The Lost Art of Marketing Alpha

Customer acquisition has gotten lazy.

The easy money environment over the past 10 years has, I worry, eroded one  of the most critical skills when it comes to building great businesses and brands—efficiently acquiring customers.

VCs funding growth without great concern for unit economics enabled brands to raise fresh capital and deploy that money into marketing efforts through Meta and Google.  Brands and retailers further poured gas on the fire by offering discounts.

But... This is the most expensive and least sustainable form of acquisition.

Imagine a continuum (crude effort below) moving from zero cost on the left to infinity cost on the right.

Too many companies focus on the right/expensive part of this and too few on the left/brand building side that comes from more organic activities.  In reality, the best mix is a true portfolio approach.

There’s no timeless recipe here.  Marketers are always changing alpha—that new activity or channel that gives a little more value or an advantage in acquiring customers over a competitor.  And that little found alpha tends to disappear rapidly.

The best create culture with their mix of activities and channels, and that’s why not having the muscle is such a disadvantage.

In my own career, I’ve a number of approaches work:

• 20+ years ago, in the dark ages before Google and Meta, we built Handango, the first mobile app marketplace, with a mix of events, media, enthusiast groups (using developers as evangelists), power users, and channel partners (e.g. we powered the storefronts for Palm and Verizon, among countless others).

• At Gilt, strong product market fit made paid marketing a compelling and sustainable channel, but the flywheel really kicked off with an incredible and then-innovative referral program-tell your friends, you both get credit to spend. The PR team did remarkable work—both with the sales and brands, but also to amplify marketing partnerships. Those marketing partnerships—exclusive launches of Google’s Chromebook (<120k new users), stunt-priced 2011 Jettas (>80k new users), designer capsule collections for Target, and even selling a chartered Virgin America plane on Cyber Monday—created a second wave of culture that found new groups of customers and created their own buzz.

• At Spring, we never found great product market fit, but we were able to scale rapidly from $7m GMV to $90m GMV using affiliates and influencers globally (non-US customers made up 60% of our customers in the end).

• And at Gympass, the founders had the wisdom to see early on that consumer wasn’t a great business model and pivoted the company—with incredible success—to B2B2C—getting to the consumer with far greater leverage through the enterprise.

My favorite brand marketing campaigns create culture.  Spotify’s annual Wrapped campaign may be the best—personal, compelling, voyeristic, and enduring (and now endlessly copied).

The chase for an edge is always on; there isn’t a singular playbook; it requires deeply understanding your customer and meeting them where they are—ideally away from the noise of social media and SEM.  And the chase, done right, is dynamic and anything but lazy.