The Secret to Effective Marketing – Quant Based Marketing

July 15, 2010 - Get free updates of new posts here

When I first got the job at Mint, Aaron Patzer (founder) told me I had to get Mint.com 100,000 users 6 months after launching. I began by making a start up marketing plan. Honestly, I was a bit nervous.

The result: after 6 months Mint had over 1 million

How did that happen?

First off, the product was awesome. That makes marketing less about “marketing” and more about educating and sharing with people. Still, there is always that annoying quote about if a tree falls, blah blah you know what I mean.

Instead of doing “social media marketing” and flailing around with random posts throughout the web we needed a framework and a new approach to pre-launch marketing.

Quant Based Marketing.

Work backwards to the solution of what you need (that is the best way to guarantee success) and map it in Excel. Dave McClure is an Excel / PowerPoint guru if you ever need some inspiration.

Here’s an example for Mint:

Target: 100,000 users in 6 months.


Click to access the spreadsheet and use it yourself

This is the KEY to any pre-launch marketing you are doing. (Click to Tweet)

Most people have the tendency to wait for their thing to launch, email a few friend, tweet about it and get on their knees to pray it works.

There are two columns, total users and confirmed users. When you setup your metrics on the pre-launch like above and then confirm the marketing channels you cannot fail. Only confirmed matters!!

You must confirm the marketing ahead of time: blogs, twitterers, ad buys, etc… Don’t leave it up to chance.

The Meat:
– Make your target list prior to launch.
– Figure out your target list through: wefollow.com, Buzzsumo, google searches, pick specific niches (at Mint it was Personal Finance, geeks (Paul Stamatiou) and GTD people) and other wild ways
– Track with the Google Spreadsheet to know what’s working and what’s not.
– Consider testing 2-3 different messages to people to see which get highest responses.
– Use new methods to get a hold of people. Don’t be like everyone else
– Oh yea, build a great product.

 

Follow me on Twitter if you like this and want more.

There’s a few other key posts I wrote after this one including How to Do Funnel Marketing, How to Get More Subscribers, and 15 Ways to Optimize Your Subscription Model.

Thanks Jason Baptiste for reviewing.

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40 responses to “The Secret to Effective Marketing – Quant Based Marketing

  1. Bill DAlessandro Reply

    Good post Noah – too many people take a “give it our best shot and pray” approach to marketing. I’ve always been a big fan of finding out what works quantitatively, and iterating rapidly. There’s no reason not to in today’s age of instant analytics and easy A/B tests.

    I’m curious though – it’s fairly easy to estimate traffic numbers, but your whole model really boils down to your estimates of click through and conversion rates. How did you arrive at the numbers you did?

  2. Azeem Reply

    but what about getting customers/users organically? what about “word of mouth” like email invites, twitter invites(/spam), etc etc, stuff like that; that’s the modeling i’d really like to see (taking into account friends of friends, etc.), because that’s way more effective than just press, SEM, etc. for a lot of companies and services (not all)

    thanks for this post!

  3. Lizy Reply

    Thanks for the insightful techniques. It is a cool concept.

    I would love to better understand how you are getting the target figures in the excel sheet. I am unclear on where you you are pulling this data from and how you are determining the friend status of something like TechCrunch.

  4. Noah Kagan Reply

    Hey Bill,

    Some of the estimates are clearly estimates but you can base that on compete #s, search for people who’ve talked about the traffic they’ve received from certain sources and just a good old fashion guess.

    Conservative is always ideal and overshoot your target makes things more realistic…

  5. Noah Kagan Reply

    Azeem

    Ill pull together #s so you can see how to do that.

    For CTRs you can run some ads to get a baseline, data really depends on how well you do. A lot for me is past experiences. I can pull some data from ads and blogs to see what happens.

  6. jason Reply

    this isn’t quant-based marketing; it’s simple, obvious arithmetic. knowing that channel X has a 10% CTR and a 25% conversion rate, then doing this calculation is just basic math. there’s nothing insightful here, and you never mention costs or quality, the real quant issue for most start-ups.

    while goals (like 100,000 subscribers) are always great, marketers need to go far beyond your spreadsheet to include cost per lead, lead quality, free-to-paid conversion rate (or other up-sell), etc. if new leads cost $100 each in channel A and $20 each in channel B, it’s clear where you should spend, right? not if it takes 25 channel B leads to get a single repeat user (or paying customer).

    you do have some good points in “the meat,” including using new methods and doing some testing, but there needs to be much more thought put into this than just those few points. what about tailored messages for each channel? understanding who your ideal customers are before choosing channels? the actual “offer” or call to action?

