Guest post by Tim Kulbaev
The cryptocurrency market is currently in a steep decline. Token prices are going down, many investment funds are losing their portfolio valuations, and multiple Initial Coin Offerings are holding off on their token sales, since the return of investments is now much lower than it had been just a few months ago.
For some projects, this is a period of stagnation and low activity. They will sit and wait until the market starts picking up again. However, others perceive this as an opportunity — if fewer companies are conducting an ICO, the level of competition will drop too. This means fewer resources will be necessary to achieve funding goals now than when the market conditions were attractive for everyone.
It all comes down to marketing and there are two reasons for that. The first is marketing is arguably one of the most expensive divisions of any business. ICO costs vary from $500K to $1M, with marketing eating up most of this budget. If not properly managed, these funds will be wasted away.
The second is while market conditions were favourable in early 2018, they are not anymore. Time and again, I see companies continue to make costly marketing mistakes that go unnoticed. When you’re riding an upward trending wave of the market, you don’t see the difference between 300% or 400% ROI. Both are great results. However, when a crisis hits, the difference in 100% ROI can’t go unnoticed. At this point, it’s very important to optimize every part of your marketing campaign and make as few mistakes as possible.
As a blockchain-oriented performance marketing agency, we monitor our competition for our own improvement and to avoid the mistakes our competitors make. Below I list a few of the most common mistakes ICOs make in their marketing. If in reading this you recognize yourself, in the following sections I offer actionable strategies you can use to avoid these mistakes, and help ensure your ICO is profitable even when the market is down.
Mistake 1. Misidentification of the target audience.
I’ve been involved with blockchain for almost a year and I’ve never come across a single project that clearly articulates who they want to attract long-term. This misidentification of a buyer persona and their pain points is a common mistake in 90% of all projects.
Remember, if the only advantage of your project is a discount on the tokens, you’ll end up attracting only those interested in a quick profit and not in the project itself.
The ads above use discounts as the main call to action, which in thinking who these ads would attract, those would mostly be speculators. That’s why the tokens from these projects will likely lose their valuation as soon as they hit exchanges, as the majority of the holders will be selling.
A solid no-go for an ICO should be the Airdrops. They don’t serve the long-term goals of the project and really just increase the community size, making it more difficult to manage, eventually inflating the required resources.
Mistake 2. No framework to keep users engaged.
Let’s assume you have cool ads that generate a lot of attention. Now the task is to convert that attention into interest and engagement.
A user lands on a website, skims through it, and leaves… There may be multiple reasons for that, but let’s assume they were in a rush or got distracted. Instead of reading the content intended to convert them into a loyal follower, the user bounced without taking any action. Not only did you waste money on acquiring this user, you will then need to spend even more to bring them back, hoping this time they will have more time to read through your blog or whitepaper, and then hopefully convert into a token holder.
As I mentioned earlier, the reason why most projects are not running their ICOs now is because this approach proves ineffective during the slump times. These mistakes are so critical that campaigns become unprofitable.
We have studied the marketing best practices of one of the world’s most successful companies and adapted it to the blockchain field. In the strategy below, you can run cost-effective campaigns and achieve marketing ROI, even during cryptocurrency market dips.
Attracting the right target audience with the right message.
First, there needs to be a clear understanding of the pain points your project solves. This needs to be clearly articulated in all of your marketing collateral as the core message. This may sound obvious for many marketers, but from the results I see, rarely do entrepreneurs within the blockchain industry put it into practice.
Getting back to our ads above, one of the problems the COTI project tries to solve is the long settlement period of the traditional banking system. There are a lot of people who truly struggle with that. This is why the ad copy, “Enjoy an unbeatable 25% discount on COTI coins” should read: “Enjoy the instantaneous remittance of funds, transferred with COTI coins”. This ad copy catches the attention of users who have suffered from this imperfection in the banking system — your target audience. Moreover, if you manage to satisfy their needs, they will keep using the platform in the long term, maintaining the token price even when it hits the exchanges.
Once the pain point is identified, determine who suffers most from it in order to target relevant visitors. This knowledge empowers you to create ads the right way, as well as set up accurate targeting on acquisition channels. For the COTI project, one buyer persona is most likely new entrepreneurs dependent on a quick turnaround of their funds, since they need to be able to withdraw incoming funds fast enough for further procurements.
What I often see neglected is the data from the campaigns that indicate the direction of the company. If you assume your product will be primarily used by new entrepreneurs, but you see better traction with established companies, you may want to change your dev team’s priorities to better accommodate the needs of those companies. Data doesn’t lie — stop guessing and listen to what your community is telling you.
Ensure users get the full picture of your project.
Before someone becomes a loyal customer of a brand or company, they need to fully understand the benefits the brand brings them. The main task of an ICO is precisely to ensure their followers have this necessary level of understanding. Unfortunately, it’s almost impossible to convey everything about your project upon a single website visit, especially if you’re seeking a higher than average check. There must be a framework to pass the relevant content to your visitors on a continuous basis.
Many marketers use email marketing, which until recently had been the only option. The idea is simple — you ask (or incentivize) your website visitors to share their email address and then send them follow-up emails with relevant content. Email marketing effectiveness is still high, but has been declining recently because of perceived spam character of emails. Nowadays, emails get fewer opens and clicks, and this increases your project costs once again.
We use messenger marketing instead of email marketing. The idea is pretty much the same, but you send the content through Telegram or Facebook messengers. Thanks to a more targeted, better perception of the medium, open rates on messengers can be 5X those of emails, eventually leading up to 5X higher clicks, visits and investments. Moreover, it doesn’t require an email opt-in, so the onboarding process is easier and smoother, resulting in more subscribers.
The mechanics make the marketing way more cost-efficient and significantly increase marketing ROI.
The cryptocurrency market has changed and evolved into a very competitive niche. The efforts of those who don’t try to outsmart their competition with better marketing fall flat, even if they have better ideas or products.
If you’re a marketer, dive deep into your product and become the expert on it in order to perfectly convey how it helps improve people’s lives. If you’re a CEO, educate your marketing team about the fundamentals — what pain points you’re trying to solve and who are those most likely to have this need.
The good news is you don’t need a lot of resources to start. To evaluate your marketing potential, simply run a few test campaigns to validate your hypotheses (A/B testing), identify those that work and start scaling. With solid, data-backed evidence showing there’s acute demand for your product or service, you can easily secure pre-ICO funding that will help you to scale.
There are many more mistakes ICOs make in their marketing — too many for me to cover here. If you feel like you may be making these mistakes, I recommend consulting a professional marketing agency to help you succeed. Initial consultations are usually free of charge and provide a lot of insights about your particular project.
Tim Kulbaev is the co-founder and managing director at Rebound Crypto, a performance marketing agency focused exclusively on blockchain startups at any stage of growth. Tim specializes in high-level performance marketing strategy design, investor retention and investments maximization, helping clients raise over $30 million USD from investors all over the world.