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Kindle Notes & Highlights
by
Dan Martell
Read between
November 23 - December 13, 2024
You need both your channels and your funnel working together properly to win.
The four types of channels we mentioned are what we call “macro channels”—which we categorize as Earned Media, SEO, Paid Ads, and Cold Outbound.
The easiest way to think about earned media (or partnerships) is that you’re borrowing attention from someone who has already done the work to build an audience. All earned media strategies are built upon a single question: “Who are my customers already paying attention to?” From there, the goal of earned media/partnerships is simple: find a way to get your partners talking about you, featuring your platform, or giving you access to their audience. And this type of channel can be quite rewarding—it’s one of the most cost-effective and quick ways to start building authority in any market.
Modern earned media is all about capitalizing on other people’s content—which means that guesting on podcasts, speaking at industry events, collaborating on social media with influential people in your industry, guest-posting on industry blogs, getting featured in industry newsletters, and doing joint webinars with influential people and brands are all high up on the list.
When you’re on someone else’s channel, you’ve got to have something to give away. That’s where the lead magnet comes in.
A lead magnet is something you give away (PDF, workbook, template, etc.) in exchange for someone entering their email address (and sometimes phone number)—the key information you need in order to capture the attention you’re creating.
There are lots of ways that partnerships can work—product integrations, affiliate and/or reseller agreements, portfolio sales that include your products…and of course, co-marketing efforts like we’ve already talked about.
Your mission with earned media and partnerships is to borrow attention from someone else who’s already got it.
The 3 Fs of Borrowed Attention Looking to dive straight into an earned media/partnership channel? Use this quick framework to find out how to best create an earned media/partnership channel that maximizes borrowed attention: Fund: Who is your best-fit customer already buying products and services from? Follow: Who does your best-fit customer pay attention to? Think about authors, podcasters, blogs, websites, business coaches, influencers, publications, etc. Frequent: Where does your best-fit customer hang out? (Groups, events, masterminds, user conferences, etc.) Take out a piece of paper,
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To do
Whenever you’re writing on the internet, try to include target keywords that your customer would search for. It’s free.
A Note on Keywords As of the writing of this book, there are a lot of things changing in the SEO world. There are a ton of questions: How will the algorithms evolve due to AI-generated content? Will keywords become less important over time? How will keywords be utilized when AI is actually generating the search results? You get the idea. The timeless strategy in all this is that you should try to “own a few terms.” The tactics of how you do that are changing incredibly fast—but the correlation between the words that your customers use to describe their problems and the content you produce is
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Importante
Don’t just write about your product. Write about the problem that your customer experiences before they know they need it.
Importante marketing
Create helpful content about the main problem and how to solve it—that doesn’t have anything to do with your software. Why? Because you’re not telling them that you’ve got the best product. You’re teaching them how to think about the problem—and that it needs to be solved in a certain way. And (of course) your product should be the best way to create that solution. “Your top-of-funnel content must be intellectually divorced from your product, but emotionally wed to it.”—Joe Chernov (CMO of Pendo).
Importante seo
If you’re a self-funded company, your goal should be to recover all costs associated with getting a new customer in three months or less.
CAC Payback Period—A Quick Primer CAC Payback Period: The amount of time (in months) that it takes to recoup the money you spent to acquire a customer. For example… You spend $2,000 to get a customer. Your average deal is $500 per month, and your business has an 80 percent gross margin, which means that you’re generating $400 per month in gross profit per customer. You can then divide $2,000 by $400 which equals 5 (the number of months it takes you to earn back your cash). Your CAC Payback Period is 5 months. Your goal is to get your money back in 3 months or less.
Kpi cac
Note: Whenever you DO go down the path of paid advertising, make sure to approach it scientifically and be ready to do a lot of testing. When you run a test, change one variable at a time, measure the change, and keep stacking small wins until you’re able to maintain your CAC Payback Period under 90 days and scale up your ad spend.
Cold outreach is interrupting your perfect-fit customers—typically via email, direct messages on social media, a phone call, or even old-school direct mail. Otherwise known as outbound prospecting, you’re reaching out to leads who you’ve never talked to before. It might sound old-fashioned or obnoxious, but a cold outreach channel could be an incredibly valuable channel for the right types of companies.
Cold outreach is a viable option when your average deal size is at least $5,000 annually. This doesn’t mean you can’t do cold outreach in other cases; it just means that cold outreach might get prohibitively expensive and/or your CAC Payback Period might be super long.
Indicador outbound
But in our eyes, if your price point allows it, it’s certainly worth a shot—because you get to learn fast, iterate fast, and take control of the number of deals you’re generating. If you can get to a point where cold outbound is giving you repeatable success, it’s actually one of the simpler channels to scale up, because it’s just a function of adding people to follow the process and work the lists. Just like paid ads, there’s high risk because of the capital outlay you generally need to make up-front, but high rewards in that it can scale pretty quickly if you can get good unit economics.
