Build an Online Sales Engine for your Startup

Startups depend heavily on early sales traction to get the interest of Investors. Still, most Startups may not know where to start with online sales. This covers content strategy, SEO strategy,  Social Media strategy, Advertising strategy, and lastly to measure your performance for all of the above, we will also cover your Metrics.

Tools & Skills Required to drive Online Sales

Do note that this can be a full-time job in itself as there are many aspects to cover in the entire spectrum of online marketing. Try not to let this take over or distract you from your important business activities.

Advertising Platforms

Google Adwords - To target people when they've already decided to purchase.

Facebook Ads - To target people based on their demographic information like age, geolocation, and interests.

Skills

  1. Know how to write articles that appeal to your target market - knowing your product helps
  2. Google Analytics basics - not too difficult to learn
  3. Know how to maintain a website & blog

Website Tools

  1. WordPress (free & paid) is good for creating websites and blogs at a low cost, however, there is a small learning curve.
    1. Yoast is a good tool on WordPress to ensure your website SEO is on track and makes sense to search engines. It helps with writing and SEO in general.
  2. Wix and Weebly are easier, but paid alternatives to WordPress.

Website Tracking/Analytics software

  1. Google Analytics - to understand how people behave on your site (bounce rates, time spent, ads performance, etc)
  2. Google Webmaster Tools - To track what keywords people are currently using to find you
  3. Moz - Rankings tracker (if you can afford it or if it makes sense at your Startup stage)

SEO to Sales Strategies

There are two strategies I would like to highlight here. First is to have quality content, and second is to advertise.

Why Do I need quality content?

Content is king in the search engine world. 10X more so if it is quality content. Google's algorithm basically tries to find the best quality search results for users, and the only way it can reliably do that is to show users quality content. How does it know what is quality content reliably (filtering out cheaters)? Google identifies content that is viewed more often, multiple times by the same user, and that is shared. It also looks out for content that people spend more time on, and content that people do not close immediately. In the end, it is all about showing users what they are really looking for in a search.

The way to go is to:

  1. Create a website with the right keywords and content your target audience is looking for. For example, if you are a music subscription service like Spotify , you should have "music streaming" or "music subscription" to help your target market find you online. Write as naturally as possible with the keywords intact, and Google will rank you fairly.
  2. Create a blog and ensure you cover related topics to your main keyword, and also other related keywords like "top music" or "oldies music" to cover broader audiences that may be interested in different parts of your product. Blog regularly, at least twice a month, to start seeing results in your search engine rankings.

Why Advertise to boost Sales (based on the latest Google search engine updates)?

Google and Facebook tend to reward those that have more traffic in the first place, as their algorithms think that something that gets more traffic is popular and therefore the right answer. So, to take advantage of this, boosting your traffic artificially through advertising should trick Facebook and Google's algorithms into thinking your site is popular - especially if it is cross-traffic e.g. from Facebook to Google. This works based on engagement rates like click-throughs, bounce rates, shares and likes - so fake or misleading content will not work! It has to be original, interesting content.

Artificial traffic brings better SERP (search engine results page) rankings

There are plenty of other usual reasons like if someone has seen an advertisement, they are more likely to recognise it - that's called brand awareness. There's also search engine visibility - where the more times you appear in a search result, the more popular people believe you are.

sales startup seo content marketing guide

Advertising to Sales strategies

  1. Advertise your organically popular content on Facebook to boost your traffic and therefore sales potential. This will create a huge amount of signals for Google to see that people are interested in your content, and if it is quality content, Google will rank you higher. The better you rank, the more sales potential you have as the top-ranked websites get a huge (and unfair) portion of the internet traffic. The top 1 search result often gets 50% to 90% of the traffic in a search.
  2. Optimise your advertising costs by targeting the right people. For example, you can target people that follow a competitors page, or a related industry page. You can also target people by their education background, job description. A good method is to test at least 5 target groups simultaneously and to bring down the costs by finding the groups that cost the least.
  3. You also want to make sure that the bounce rate is low and that the average browsing time is high - which signals interested and engaged users to Facebook & Google. This is how they ensure you are not cheating their algorithm. It sends good signals to them and therefore they will push your rankings up vs. your competitors on Google search results. To do this, you need to write, relevant, interesting content for your target audience. If you are having trouble doing this, do look for freelance content writes or 'ghost writers'.

