Acquiring customers online. The history of business communications is paint with great ideas advanced by particularly creative marketing directors. What's one of the most recent ones? Burger Kings. This restaurant chain recently launched a TV ad in which an actor says that 15 seconds wouldn't be enough time for him to describe all the fresh ingredients contain in a whopper, the brand's flagship hamburger. He then asks, "Okay Google, what's the whopper which has the effect of triggering all Google home assistants in American households? The Google assistant then takes the reigns of the TV ad by updating the Wikipedia page on the hamburger. On top of the aesthetics and originality of certain marketing stuns, what are the main rules to bear in mind for acquiring customers online? To pull or to push? Google and Facebook are the two platforms most used by businesses to communicate. While they're often perceived as competitors, these platforms actually meet very different needs. Google let's companies by advertising space based on Internet users requests. For example, Google let's travel agencies by the word vacation, to give them the chance to appear on the first page whenever an internet user types that word into the search bar. The ad is said to be pulled because it only appears after an internet user has made an explicit request regarding a specific subject. Facebook also gives companies the opportunity to buy space to appear in users news feeds. For example, Facebook let's travel agencies appear in the accounts of a group of users whose characteristics include being parents and having recently liked photos of vacations. In this case, the advertising is pushed because it is displayed on users walls based on their sociological features and online uses, without users explicitly stating that they need a specific product or service. Each online customer acquisition channel therefore has specific characteristics that make it suitable or ineffective for certain types of products. This might seem obvious, but it's worth repeating, companies should always be careful to select the most suitable customer acquisition channels based on the particularities of the products around which they are communicating. Second price auctions. Many companies want to buy the same key word or appear visible to the same group of users. To choose the products that will get the best advertising spaces, Google and Facebook have decided to pit companies against one another through an auction system. This auction system is quite particular in that it is a second price system. This means that the company that comes first will be the one that bids the highest amount. Although this company won't pay the amount of its own bid, but instead the price of the second highest bidder. For example, let's say that you and I want to appear at the top of Google's results when an Internet user searches for the word travel. If you bid $10 and I bid eight dollars, you will appear before me and will only pay eight dollars. To be specific, criteria other than the amount bid by companies, are taken into consideration to determine the final price of the advertising spaces offered by Google and Facebook. Because the two platforms put the emphasis on quality, they won't allow for a plumbing company to appear when key words or user groups related to vacations are used. Quality criteria therefore come into play to determine which companies have the right to appear in advertising spaces and at what price. It was Hal Varian who came up with this bidding method for Google. Before working as the Multinationals Chief Economist, he was a professor who mostly taught Game Theory at Berkeley, MIT, and Stanford. In Game Theory however, it can easily be demonstrated that the best strategy for a company in the case of a second price auction system, is to bid the price that is exactly willing to pay for the advertisement. No other strategy could allow this company to save money. Growth hacking. The Internet has become congested. Everybody wants to appear in first place to such an extent that bids have gone up and prices have become exorbitant. Faced with this situation, companies are competing with one another when it comes to imagining ways of developing free and effective customer acquisition channels. These are called growth hacks. These hacks are often well guarded secrets. I'll give you mine. If you follow someone on Twitter, there is a tacit politeness rule among Twitter users that will get you a follow back in 40 percent of cases. Are you a travel agency? In this case, follow all of the followers of the most connected season traveler's Twitter accounts. Twitter lets you follow 2,000 people per day, and if you get a 40 percent follow back rate on 2,000 people per day, that means 800 followers. Repeat this daily with a bot or manually, and you'll get 8,000 followers in 10 days, and by extension, 80,000 followers in three months. Which travel agency can boast of having acquired 80,000 followers on its Twitter account for free in just a few weeks? Not many. That's the power of this hack. Traditional online customer acquisition strategies have become so expensive that creativity and ingenuity had become two key capabilities in acquiring customers online.