Chris at Trainual. David at DealMachine. Marcel at Parakeeto. Matt at Review Wave. They’ve all got one thing in common: they used one channel, got it cranking, used it to generate millions in revenue, and only then did they branch out and add more.
Un canal a la vez
But for some reason, most entrepreneurs don’t like acting like lasers. We tend to get impatient (or even bored)—and end up with a little bit of SEO, a little bit of earned media, a few ads on Meta, a couple on LinkedIn, some cold outreach emails. . . and all that firepower becomes diluted.
You have four “macro channels” to choose from: Earned Media, SEO, Paid Ads, or Cold Outreach.
To determine which of the four macro channels to start with, we built a simple worksheet (which you can grab at softwarebook.com/channels).
Process: Do I have a process for this channel that’s documented, executable, and consistently producing results? People: Do I have people dedicated to executing this process without my direct involvement? Scorecard: Do I have a measurable scorecard for this channel that allows me to measure its inputs (activities) and its outputs (results)? Testing: Do I have a testing cadence in place to continually test new strategies to improve or maintain the results of this channel over time? CAC Payback Period: Am I recovering my Customer Acquisition Cost in under 90 days?
We don’t like to put a time limit on this strategy. We want you to focus on one column—which represents one channel—until it’s all the way green. Once you get it green (whether that takes a day or a year), you can go on to the next one.
You’ll grow faster by prioritizing speed of execution over perfection.
You can absolutely scale a company to over $1 million in ARR built on the “wrong” marketing channel—as long as it’s optimized. So…optimize it.
Some More Details on CAC As we mentioned earlier, CAC stands for Customer Acquisition Cost—the amount of money your company is spending to get a single customer. If you’re not sure how to calculate your CAC, here’s a simple formula: CAC = (Marketing Spend + Sales Spend) / # Of New Customers During That Spending Period Let’s say you spent $5,000 on sales and marketing in a month and acquired 5 customers in the same month. Your CAC would be $1,000. Ideally, your CAC Payback Period is under 90 days. To calculate CAC Payback Period, you’ll need to know two other numbers: Gross Margin: The amount
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Cac formula
Every channel you stack will increase your growth faster than the last.
Every new channel will take less effort to mature than the prior one.
Different channels and different messages resonate with different prospects—it’s just human nature. By ruthlessly focusing on one channel at a time and then stacking them on top of each other, you can build a marketing engine that never underperforms and that is incredibly resistant to external influence (like AI hurting cold outreach, or Facebook changing their algorithm). And that’s a fun game to play.
One channel at a time: Trainual’s success story illustrates the power of focusing intensely on a single marketing channel. Rather than spread yourself thin across many different channels, you’ll get better results by focusing on one channel at a time.
Understand channels vs funnels: A company’s growth engine consists of two components: marketing channels (where you generate attention) and marketing funnels (where you convert that attention into leads and customers). Both need to work in tandem to drive growth effectively.
Pick one macro channel: There are four main types of marketing channels: Earned Media and Partnerships, Search Engine Optimization (SEO), Paid Ads, and Cold Outreach. Each channel has advantages and disadvantages, but all of them can p...
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Mature each channel before moving on: Make sure a channel will continue to produce results, without your involvement, before moving on to the next one. You can build maturity starting with process, people, scorecard, testing, and finally, by getting your CAC Payback Period to under 90 days. Get at le...
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Stack channels over time: Once a channel is fully optimized, stack additional channels to build a truly durable marketing engine. Each new channel should build on the success of the previous one...
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“The best way to sell something: don’t sell anything. Earn the awareness, respect, and trust of those who might buy.” RAND FISHKIN, co-founder and CEO of SparkToro and former founder and CEO of Moz
“We started creating mid-funnel blog posts, which resulted in a 51 percent lower cost of conversion.”
A great funnel is like alchemy—it turns attention into customers, over and over again.
The well-designed marketing funnel is more than a “buy now” button; it’s a multi-stage process that’s designed to engage with your future customers at every step of the buyer’s journey. It doesn’t matter where in the journey they are when they first discover you…when this is done well, they’ll always have a way to engage with your brand.
Funnel
The attention from your marketing channels will attract people who are at all 4 stages of this funnel.
The vast majority of the attention you generate will come from people in the Awareness and Consideration stages of their buyer’s journey.
The amount of people in a market who are “ready to buy right now” is usually under 10%.
By meeting a customer where they’re at and entering the narrative early, it accelerates them towards your solution—and keeps them engaged along the way.
Think about it: how many times have you been watching a YouTube video, reading a blog, or listening to a podcast and learned about a problem that you didn’t even know you had? That’s top-of-funnel content at work. By design, that thought leader already has your attention (from their content). Maybe you’re a casual part of their audience and had no intention of buying anything from them at any point in the future. That’s cool—but now, they’ve made you aware of a problem—and when you think of that problem, you’re also thinking about them. They’ve made you problem aware.