Advertising budget & Return on Investment (ROI)

How much to advertise generally depends on what industry you are in. Generally, industries with less or niche demand will have cheaper advertising keywords and industries with high margins or high competition will usually have more expensive keywords. I know 1 to 3-year-old Startups that advertise from RM500/month to RM50k/month, so there is really no rule of thumb here on a budget. However, you should be aware of your CAC/LTV to ensure you are making money. Those that advertise 50K or more a month usually already know they will cover it or get multiples of their investment in return beforehand.

CAC - Customer Acquisition Cost

($) Total sales and marketing expenses / (#) new customers acquired = ($) CAC

This is quite straightforward. Basically, it is the amount of money you spent to get 1 paying customer.

LTV - Lifetime Value

($) Average gross margins * (y) average number of years a customer continues to buy= ($) LTV

This one is complicated and depends on your business. Generally, it is how much in gross profit (after product costs) the customer gives back while they are still buying from you. For earlier stage Startups, this is tricky to calculate as you may need to know after 2-5 years how many customers stayed with you for that 2-5 years. So, for now, you can just estimate that number or use a minimum number of years a customer stays with you.

LTV/CAC Ratio

The ideal ratio is 3:1 LTV/CAC.

It means that for every dollar you spend to acquire a paying customer, you get back 3X in value. So if you've spent $1,000,000 to acquire all your paying customers this year, you will have generated $3,000,000 in gross profits this year. The reason this is important is to ensure you still have $2,000,000 return on investment (ROI) after advertising costs. This $2,000,000 is important to pay your Operational costs like Staff costs, rental, etc. Hopefully, after that, you have another $1,000,000 left over to grow your Startup further to say you have a 33% Profit Margin. Depending on different business models, you may aim for different Profit Margin. Marketplaces tend to have less than 30%, with some as little as 1% if the volume is huge enough (like payment solutions Startups). For SaaS Startups, this can get as high as 70% as sometimes there are very little fixed and variable costs - but typically the volume would be less vs marketplaces.

The number of sales needed can be huge in order to get an LTV/CAC of 3:1. So, for most Startups starting out on this, I do recommend testing the market with a ratio of at least 1:1 - meaning that you do not lose money even after spending on ads. Any ads providing a ratio lower than this should be cut off immediately as you are bleeding cash. A generally good idea is to start small and double down when you get good results on certain ads or keywords.

Tracking & Optimising

sales engine seo analytics & optimisation for startups

Google Webmaster tools (a.k.a. Search Console) and Google Analytics are the key tools to ensure you learn and understand your website traffic data. Again, bounce rates should be low and time spent on site and click rates should be high. Once you are tracking your Google Adwords and Facebook advertising clicks to your website, you should also track Sales Conversion rates - where an advertisement converts into sales (or enquiry for offline transactions).

The SEO & content marketing process

  1. Research keywords - find keywords your target audience searches for through Google Adwords planning tool
  2. Use these keywords on your website, blog, and advertisements
  3. Monitor your bounce rates, time spend on site, click rates and sales conversion rates
  4. Analyse your results - know your poorest and best-performing pages, keywords, and target audiences.
  5. Repeat the first step according to your results. Remove poor performers and spend more on top performers, keep looking for better keywords, and so on.

What's next?

I hope the above gives you a good overview of how SEO & content marketing works and how it relates to Sales for IT-based Startups and pretty much most high growth Startups today. This is a repetitive process, and there is a lot to learn and test in the process. At the end of the day, it is about building an effective online-sales engine to drive customers to your doorstep. Build up the sales, which will effectively help you raise funds easily - as nothing speaks more than revenue traction.

Do give me a shout in the comments below if you have any further questions or if you feel I missed something.

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Written by Ben Lim

I am the Founder & Managing Partner at NEXEA, a startup investment group in Southeast Asia. We have invested in the idea stage to pre-A Startup investments around the region.

We fund the best Founders and provide them with an edge via mentoring & networks by the best investors.

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