It was 2008, and I was having a classic founder moment. I had no idea what I was doing.
But at least I was doing! I was founding a SaaS business, KISSmetrics. Like any startup, we were flailing, failing, and on fire, all at the same time. It was a wild, insane, and ridiculously exhausting experience. I was in charge of product development, operations, finance, funding, and probably 44 other things. At that point in 2009, I was also responsible for marketing.
That leads me to what this story is about: How KISSmetrics became one of the most popular online marketing brands on the Internet. I’m confident that this story can help you. It’s a success story, but it’s also a story of struggle. Most importantly, it provides a framework that any startup can follow.
I wrote this article primarily for founders like myself. When you’re in the earliest stages of your business, you need to answer these three big questions about marketing:
- How do you identify your target audience?
- Where can you find them?
- How do you engage them?
This article will also be useful for business leaders who want to find a new marketing channel, target a new customer segment, or launch a new product for a fresh audience.
The process that we developed at KISSmetrics is the same process that any company can use to achieve a powerful marketing approach from the very beginning.
Where it all began: The Founding of KISSmetrics
KISSmetrics is a marketing analytics platform that helps companies improve conversions and drive growth. We launched it in 2009 with a pretty good idea, a strong product, and a vague plan for growth.
Like most startups, we didn’t have much runway early on, so we had to tackle these three key marketing questions quickly. We were fortunate enough to achieve success. Some things were wild, rapid, and out of our control. For the most part, however, our growth was intentional and scalable.
The experience was a combination of raw excitement mixed with sporadic confusion. (And a few too many all-nighters.) We started where every startup does: zero customers, a fledgling product, and a tiny team. Our biggest need was customers — customers who wanted to give us their money.
But who were these customers? Where would they come from? How could we find them? Why would they listen to us? What did they really want? What would make them buy our products? Basically, we needed to answer the basic marketing questions. Without a foundation, we couldn’t sell our product.
SaaS Marketing Step 1: Who is your target customer?
We developed KISSmetrics with a nascent idea of the user. We assumed that the product would be useful to people like, well…like us! We were techy, geeky, and interested in startups. But here was the challenge. We didn’t have a clear picture of the target customer. Sure, we had an audience in mind, but knew we had to get more specific to determine our marketing channel.
It was Tuesday morning. My big, hairy, audacious goal for the week was to get our marketing figured out. The first thing I did was lead a team meeting via Skype. (Our team was remote.) We had one agenda item: Figure out who the heck was going to buy the product we were developing. I jotted down our task, “Identify target customer” in my email to the team. Next to the task, I wrote “Deadline: Wednesday.”
“Who is our target customer?” Even though we believed that we were our own target customer, we wanted more clarity. To get this clarity, we had three options:
Option 1: Test our own traffic and analytics
Option 2: Go with our assumptions
Option 3: Identify the problem that our product solves
How about Option 1? We knew the value of analytics in providing answers. After all, we were developing a product that did just that — help companies use analytics to take action. Unfortunately, this option had a serious drawback: We didn’t have any analytics. Our site was new. we had very little content, and our traffic lacked numerical validity. There was no way we could produce actionable information from our tiny numbers.
We scratched Option 1 from the list.
Option 2 seemed easy and promising. We thought we knew who would use our product. Why not just pick that demographic and roll with it? Our assumptions were safe enough, right? When we put it under the microscope, Option 2 had some big mistakes. First, building a business on assumptions is sheer stupidity. And second, our assumptions weren’t specific enough.
What could we do? We circled back to the entire purpose for the product: it solved a problem.
We began using Google to search for keywords that our analytics product dealt with — traffic, pageviews, channels, funnels, and user segmentation. Obviously, Google couldn’t answer our question directly, but it functioned as a brainstorming aid.
The answer emerged. Internet marketers were looking for answers and clarity around web analytics. Our product solved a problem for agencies and in-house marketers. These people wrangled with metrics, spent hours configuring Google Analytics, and pivoted Excel spreadsheets all day long.
These marketers had a problem: They craved accurate and actionable metrics. Our product solved this problem. But, we had begun to answer the question. Our target customer consisted of marketing agencies and other online marketers.
SaaS Marketing Step 2: Where do they hang out?
By Tuesday afternoon, we had answered our first question. Emails were flying back and forth, Skype was hot with chats, and our internal wiki was erupting with new documents. During our Wednesday morning Skype meeting, I declared a victory over our first task: Target customer = Internet marketer.
