SOP 165 — Pick a second acquisition channel

1. The constraint and what graduates it

Item	At this stage
The constraint	With a single way to get customers, lead flow swings; this usually happens somewhere in the 1 to 2 million a month range
To graduate	Pay for a second acquisition channel out of a referral process you track; segment how you nurture leads, by lead score; and choose the closest platform, or else a new one of the four lead channels

By now you know one channel pretty well. The trouble is volume. When you're small, a move of a couple of percentage points barely registers; when you are big, that same couple of points swings the whole business. In the example given, lead flow down 20 percent means four salespeople and their calendars.

The four lead channels, the ways of reaching people, are set out on SOP 12 — Run the four-channel grid.

2. Why the second channel is worth the risk

Adding a second channel is called one of the hardest transitions in business: one of the biggest risks, with one of the highest upsides.

It kind of does both at once: lowers risk and raises upside. Going from one channel to two splits where your customers come from, so the business stops relying on one thing. And if the first channel holds steady (the staffing section covers how), everything the second brings is extra: you can double the business and make it less risky at the same time. That is why it is ranked one of the most powerful moves a business can make.

There is a reason to hold off until this stage before making the bet: it will drain resources, and it will take far more time than you expect.

3. Treat it as an investment

The framing preferred here: suppose someone offered you, for 500 grand, a second acquisition channel a year from now, profitable and equal to the one you have. At this level you should take that trade; there is basically no way you would turn it down.

Yet the same owner runs a first month of ads on a new platform, spends 10, gets nothing back, does it again the next month and decides ads do not work for them. So do not expect it to feel like the trade. What it is said to look like, month by month:

Month	Spent	Made back
1	10	Nothing
2	10	Nothing
3	10	Nothing
4	10	Nothing
5	10	5
6	10	25
7	10	50

In that last month you recover every loss so far, but it took eight months, or nine, to get there. The table's sequence runs seven months; the time put on it is eight or nine. This page does not settle which reading is right. Put briefly: expect a 12-month delay before the return, a longer span than the one above (see the flag in section 10); a second channel doubles acquisition; it can reduce risk.

Move the dial one stage at a time. Work down the pipeline in order. Are you getting clicks? Are you getting opt-ins? If opt-ins come in but nobody schedules, improve the offer on that page. Once they schedule but do not show, improve how you nurture leads. Keep pushing it along until you are on the phone with the right people; at that point you have built a second channel.

Keep going while you can see progress. When one business built outbound as its second main channel, the team saw the money going in and zeros in sales, again and again, but not the progress under them, because they were not close enough to see it: getting the list, then getting pickups, then a script and offer that booked calls, then getting people to turn up. The view given: as long as you can see progress, keep going.

4. Put a zero-to-one person on it

Recognize, in the view here, that a lot of the team you have now are great at growing a business and iterating on what exists. They may not be people who can go from zero to one. On a new initiative, such as spinning up a channel, it is best to put someone good at zero to one, who can create something from nothing, rather than a five-to-ten person who likes to iterate on an idea that already exists. Ask the second kind to make something from nothing and they get very anxious: they say it will not work, and they talk doubt into it. People who keep doubting anything new are probably not zero-to-one people.

5. Pad the cash before the bet

The bet is big, so make room for it first. The two main sources of padding are referrals and segmented follow-up. From a cash-flow point of view, you get more out of what you already have, your customers and your leads, and then put that cash into the second channel.

You should already be scoring leads at this point. If you are not, strongly consider scoring them by who they are, what they have done and where they came from; SOP 84 — Score and route inbound leads has the method. Once leads are scored and you are feeding them to your best salespeople, stop blasting the whole list three times a week: with, say, six pockets of leads, work out which messages go to which leads.

6. The seven referral plays

These are offered as plays that were run and worked, not theory. In order:

One-sided: pay your average acquisition cost. Owners happily pay the advertising platforms something like $3,000 for a new customer, yet will not pay their own customers $3,000 for one. A referred customer is way more likely to stick and way more likely to refer someone else, says yes at higher prices, converts better and stays longer. So check your acquisition cost and offer the referrer that: not 20 percent, just what you would pay anyone else. It works surprisingly well.
Two-sided: split the same amount. Liked much better than one-sided, in the view here. The math is the same, split between two people. Think of it as relational capital: if a friend knows the person recommending something gets a big payout for it, they might wonder whether they are being used to make money, and it looks less cool. Told instead that coming through you gets them 20 percent off, which they cannot get anywhere else, they take it as a favor: the friend gets 20 percent off, the referrer gets 20 percent of the revenue, and everybody wins.
Ask on the sales call. In one company, a rep who got the same number of leads as everyone else doubled the top salesperson. What he did: he asked prospects if they want to bring somebody else. It is the kind of basic step teams forget.
Trade a discount for referrals. When someone asks for, say, 10 percent off, do not hand it over for nothing: give it once they bring a friend or two friends, or three leads, and those people come over. Or work from the one-sided figure and go one better: you want 10 percent, you get $3,000 off when you bring somebody in.
Referral events. Run them on a cadence. You can hold one a quarter: bring customers or clients together (a lot of times they get value from meeting one another) and ask them to bring a friend. This has worked exceptionally well for local businesses; if you are national, maybe two or three times a year, on the same idea. In one practice here, a lot of times most of the businesses it is run with can get their entire month of sales from this one event.
An ongoing program, with short pushes. Keep talking about referrals, consistently, and add special times; this applies if you sell to consumers. One kind is days that double the referral bonus: say, all through October, a referral made on a Friday earns double. Run it all the time and it stops mattering, so a small promotional cycle for when you push referrals gets more to happen.
An unlockable referral bonus. Especially if you are a national business, offer a referral bonus customers unlock, with some kind of status that comes with it.

