Why Diversifying and not being reliant on Facebook & Instagram Ads is Necessary for Startup Growth

Social media sites like Facebook and Instagram are constantly changing how their ads are optimized and charged for(going from algorithms to ML/AI), which can significantly impact your CAC. It’s no secret that Facebook Ads has been an incredibly effective tool for customer acquisition and growth for many startups. However, as with any marketing strategy, relying solely on one channel can be risky. The current climate of uncertain ad policies and unpredictable returns has made it increasingly clear that startups need to diversify their customer acquisition mix. In this blog post, we’ll explore why diversification from a strategy solely dependent upon Facebook ads is critical for startup growth and how to achieve it.

The limitations of Facebook ads:

While Facebook ads may seem like a convenient option for startups, they have their limitations. Some startups find initial success by targeting a very small set of users to find they are constantly creating new audiences and seeing CAC never stabilize. Additionally, Facebook has a responsibility to shareholders to constantly increase the ARPU of Facebook users — this means charging advertisers more. Relying solely on Facebook ads can also lead to a lack of diversity in the customer acquisition channel, making startups vulnerable to platform changes or policy updates that can impact their ad performance.

The importance of customer insights:

To make the shift towards diversifying its customer acquisition strategy, Cliq engaged Squall and started by conducting customer interviews. Squall realized that people loved their chairs and frequently recommended them to others. This insight led them to focus on incentivizing this referral behavior.

Incentivizing referrals:

Squall created a custom referral flow with milestones to encourage Cliq customers to recommend their chairs to their network. The team implemented a referral campaign that personalized the referral process for every user, leading to a significant increase in referrals. Referral marketing has been found to be a cost-effective marketing strategy for startups, and Cliq was able to reap its benefits by offering rewards to customers who referred new clients.

Promoting sharing:

Cliq made the most of post-purchase email flows and customer emails to promote sharing and create another revenue stream that did not rely on Facebook ads. With the help of viral loop and other tools such as Zapier, Shopify, and Unbounce, Cliq saw a significant rise in customer referrals, reducing their dependence on paid media and Facebook ads.

Creating diversity in your customer acquisition mix:

Cliq’s success story proves that diversifying your customer acquisition mix is necessary for startups. Building a robust customer acquisition strategy that includes techniques such as referral marketing, public relations, content marketing, and SEO can lead to long-term growth and be an effective way to sustain a startup’s operations, even during challenging times.

Conclusion — You Need a Margarita:

In conclusion, startups that rely solely on Facebook ads run the risk of encountering limitations such as budget constraints, algorithmic changes, and policy updates. Diversifying your customer acquisition strategy (aka — creating your marketing margarita) is essential for a sustainable long-term growth strategy. Referral marketing and promotions that prioritize sharing can help reduce your startup’s dependence on Facebook ads, leading to a more diverse and robust acquisition mix. Cliq’s success story is a testament to this approach, and startups can learn from their example to create a diversified and successful customer acquisition strategy.