EP7: How Molekule Built a Predictable 8-Figure Growth Engine
“We’ve seen massive increase in customer acquisition costs. It’s one of the biggest issues that brands are facing in 2019.” - Allen Burt (1:56-2:04) The growing number of marketing channels has made selling more complex and costly for today’s businesses. As VP of Growth for Molekule, Gaurav Agarwal has developed strategies that have helped the company achieve 7-figure revenues every month since it launched. By developing a framework for success, Molekule is now able to predictably model the growth of their brand. This keeps customer acquisition costs low while helping them determine the risks involved with every new acquisition channel they use. Molekule has adapted to the shift occurring in the hardware industry. More businesses are bypassing retailers and distributors and going directly to consumers. As a result, businesses are being forced to create digital-native brands that speak directly to their target markets in strategic ways. Businesses need to identify the customer acquisition channels that work. Some channels offer a high level of confidence and predictability. These are ideal for achieving a minimum amount of revenue. Other channels offer less predictability, but they can be useful if they offer a higher return on investment (ROI). The key is to use the right mix of channels for more predictable revenue and ROI. “Not all touch points are equal. Some have to be more brand-heavy, some have to be more sales-heavy.” - Gaurav Agarwal (29:34-29:42) Finding the Right Customer Acquisition Channels. Industry competitors and peers who are selling similar products at a similar price range can help you figure out what is and isn’t working. Once you’ve identified what channels work, test them to see what the results would look like for your business. Not every dollar spent on marketing will result in the same return if you fail to adapt to the changing marketplace. In some cases, spending your marketing dollars elsewhere may be the best option when an acquisition channel is no longer producing the same results. Channels can become saturated quickly. So you’ll need to find a new audience, create a new message, or leverage a new acquisition channel. Finding a New Audience. Your audience must be scalable if you want to continue sending the same marketing message to the same audience through the same channel. Otherwise, you’ll need to find a new target market. Create fresh content that’s relevant to the needs and interests of that audience. You may need to find new channels that speak to the same audience. This diversifies the way you reach your existing audience while you achieve consistent growth and keep marketing costs low. Ultimately, there are three components you can play with to determine what works: message, audience, and channel. “When you acquire a customer, you should make enough money back that the acquisition is profitable...and you make enough profit to allow you to acquire another customer.” - Gaurav Agarwal (40:32-40:51) Building a Growth Team. The Molekule growth team consists of an analytics team, a retention team, and a brand team. The analytics team identifies wasteful spending and prevents overspending to keep marketing campaigns efficient and profitable. The retention team focuses on audience engagement, subscription, and other factors that are critical to long-term growth after a customer has been acquired. The brand team is responsible for the creative related to the company’s marketing. The acquisition of one customer should leave you with enough profit to acquire another customer. This creates a self-financing growth system. Use analytics to accurately measure the results of your efforts. Organic growth comes from building a customer base that loves your product and your brand. Focusing on your customers first will help you achieve real and measurable growth, higher return on your marketing spending, and more profitable and predictable results. Some Topics we talk about in this episode: Introduction - 0:54 What is Molekule? - 3:59 How Molekule Has Consistently Achieved 7-Figures Every Month - 6:23 Knowing the Probability of Success for Any Marketing Channel - 11:23 Adjusting Marketing Channels in Response to the Market - 16:51 Molekule's Team Structure - 22:58 How to Eliminate Wasteful Spending - 25:16 Tools for Measuring and Testing Buying Behavior 30:32 Building a Growth Team With Limited Resources - 33:10 The Lifetime Value of Your Customer - 38:30 How to Scale in 2019 - 44:45 Wrap-up and Takeaways - 51:15 How to get involved Join the community of brand owners and industry influencers in the Facebook group The Commerce Lab or visit thecommercelab.com. Visit www.bluestout.com for more info Connect with Gaurav on LinkedIn and learn more about Molekule by visiting their website at www.molekule.com. If you liked this episode, be sure to subscribe and leave a quick review on iTunes. It would mean the world to hear your feedback and we’d love for you to help us spread the word!