Marketing Channel Arbitrage

A breakdown of how Plated (meal kit company) acquired their first customers and scaled through identifying underpriced marketing channels, particularly in the early days of digital advertising.

Early Customer Acquisition Strategy

• Started with basic website chat functionality
  • Founder personally chatted with visitors for hours
  • Used conversations to understand:
    • How customers found the site
    • What parts of website made/didn't make sense
    • What would convince them to buy
  • Incorporated feedback into copy and signup flows in real-time

Facebook Marketing Evolution (2012-2016)

• Early Facebook was extremely cheap
  • Platform had just gone public in May 2012
  • Could drive 100 visits per day on $5-10 ad spend
  • Some companies got $50,000 free ad credits
• Lifecycle of Facebook marketing tactics:
  • New tools would work great for 1 month
  • Decent results for 3 more months
  • Eventually stopped working entirely
• Treated customer acquisition like a trading desk
  • Constantly arbitraging cost per click/impression
  • Looking for tactics others weren't using yet
  • Quick to adopt new Facebook features (audiences, lookalikes)

Shark Tank Impact (2014)

• Normal website traffic: ~50 concurrent users
• During show airing: Jumped to 50,000 concurrent users
• Filmed summer 2013, aired April 2014
• Provided massive exposure and customer acquisition boost

Competition Insights

• Only 6 companies ever reached significant scale
• All major competitors started within first 2 years
• Companies starting after year 3 didn't achieve scale
• Philosophy: Focus on customers, not competition
  • Understanding and serving customer needs
  • Let competitors figure things out on their own
  • Success comes from customer service in large markets