Our target customer had an analytics problem. Our product solved this problem. Aaaand…..Bingo! We knew who to go after.
The problem? We didn’t know where to find these people. We had a new task: Figure out where Internet marketers hang out.
To answer this question, I popped open a new Excel spreadsheet, and made a list of all of the potential channels. Let the brainstorming begin! The team pinged me with potential sites and platforms while I created new rows in the spreadsheet.
We identified a lot of Internet locales that seemed like promising hangouts for marketers. Here’s a quick sampling of the short list that emerged from the longer Excel spreadsheet (these were the pre-Instagram and pre-Google+ days of the Internet):
- Google (using Adwords)
We were looking for online platforms where marketers connected professionally. But we wanted more than a hangout. We also needed a marketing channel. After all, it doesn’t work to show up in a place and shout, “Hey, give us your money!” Instead, we needed to identify a place of opportunity — an opportunity for us to listen, learn, and give value.
Here were the criteria we established for vetting viable marketing channels:
In order for the platform to be successful, there needed to be give and take. We needed to engage with potential customers, and they needed to be able to engage with us. This nudged us towards a platform with a social angle.
Back in 2008, “content marketing” wasn’t a thing. According to Google Trends, the term didn’t become a hot search item until 2011. (We founded KISSmetrics in 2008.)
The idea behind content marketing is giving value, ideally for free. That’s what we wanted to do with KISSmetrics. Our tool was designed to provide actionable metrics. Our marketing, then, needed to be valuable for marketers.
3. High Positive ROI
Most of the time, getting a high ROI requires spending little money. Usually, organic platforms require more time than money, and we were okay with that. As an early stage startup, we were cheap and scrappy.
As it was, analytics incumbents like Omniture were dominating paid search. For us to bid on relevant AdWords, we would have to spend more than $10 to get a single click! That wasn’t an option for us. We ruled out all contending marketing channels that required us to invest a large amount of cash upfront.
If you want your business to be scalable, your marketing has to be scalable, too. In fact, marketing scalability should be a primary consideration when considering business scalability as a whole.
Marketing scalability should be a primary consideration when considering business scalability as a whole.
These four criteria helped us narrow down our list. We considered each channel, and asked: Is this interactive? Can we provide valuable content? As we worked through our list, one option had high marks for all four criteria:
- It was interactive
- It was focused on content
- It was free to join and use
- It was scalable, and growing at a rapid pace
What was this option?
It was Twitter. And it looked like this:
Don’t judge. It was 2008!
Twitter was a growing and active community of marketers. Once we identified the platform, our work had only just begun. Next, we had to learn how to engage them, which required becoming familiar with the mechanisms of the platform.
SaaS Marketing Step 3: How do you engage with them?
We had one weekday left to figure out Twitter and devise a method of engaging with our audience. We started our Skype meeting, and scoped the next big task: Figure out how to engage on Twitter.
A lot of people assume that KISSmetrics grew an audience through our blog. That’s not the case. Back in the day, we didn’t even have a blog! All we had was a free Twitter account, @Kissmetrics.
Twitter in 2008 was pretty limited. But something was becoming popular: hashtags. Hashtags were less than a year old by the time we started using Twitter. The first Twitter hashtag was used by Chris Messina in 2007. Here’s what he wrote:
how do you feel about using # (pound) for groups. As in #barcamp [msg]?
— Chris Messina 🦅 (@chrismessina) August 23, 2007
Kind of bland, right?
Hashtags blew up after that. Navigating the hashtag world on Twitter was clunky at first. Twitter didn’t begin to hyperlink the hashtags in search results until mid 2009. But we saw an opportunity. Marketers are usually early adopters, eagerly using hashtags. We started following marketers on Twitter and making a list of the hashtags that they used.
#WeFollow was one of the earliest hashtags to gain popularity. We discovered that by using this hashtag, we could easily gain new followers who were marketers. Another notable hashtag was #measure. This synced perfectly with our product. KISSmetrics was an analytics platform for measuring. So we jumped on #measure, too.
Remember, we didn’t have any content of our own at this point. No blog means no Twitter fodder, right?
We knew we could curate content from other sources. Sharing other marketers’ content was the perfect way to spread goodwill, promote great content, and build our own Twitter audience. We began tweeting useful marketing and analytics content, and tagging each tweet with #measure.
