All were remarkably candid about the challenges of acquiring customers in the cost-efficient manner dictated by the current environment.
While there was some debate about the return on investment in "marketing" there was complete agreement on the importance investing in acquiring customers. The difference, the panel agreed, dwells in being analytical about comparing the cost of acquiring a customer to the lifetime value of same. While acquisition costs are declining, there are pitfalls, such as overpaying for Google Adwords. As Nabeel Hyatt put it, in an auction system it is easy to overpay, especially where there is always some new company with $10,000 to spend trying to build market share. Even if they go bankrupt trying, they will just be replaced by another company who is equally unconcerned about losing money on each customer in the hope they will make it up in volume. Brian Halligan pointed out that there is no substitute for putting "remarkable content" on one's Web site and thus making it a magnet for customers. Hubspot hired a former New York Times reporter and a musician to create content for their site. Halligan did allow as to how "turning up the knob on Adwords" could be effective for a month or so, but that was was not a sustainable practice in the long run. Of all the panelists, only Bill Lucchini was bullish on paid search, perhaps illustrating how it works better for a company such as Intuit with deep pockets.
The freemium model was popular with the panelists. While customers may not be sensitive to the difference between $0.99 and $3.99, offering something for free can increase the number of downloads by 15x. Offering multiple levels of features at different prices can alleviate the inevitable problem of over-charging some customers while undercharging others. Hubspot offers a free Web site analyzer which generates an email lead from a third of those responding.
There was a lot of discussion about metrics, especially the importance of determining the cost of acquiring a happycustomer. Several speakers said their sales compensation plans included some sort of clawback on commissions for customers who signed up but later dropped the service, thus incenting the salespeople to make sure the customers understood what they were purchasing and were a good fit for the product. Doug Levin mentioned that sales at Black Duck started to take off after they methodically deconstructed the sales process and found 64 discrete steps that could be improved.
In summary, customer acquisition requires a combination of talents: creative, which can be outsourced, and analytical, which needs to be closely aligned with the business. It is an area that is only ignore at one's peril.