Plays 3 and 4 are oriented to the sales team. Put together, they can build a very strong referral program, and the point of all of them is the cash you will put into the new channel to get it live. What to do once a customer has named a friend is SOP 16 — Keep the referrer in the conversation when you contact their friend. Earning the referrals in the first place, by giving more value and then asking, is SOP 284 — Earn more referrals by giving more value.

7. Segment how you nurture leads

A marketing-software company is quoted for a statistic: segmented email marketing gets a sales increase given only as "791 per", compared with lists that are not segmented. What the 791 is per: not established on this page. The figure is that company's.

If you have only one or two segments, you could probably at least double or triple what email brings in by writing more emails without emailing anyone more often: each person gets messages more specific to them. That is not spamming your list. With seven categories, people get far more targeted messages, and the response goes through the roof, it is said.

Email is called the highest-returning advertising channel in existence right now, above every other channel. Its return on ad spend is put, with the hedge "I think", at between 36 and 45 to one, depending on where you look, dollars in against dollars out.

So the referral plays bring cash from customers and segmentation brings cash from leads; both then go into the second channel.

8. Choose the new platform in order of risk

The framework offered runs in order of risk, or of likelihood: the move most likely to work, and to show results fastest, comes first. Say you run paid ads. Keep the same lead channel until the last step:

Order	The move	Example given, and why it sits here
1	Same platform and placement, a new audience	Meta newsfeed ads with new targeting added, nothing else changed: you keep doing what you know
2	Same platform and audience, a new placement, once targeting is maxed out	Meta story ads instead of newsfeed ads, the rest the same. A little harder: a new medium, such as vertical video or the story format, or tile ads on YouTube, is a bigger jump in skills than finding another audience for the same material
3	An entirely new platform, with the closest ad type	From Meta to YouTube pre-roll ads, which are kind of similar to newsfeed ads: both interrupt someone just before they consume something else
4	Repeat the cycle on each platform	With Meta maxed and YouTube started, run the same process there (community ads, sponsored video ads); once that platform is maxed, go to the next, and the next
5	Finally, a new lead channel	Once you are on all the paid platforms

Why the order matters. One business jumped from paid ads on Meta straight to outbound, a new lead channel, and that is called the riskiest move you could possibly make: it took a whole year before outbound reached 50 percent of revenue. There were many more levers that could have made more money, at lower risk and faster. Unless you want your whole team ready to strangle you for a year, the strong recommendation is to follow this order, which is the practice now.

Much the same widening order, audiences before placements before platforms, is level five on SOP 54 — Climb the seven levels of advertising.

SOP 40, section 5, ranks the kinds of new in the order of steps 2, 3 and 5 here: a new placement, then a new platform with similar media, then a new method. A new audience on the same placement, step 1 here, is not one of its rungs.

9. Staff the new channel

The biggest mistake seen here. A lot of times people start the second channel by taking the people who run the first, the channel that works and fuels the business, and asking them to start the second one too. Do not split resources. The team's rule, in plain words: no new person on a new channel, and no one person on two initiatives.

Backfill first. If someone really good runs the first channel, have them backfill themselves before they start the second: make sure the person who takes over can run it and hit the same KPIs they have been hitting, and only then move them to the new channel.

Why not a new hire for it. Putting someone new on the new channel is not favored in one practice here. If the channel is not working, it is very hard to tell whether the channel or the person is the problem when you have never worked with them, because you do not know what they are good at. So take real care to put the right people on the new channel.

Stay close to it. The view given: as founder or chief executive you should probably be pretty involved in spinning up the second channel, both so that it succeeds and so that, if it is not working, you know what the real problem is. Allow more time: it is very unlikely to happen in 30 days.

Writing the ads and the outbound scripts for the new channel is not covered on this page.

10. The bottom line

At this stage you go from volatile lead flow, with only one way to get customers, to funding a second channel through a better referral process and more segmented follow-up. That builds padding: more customers in, more cash flow, so you can make an investment that will take six months, maybe nine, to become fully profitable and reach the level of the channel you already have.

Flag: how long the new channel takes to pay. Three spans are given: eight or nine months before one month makes back the losses (section 3); a 12-month delay expected before the return (section 3); and six months, maybe nine, to be fully profitable and level with the existing channel (above). This page does not settle which reading is right.

11. What this page does not cover

The other functions at this size are on SOP 164. Once the new channel is chosen, running it belongs to that channel's own pages; paid ads, for example, begin at SOP 35 — Choose the first paid platform, and cold outreach at SOP 27 — Build a cold list.