Twitter was free. The content was free. Hashtags were free. This was our recipe for engagement, and it worked!
Our Twitter audience grew gradually. Then, it grew rapidly. Eventually, our own site was booming with referral traffic from Twitter.
In the heat of the moment, the process felt haphazard, rapid, and non-sequential. Remember, we were trying to hack Twitter for engagement in a single day. But in hindsight, we created a workable process:
1. Identify underused opportunities in the selected platform.
Hashtags were the key to our early success on Twitter, and they were growing in popularity. Today, the hashtag strategy alone wouldn’t work to attract customers. Obviously, any savvy marketer will use hashtags as part of his or her marketing efforts, but it’s hard to capture a target customer simply by using a simple hashtag like #measure.
When looking for opportunities, it’s tempting to drive straight towards a discrete tactic, such as content marketing, or Instagram, or Conversion Rate Optimization (CRO). Obviously, tactics are necessary—but everyone is already using these tactics. Instead, you need to identify emergent trends within those tactics to engage with your target audience.
The classic example of a company that employed this method of growth hacking is Airbnb. They knew that their target audience was searching on Craigslist, so they hacked Craigslist to promote their listings.
Snapchat is another example. They identified their target audience in the high school demographic. They located popular students in high schools, gave them the app, and incentivized the cool kids to share the app with others.
These examples show successful companies whose marketing wasn’t tactic based, but focused on advanced methods within a tactic. For Airbnb, it was referral traffic from Craigslist. For Snapchat, it was word of mouth within high schools.
Marketing methods change and expand. Today, KISSmetrics is primarily driven by organic traffic from the blog, not Twitter. In addition, we’ve implemented a broad range of marketing methods across a variety of different marketing channels.
I recommend finding one method that works, and focusing on a single channel at a time.
We were trying to hack Twitter for engagement in a single day.
2. Take ownership of this opportunity.
Once you’ve settled on the underused opportunity, it’s yours to own. Our early Twitter efforts were focused on dominating a hashtag.
3. Focus only on the users that matter.
Most likely, your marketing channel will have thousands if not millions of active users. It’s tempting to inflate your follower count by adding anyone and everyone on the network. (Or — may the marketing gods smite you — buying followers!)
This is a mistake. The only followers that matter are those who want to engage with you. Anyone else is a waste of your time.
4. Dish out massive doses of value. Expect nothing in return.
Your primary task on the channel you select should be to give your audience tons of value. When we engaged on Twitter, we didn’t know how, or even if, users would follow us or click our links. What we did know was that if we focused on providing value to our target audience, then we would serve some people.
It was a win-win. Not only did we give value to these marketers, but they became our customers.
Marketing Problem: Solved
Our team closed the week knowing that we had solved one of the company’s most important issues — the who, where, and how of marketing. We turned the key in the ignition on our marketing efforts. For the next 12 months, we gained speed, fine-tuned the engine, and achieved remarkable velocity.
Within one year, KISSmetrics’ traffic had exploded to over 500,000 unique monthly visitors. Conversion rates were through the roof. CAC (customer acquisition cost) was low. LTV (lifetime value) was high. And the product kept improving. We had created a marketing framework that any business could use to launch or expand their marketing efforts. The only followers that matter are those who want to engage with you. Anyone else is a waste of your time.
Startups don’t need to waste precious time obsessing. Instead, there is a simple and straightforward process to follow:
1. Who is your target customer?
Identify your target customer by understanding: 1) what your product does, 2) what problem it solves, and 3) who wants this problem solved.
2. Where do they hang out?
To find out where your target audience hangs out: 1) create a master list of potential places, 2) establish criteria for what a solid marketing channel is, and 3) vet your list according to those criteria.
3. How do you engage with them?
To engage with your customer: 1) identify your method of engagement, 2) expand as far as this method allows, 3) confine your reach only to the target audience, and 4) aim to deliver a high amount of value.
This process points to true north in marketing, giving your startup the foundation for success.
What about you?
Building KISSmetrics was not easy. (Is there such a thing as an “easy” startup? I don’t think so.) It was a struggle to get the business off the ground. In retrospect, I’m glad for the struggle. It’s what gave rise to the marketing framework, and has helped us launch even more successful startups.
What kind of struggles is your startup facing? What tools or techniques did you try when identifying a target audience or testing new marketing channels?
I read every comment, and consider every line of feedback. My goal is to understand what you’re facing, so I can help as much as possible.
Please, share your story.