How I use innovating and optimising = better marketing

• Innovation: diving into fresh projects that demand substantial time and energy, aiming for significant outcomes or potential results.

• Optimisation:  focuses on making small and gradual changes that accumulate over time, leading to modest yet growing outcomes or potential results.

Apply these approaches to 2 groups:

• Potential Customers: This includes leads, prospects, those on your email list, and new visitors to your website.

• Current Customers: This encompasses subscribers, first-time customers, returning customers, and users.

  
  

  This gives us two spectrums to compare with each other:

Let’s explore how these two spectrums are combined.
This is how you think more strategically and take a holistic approach to your growth strategy:

Section 1: Innovating for new customers.

This strategy involves creating new things for new customers and using both new and existing methods in the beginning. It's the key to long-term growth. To keep a business growing, it needs to keep coming up with new ideas for both its product and how it reaches customers.

This could mean trying out: different ways to advertise, adding new features, introducing new products, or entering new markets to attract new customers

A mistake people make: 

Focusing intensely on developing and distributing their product until they achieve success in areas like scale and profitability.

However, once they think they've found a winning formula, they often stop innovating. This can be problematic later on when:

a. Competitors outperform them.
b. Marketing channels become saturated, disrupted, or decline.

All of a sudden things aren’t really working anymore by taking the foot off of the gas pedal you can lose precious momentum which is hard to get back again. 

Ask yourself: 

• Which features are products are you building to attract new customers 

• Which channels are you experimenting with

• Which big new project are you exploring

• Which big new project

Tracking the efficiency of innovations for new customers is actually fairly straightforward. Look at:

• New traffic 

• New leads 

• New customers

Section 2: Optimising for new customers

Optimising for new customers is building incremental improvements for new customers in your product and marketing channels. Figuring out how to turn more visitors into leads or leads into customers and each step along that way.

You may be relying too heavily on optimisation, expecting a big result but optimisation is about getting small incremental wins, it’s rare that the optimisation will make a drastic improvement that will unlock growth for the business.

It compounds over time to make a material difference over the course of several months or a year. They’re not gonna have as much impact as an innovation.

It’s still very important, but they’re not the key to creating big wins, the purpose of an optimisation is to improve the efficiency of an innovation. You still need innovation before you can optimise.

• So which part of your funnel performs poorly?

• How many small improvements can you make?

Metrics to track for optimisation:

• Traffic to lead conversion rateLead to customer conversion rate

• Average order value /revenue per user 

Section 3: Innovating for new customers.

This is building new things for current or past customers and then distributing them in new or old ways. Most know that it’s a lot harder to acquire a new customer than is to retain an existing one.

Most are only focused on acquiring new customers and will do whatever it takes to get them but miss the current customers. Some stats:

• Acquiring new customers is 5x times as expensive as retaining an existing customer

• 44% of customers companies admit they have a greater focus on acquisition while 18% focus on retention and the rest claim to have an equal focus 

• Selling to a customer you already have has a 60 to 70% success rate

• Selling to a new customer is only 20% 

Source: investp

Innovating your current customer is a massively missed growth opportunity for most companies. You already have their trust, confidence, contact info and billing details. 

Just need to figure out how to keep being more valuable to them such as:

• New features

• Integrations and partnerships with other tools

• Revised pricing 

Generate more revenue from existing customers to offset rising acquisition costs.

By boosting customer lifetime value through expansion revenue, you can counterbalance increasing customer acquisition expenses.

This not only helps reduce the LTV to CAC ratio but also transforms churn into net negative churn.

The more upgrades and features your customers use, the more likely they are to stay loyal, as your products become increasingly valuable and integrated into their daily routines.

• What other complementary tools are your customers paying for that maybe you can replicate or build into your own product suite?

• What’s your current potential for expansion revenue like right now? 

A start to track for innovations for your current customer base in the way of growth is looking for:

• Expansion revenue 

• Reactivation revenue

• Customer acquisition cost

• User churn and net revenue churn

Section 4: Optimising for existing customers.

This is building incremental improvements for your current customers. Fit for products with 

• A large number of freemium users or leads 

• A large number of referrals or the main acquisition channels for you. 

• Can be sold with an inside sales team to a large number of customers

• You have a large customer base. 

Your creativity will be limited if you don’t have the volume to optimise for current customers. You need to have volume otherwise it will take too long to come to a conclusion.

• How can you get more freemium users to become paying users? 

• How can you increase the effectiveness of your referral program?

• Is there a new method or channel for upselling or upgrading customers?

  
  

  The metrics you want to track:

• Free to paid conversion rate

• Number of deals created 

• Deal to close rates

Putting this into practice:

The next time you brainstorm new campaign experiments or test drive growth -  try to plot it in one of these 4 categories and see where it fits

Figure out how you can diversify your growth strategy from just pure acquisition strategies to optimise for  a cohesive spread across the four quadrants 

TL;DR

Marketing involves more than acquiring new customers; it includes innovation and optimisation for both potential and current customers.

• Innovating for New Customers: Continuously create new ideas, features, or marketing methods to attract fresh customers.
  Metrics: Track new traffic, leads, and customers.

• Optimising for New Customers: Make incremental improvements in product and marketing channels for new customers, yielding small wins over time.
  Metrics: Track conversion rates and average order value.

• Innovating for Current Customers: Develop new offerings for existing customers, leveraging trust and information already available.
  Opportunities: New features, integrations, partnerships, revised pricing.
  Metrics: Track expansion and reactivation revenue, customer acquisition cost, and user churn.

• Optimising for Existing Customers: Make incremental improvements for current customers, suitable for products with a large user base, freemium users, or referrals.
  Opportunities: Improve freemium to paid conversion, referral program effectiveness, and upselling channels.
  Metrics: Track conversion rates and deal effectiveness.
  Practice: Categorise growth strategies into these four quadrants for a cohesive approach beyond pure acquisition.