Focus on Value, not Volume – SpotHero Founder on B2C Marketplaces (Part II)
Chicago: During Techweek Chicago Growth Summit 2017, Mark Lawrence, Co-Founder and CEO of SpotHero, shared his views about the challenges of customer acquisition in B2C marketplaces. In Part 2 of this 3 part series, he explains how SpotHero considers offline marketing channels for customer acquisition.
“Besides general channels and best practices, each company needs its unique channel that works exclusively for them.” – Mark Lawrence, Co-founder and CEO of SpotHero
After understanding how listening to customers has been core to SpotHero’s ethos (Part I), Lawrence was asked to elaborate on SpotHero’s online and offline marketing strategies.
“Everything was direct response in the first six years of the company”, Lawrence said. “We started with flyers going door-to-door and thought this was scalable. But, now we’re focusing on certain channels that are easy to track.”
Lawrence said offline marketing is only secondary to their online strategy, since it is harder to track the performance of out-of-home marketing than of direct response. “We use a first purchase survey, we have an attribution model in place, but it’s still not effective compared to direct response.”
To get a measure of how their offline marketing was performing, Lawrence said, “We used brand awareness studies to track the ROI of out-of-home. However, we started doing this only a year back, once we wanted to add a channel on top of direct response.”
As online customer acquisition was still its primary strategy, Lawrence said, Spothero focused on improving its SEO. SpotHero built auxiliary websites like Airport Parking Guides and GasBuddy, which continue to attract millions of visitors online.
“I am really jealous that a lot of people are watching fishing videos online,” Lawrence said referring to fellow panelist, Ross Gordon, CEO of The Catch Co. “Because people are definitely not looking for parking video content. But there are people looking for gas prices. So, we came up with GasBuddy, which gives real-time updates about gas prices. This was a pretty profitable channel for us.”
Lawrence said Airport Parking Guides and GasBuddy had a significantly higher ROI in terms of customer acquisition than paid media marketing, which had very low profitability.
In the next part of this series, Lawrence talks about finding great talent in the B2C marketplace and what advice he would give to early stage entrepreneurs.
To see the full video for Techweek Chicago Growth Summit 2017: B2C Customer Acquisition, go here.
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