High customer acquisition costs (CACs) are said to be the second biggest reason why start-ups fail (not having product-market fit is the first). So that’s the problem that ofrelevance.com is fixing.
Expensive growth
The CACs have been skyrocketing over the last couple of years because there is more demand for the attention of a limited target market. There are only so many slots on the above-fold first page of Google. It is not unusual for non-Enterprise SaaS companies to be paying $100-$200 to acquire a customer.
The thumbsuck theory is that any CAC that is less than a third of the lifetime value of a customer (LTV) is a win, but any SaaS founder will call BS on that statistic: small and new SaaS companies cannot continue to fund growth if it takes 3-6 months to pay back the cost of acquiring a customer. It’s just not sustainable.
Blame the VCs
This is compounded by the VC trend of funding growth at all costs. Their logic is that new company valuations are determined in large by the rate of growth. Get your growth rate up, and your valuation goes up too.
Apparently the fact that that growth was funded by unrealistic expenditure is of no consequence. It’s like a pyramid scheme, but it’s really bad news for new entrants who are not VC funded…because how do you compete with someone who is not applying economic logic to their marketing?
Organic all the way?
Companies who cannot afford to fund growth through PPC ads or direct sales are turning to organic growth as main channel of marketing.
This compounds the problem even more, because most companies equate organic with SEO, and there is a lot of effort being put into getting onto the first page of Google results. Great (sort of) if you make it there, but what about the hundreds of companies that don’t make it, but deserve to be there?
Take this search result for “Best Twitter tools for growth” (you can click on image for full view):
On that first page, not one of the tools profiled in our Twitter Growth RelevantGuide appears. Not one!!!
Bad news for the web tools, sure. But really, really bad news for the poor soul who typed in that search query. They have to click on blog posts with “97” tools, and be subjected to bad copy, filled to the brim with SEO keywords and offering little more than a headache.
That’s why I am so optimistic about ofrelevance.com. I am putting all my effort into bypassing Google, growing our email list of people looking for quick solutions to serious problems, and levelling the playing field for all the small companies who are struggling to acquire new users.
I am helping users meet the web tools on new, neutral ground, where decisions are made on merit, not marketing spend.
Yes, my ambitions are huge. The roadmap is exciting. But for now, we are gearing up for a March 2022 launch and are looking for 100 companies to join us.
I hope that can be you.
What to do next…
- If you haven’t signed up yet, please do so! The $500 bucks might be the best money you spend this year. Reserve your spot
- Download the Twitter Growth RelevantGuide, to see what we do. (form below)
- See the web pages for some of the web tools: Hypefury.com TweetHunter.io and StrikeEarly.com
- Connect with @of_relevance and with me @eved on Twitter. Come and say “Hi”