  7. Noah Kagan Reply

    Jason,

    Awesome response. I love getting called out.

    You are discussing more direct response marketing which is a whole other ball game. I agree I need to dig into LTV, costs, etc, but this was more of a high level discussion of how people need to actually be objective based in their marketing. I will do a follow up that has more on the quants for measuring costs over time and figuring out how much you can spend to buy a user.

    Appreciate any other things you want me to write about…

  8. Heather Ritchie Reply

    Noah –

    3 very basic questions:

    It appears you used a combination of Paid Search/Ads + Key Relationships + PR/Media – what % would you say you had to pay for versus ‘earned’ media?

    Did you leverage many relationships (i.e.: TechCrunch, etc) or did you work your way into their hearts?

    Lastly, you knew your niche from the beginning (Finance + geeks) – how can some of us who cater to more than just one sector (we are for anyone that uses email – pretty broad) choose the right networks to find interest / users initially?

    Over to you for your 2-cents!

    Cheers,
    Heather

  9. noah Reply

    We paid for about 40% of the traffic.

    Fortunately we had a lot of relationships from being involved in the personal finance blogs and our investors had great connections with many people.

    You can’t cater to more than one sector and have a niche. I think you just need to pick 1 right niche, own it and then move to other ones.

    Hope this helps.

  10. Roy Rodenstein Reply

    The math is fairly basic as a comment called out, but your points on leaving nothing to chance are good ones.

    If you really got those conversion rates that is pretty amazing. Most sites convert at 5% on a good day. Of course Mint was an awesome product and had huge WoM (which I don’t see on there, I guess because this was a pre-launch model).

    To that point, you mention about 40% of the initial 100k signups were paid, but if the product kicks butt and generates strong “net promoter score” etc. it’s a worthwhile expenditure.

  11. Jamie Riddell Reply

    What a great idea – plan before you launch. If I was being pedantic I would suggest that is not a new framework but merely common direct marketing principles which are not new.

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  21. aimlegend Reply

    Great insight, the tips given will sure boost my startup, and that of many others. Clearly itemized and detailed. I’m indeed grateful. Thanks Noah.

  22. Anuj Adhiya Reply

    Hi Noah
    I came across this article on GrowthHackers.com.
    I know it’s been a while since you wrote this but it’s still incredibly useful.
    I was hoping that you could expand more on the the “Status” and “Confirmed Users” columns here?
    With respect to “Status”: What does Coordinated, Emailing, Receiving mean?
    For “Confirmed Users” – how do you know you have confirmed users (from your pool of total users)? What determines this number & where do you get this number from?

    Thanks a lot!

  23. Max Reply

    What’s missing is how much each segment cost… That would be interesting. I’d like to know how much was spent on google ads to achieve those user counts vs coordinated personal finance sponsorships. What is a personal finance sponsorship anyways? Could this method have worked if the company is bootstrapped?

  24. Phil Reply

    This is cool Noah but for this to be really useful and to help more entrepreneurs it would be ideal if you could expand on this and include more details on:

    1) What sorts of ads you had on these sites – were they ppc or P.R articles?

    2) If they were P.R articles – then advice or a guide on how to get some P.R love would be awesome.

    3) More details on how you got such high conversions and ctr’s

    4) costs per acquisition and lifetime value of customers.

    I really love this approach to marketing – but to be more accessible and usable I’d like to see a fuller picture please.

  25. Chris Reply

    Please provide more details on how you extract the number for the CTR, Conversion, and Total Users column.

    As Phil pointed out…

    1) What sorts of ads you had on these sites – were they ppc or P.R articles?

    2) If they were P.R articles – then advice or a guide on how to get some P.R love would be awesome.

    3) More details on how you got such high conversions and ctr’s

    4) costs per acquisition and lifetime value of customers.

  26. Felipe Venetiglio Reply

    Noah, I always recommend this post to people trying to launch a project, so I decided to translate it into Portuguese. Hope you don’t mind me doing this (I’ve tried to tweet at you, but you must receive a few thousand mentions a day).

    I’ve also added a few thoughts on how this can be more effectively used specifically for apps, as this is mainly what I talk about.

    Here’s the link: http://venetiglio.com.br/post/97762100439/quant-marketing-para-aplicativos

    Let me know if you want me to change anything! I’ve tried as much to keep the original spirit of your writing.

    Best,
    Felipe