Mercury’s sandals and organic channels

Legend has it that the god Mercury had winged sandals that allowed him to fly. As capital markets tighten up, businesses are going shoe shopping for Mercury’s sandals, and they’re calling them organic channels.

I’m a huge proponent of organic channels. Why? Because I’m a huge proponent of businesses having long term growth strategies. But organic channels are not shoes with wings.

If speed is what your business needs, paid marketing, retail expansion, direct sales and market expansion are all faster ways to grow. They just aren’t as capital efficient.

It’s tempting to write forecasts with organic channels delivering quick value with 0 investment dollars. Here is the truth about organic channels for most mortal businesses.

1. Longer Time to Value: Volume from a new organic channel is going to deliver in the medium-to-long term. This isn’t something where you launch on a Tuesday and expect revenue on a Wednesday.
2. Not $0 channels: Organic channels still require investment. At scale, this investment is a cheaper CAC than paid channels, but they are not free and often come with front-loaded costs.
3. High Impact/Defensibility: Organic channels can be high impact. In the case of partnerships/affiliates, growth can be volatile and should be managed with a portfolio approach. Because organic channels take more time to get up and running than paid, they are often more defensible.

Organic channels are great for delivering long term value and generating profitable growth. However, they take time to build and cannot be swapped one for one with paid channels overnight.

Let’s review some common types of organic channels.

Organic search/ SEO

When executed with the right strategy, continuous content creation is one of the most foolproof ways to grow organically.

Time to Value: Organic search is a notoriously long-term play. If you’re starting at 0, your competitors may have a 20 year headstart on you. And Google is shifting more and more preference towards paid traffic year over year…

If you’re going at SEO really aggressively and you get lucky, it could be a meaningful part of your forecast 1–2 quarters after you have a baseline of 10+ content pieces in market and you’re continuously adding to it from there.

Investment is Not $0: Producing quality content costs money. Oh I know you might have friends at companies who are still giving a lists of keywords to people in third world countries to write articles. But the companies who are really making SEO their bread and butter channel are producing quality content.

You also need a CMS or blog to host the content. If this isn’t launched yet, back up your timeline. Also is not $0. This takes engineering to get set up.

Some companies get around having to produce a bunch of content by launching auto-generated pages or strategies for UGC content. Also not $0. This takes engineering. Show me an engineer whose hourly rate is less than a content writer.

Impact/Defensibility: Extremely high at scale and relatively defensible. Because building a trove of content takes time, investing in SEO is the gift that keeps on giving.

Affiliate/Referrals

Affiliate/referral programs are relatively easy to launch, assuming you can get a little engineering support to get a platform launched (which is half the battle in many businesses.)

Time to Value: Like any channel, this is going to take some time to test messaging, get scale and assess incrementality. (Affiliate/referral channels sometimes just overlap with natural word-of-mouth.)

Not a $0 channel: You’re giving some commission to the affiliate/referrer and often some discount to the customer. You also likely spent some engineering points getting the platform launched.

Sometimes companies purport that influencer marketing is a organic channel. If you’re doing microinfluencers, the economics might look a lot like your affiliate/referral channel. If you’re going bigger, this closer to a paid channel and is probably pretty far from $0 spend.

Impact/Defensibility: This can be a big channel when actively managed. Actively managed means you may need an agency or internal headcount; (not $0!) It is also not a super defensible channel. Your competitor can easily launch a higher incentive program. Customers can refer your competitor just as easily as they can refer you.

Brand partnerships

A brand partnership that is an organic acquisition play (and not a brand play,) is typically some kind of audience exchange. Trading email lists, package inserts, etc. — ideally one for one. Not every partner will do this for free. One brand usually has the upper hand from an audience quality perspective and they know it.

Time to Value: Success here means building a continuous pipeline of brand partners. This will not happen overnight. You will acquire customers this way but it will take time to test into which partners are most effective. There are often diminishing returns from hitting the same brand’s audience over and over again.

Not a $0 channel: Brand partnerships take a lot of internal bandwidth. Every partner is a little different and they can require real negotiation.

It’s unique that a partnership is 100% symbiotic. If a partnership is favoring one brand over the other, there will likely come a day when it is not a $0 channel in terms of above-the-line investment.

Impact/Defensibility: Brand partnerships can be incredibly impactful as a conversion driver because they add credibility. Companies have been built on the enterprise value of exclusive partnership agreements. For this reason, exclusivity (& therefore defensibility) is getting harder to achieve.

The most difficult thing about scaling an organic channel based on partnerships is repeatability. Brands that take the time to build a portfolio approach, where winners and losers are anticipated, can thrive here.

Content marketing

Content marketing distributed across owned social channels and email (and not necessarily with search intent,) can be used in top-of-funnel, nurture and reactivation campaigns.

Time to Value: Getting started is the hardest part because you have a very small organic audience. It can go faster if you have content publishers in your eco-system who can draw on their audience. This strategy really begins to create a flywheel as content is shared and your organic followers grow. This will not happen overnight.

You will also need to test into content types that work best for your audience. The market has generally moved away from long form articles and towards short form video, but every audience is different.

Not a $0 channel: Regularly producing quality content is not free. Paying someone to monitor and engage an owned social channel is not free. Distributing content through content publishers with larger audiences is not free.

Impact/Defensibility: Extremely high impact if you’re producing differentiated content in a high interest category. The audience and following you’re able to build is defensible. Your content is less defensible.

Viral Loop (Often described as product-led growth)

A customer invites another customer to the platform, because the platform is more valuable when more people they know are using it.

Companies often do this by building freemium or community experiences that stimulate share-ability. It’s an awesome strategy.

It’s also reliant on your target customer having a network of other potential customers for your platform. Just because I lead marketing teams doesn’t mean that most of my friends lead marketing teams.

Time to Value: This is a significant product investment. It’s going to take engineers to build and likely a few rounds of testing to understand which features stimulate shares.

Not a $0 channel: There’s two costs to product-led growth that are easy to overlook when considering trading this for marketing spend. First, engineering cost to build. Second, cost to serve freemium customers.

Impact/Defensibility: Extremely high impact if you build the right freemium/trial model. Reducing friction is always one of the best ways to stimulate growth!

Defensibility depends on the business. Friends who are “added” to a platform may feel less conviction for sticking around than people who self-selected participation. When budgets tighten up in families and companies, it’s not uncommon for subscriptions to be pruned of inactive users.