July 23, 2015

Product Management

7 methods of strategic planning which suit any startup

By Alexander Sergeev

Internet marketing specialist Lloyd Alexander has published a review of 7 modern marketing methods of strategic planning for startups.

As a young marketing specialist, I like using various planning methods. They help not only to plan and establish priorities but also to visualize how everything I do falls into place.

I won’t tell you about 4R conception, Porter 5 forces analysis or SWOT-analysis. Surely, these methods have their own place, however, they can’t show a development direction for a startup which wants to concentrate its energy on growth. In addition, they’re out-of-date.

Planning methods I’ll tell you about were developed by a modern marketing guru. Using them together will help you to make up a growth strategy for a project, choose traction channels and affect clients’ behavior.


Growth methods

These models are useful for defining how to grow, when to grow and what metrics to track.


1. Startup pyramid

Sean Ellis (Qualaroo CEO, growth hacking godfather) applies this method when he thinks about a startup growth strategy. It’s good because it gives an approximate game plan depending on the stage of your business.

The pyramid is divided into 3 stages:

  1. Product/Market fit. The first and the most important model part  — achieving product/market fit  — is in the basis of the pyramid.
  2. Transition to growth. Transfer to growth as you understand that you have something that people need.
  3. Growth. The stage starts from channel tests and analysis of their work. Then you optimize channel work and use the most efficient ones.



2. Pirate metrics: «AARRR!»

Dave McClure (Founder of 500 Startups) has developed so-called pirate metrics which can be of a tremendous help in customer acquisition and conversion. The model shows clearly how a user could go through a funnel and what metrics are the weakest.

The basics:

  • Acquisition. Think of growth channels (paid search, Facebook ads and so on).
  • Activation. There are different actions for user activation for each business (subscribing to newsletters, completing a profile).
  • Retention. Define for yourself what it means for a user to be inactive. For example, someone who hasn’t made a single purchase.
  • Revenue. How do you make money? Pay attention to such metrics as LTV, conversion level and shopping cart size.
  • Referral. Do your users tell other people about your product? If yes, you’ll see a virality growth. Recommendations effectively decrease CAC.



3. Lean-analytics stages

Alistair Croll and Ben Yoskovitz tell about their own development planning model called “Lean Analytics Stages”:

  • Empathy. Informing potential clients about the development of your minimum viable product (MVP).
  • “Stickiness”.  Build something that will make people come back. Focus on acquisition and retention.
  • Virality. Try to maximize growth with the help of existing clients.
  • Revenue. Make money. It’s also important that the money you get fuel customer acquisition efforts.  Adjust your business model on this stage. CAC and LTV are also essential.
  • Scale. If a company knows its product and market very well, it’s time to focus on making more money from a current market or enter new markets.


Channel selection models

It’s very difficult to decide where to apply marketing efforts when there are so many possibilities. These models will help you to find the right acquisition channels.


4. The ICE score

Sean Ellis has shared another genius idea — the ICE score — which helps to quickly evaluate potential growth channels.

Ask yourself 3 questions:

  • What will an effect be if it works?
  • How confident am I that it will work?
  • How much time/money/efforts is required?


5. Bullseye model

It was developed by Gabriel Weinberg and Justin Mares for Traction: A Startup Guide to Getting Customers book. It gives a deeper understanding of channel selection:

  • Brainstorm. Surely, you have some biases towards some acquisition channels. In order not to miss opportunities, they suggest to think of 1 idea for each of the 10 traction channels.
  • Rank ideas. Think critically about the ideas you’ve got (high-potential, possible, risky).
  • Prioritize. Re-think your categories and choose thoroughly TOP 3 highly potential channels.
  • Test. Think of a cheap test for your channels in order to evaluate feasibility of your ideas.
  • Focus. Direct resources to the most promising channel.


Behavioral models

These are 2 models that can be used for affecting user behavior.


6. The Hook model

User psychology guru Nir Eyal  tells about Hook model in his recent book Hooked: How to Build Habit Forming Products. He considers that the products we use daily cultivate habitual user behavior:

  • Trigger. Involving a user into a cycle starts with triggers.
  • Action. The easier it is to do something, the more often users will do it.
  • Variable reward. In order to create a habit, it’s necessary to reward a user.
  • Investment. Users need to invest themselves in your product in order to solidify the habit.




Jonah Berger, author of Contagious: Why Things Catch On and STEPPS method creator, states that: “Virality isn’t luck. It’s not magic. And it’s not random. There’s a science behind why people talk and share. A recipe. A formula, even”. You can use it to create your own viral content:

  • Social currency. It’s very important for people how others perceive them. Invite-only web apps use this method so that people feel like insiders.
  • Triggers. If people are often reminded of your product, they will start to speak about it more often.
  • Emotions. Content is more likely to become viral, if it appeals to emotions.
  • Public. The more public is a project, the more people will discuss it.
  • Practical value. People like doing useful things.
  • Stories. People like to tell stories.

It was a brief review of marketing methods. Read a full version here.

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