is here
The beautiful thing about the internet is that it allows people who share common interests to join a community.
Community building is a great way to gain traction and raving fans who love and support your company.
“Community building involves investing in the connections among your users, fostering those relationships and helping them bring more people into your startup’s circle.”
How to Build a Community
The authors interviewed Chris McCann from Startup Digest on he build a community of entrepreneurs:
“Chris McCann started Startup Digest by emailing twenty-two friends in the Bay Area about local tech events. As the list grew, Chris started giving twenty-second Startup Digest pitches at events he attended. His pitches proved effective: membership grew into the low thousands in a matter of months. Today, there are over 250,000 members of the Startup Digest community, and it all started with those 22 friends.”
The best thing about building a community is that it allows you to build assets.
Assets can be your audience, your email list, and the data you’ve collected.
This data can be extremely valuable and be used to sell your products and services.
The types of companies that will benefit with community building is summarized by Chris McCann:
“There are some businesses that lend themselves to doing this very well. Companies whose core function is the connecting of people are best set up to take advantage of a community. Whether that’s a trade show thing, an investment thing, whatever; when a company’s underlying value is in bringing people together, and where people matter in the system, that’s where this community stuff can really take off.”
Whatever stage you are in your business this book can help you.
The book covers almost every channel you can use for growth.
Most companies only focus on one or two channels.
This is a big mistake.
Almost every channel can be effective depending on the type of business.
It’s important to test different channels and see which works best for your company.
You might be surprised.
Check out the infographic below: