Customer Acquisition Channel Matrix

Source: Arindam Paul

Every possible customer acquisition channel can be classified in a 2x2 matrix with the 2 axes being scalability and time to result

1. Scalable and Fast Results: Performance marketing ( Google, Meta, YouTube, etc.) They have diminishing returns with scale

2. Scalable but with Slow Results: Content, SEO, ATL- They have a S curve where initial action takes time but scales quickly after a certain threshold

3. Un-Scalable but with Fast Results: WhatsApp groups, niche blogs, Reddit threads, etc.

4. Un-Scalable and (Painfully) Slow: PR, etc.

While resources should not be allocated to the 4th quadrant, all the others have space while startups are growing and are in different stages of growth.

• 0-1 Stage: Test un-scalable channels to find Product/Market Fit.

• 1-10 Stage: Test scalable channels that give quick results and nail down at least 1 of them while simultaneously squeezing out all juice from un-scalable channels

• 10-100 Stage: Squeeze out all juice from the 1-2 scalable and quick results channels, and start investing significant resources in the scalable but slow result channels.

• 100+ Stage: Mix of 2-3 scalable channels (both fast and slow results).

Ideally don’t try and scale the channels with diminishing returns beyond a certain point and by this time the channels with S-curve returns should start paying dividends

Also, there are very very few scalable customer acquisition channels.

So it helps to keep things simple and not try random new acquisition channels unless they are giving you access to an audience that the established channels don’t.

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