Why ICOs are so expensive and how to cut costs with  Messenger Marketing.

There are various opinions on how much you would need to spend on a successful ICO, but based on the feedback we've gotten from our clients, a successful ICO would cost you about $1 million USD, with the majority of it being spent on marketing. The raised amounts with an average of $17 million, usually make up for that loss, but what if they don’t?


The $1 Million USD threshold cuts off expectations of those who don't possess such amounts or are just not willing to invest that much. The question that pops up immediately is whether there is a way to do an ICO cheaper? I can tell you right away that there is. But before that let's try to understand the reasons for ICO marketing costs to be so high.


Unreasonable waste of resources


New technologies that emerge, are seldom the ideal from the beginning on. For instance, Google is not the first search engine, but just a better version of all previous tools, such as Altavista and Lycos. The same thing applies to ICOs. It all started off with just basic tools and direct approaches, but as the industry matures, new and improved mechanics emerge, making ICOs more automated, efficient and low-cost.


When it comes to costs, the two priciest areas of ICOs are investor outreach/lead generation and community management. In this post I'll specifically talk about the first one, but a proper community management can reduce your costs even more. So if you can't wait, get access to our video training to learn more about it.


The reason why investor acquisition is so expensive is because the conversion rate from the first contact to an investment is extremely low. Email marketing is still popular and considered to be one of the most effective marketing tools, with open rates of 21% and CTR being at 3%. Assuming an average conversion rate from a website to investment/sales is 30%, you end up getting only 18% of sales. That means out of 2000 visitors to your website only one will invest in your ICO. If your spending for this funnel is $2000, your average check needs to be $2000 too in order for you to break even.



That being said, your sales funnel after subscription needs to be so well optimized, in order for you to hit a positive ROI, that it is almost impossible to achieve.

The reasons for such a low response rate are obvious - people are tired of thousands of emails they're getting daily, these emails are considered intrusive and annoying.

There is a scientific term for this, called "email fatigue". So when you ask your website visitors to leave their email address for something that catches their attention, they weigh how valuable that information is against the spam they'll then be bombarded with and in many cases they just leave the page. The solution is to use new technology that people don't associate with spam.


Making use of Telegram bots


I found one study that clearly articulates the idea I want to convey - people switched over from Email to Messengers. The study is quite old it is from 2015 and that only means that the opportunity has been there for several years and nobody in the ICO industry leveraged it to its full extent. Until now..


Telegram is well known to the ICO industry and everyone use it for news, updates from ICOs, to chat with other community members. There is one more thing about Telegram which ICOs can use for their own benefit - bots.  Until now they have been only used for analytics, community management, response automation and the likes.  But why not use Telegram bots to drive your token sales?


With one million dollar budget, the savings could be hundreds of thousands of dollars.

Assume you run a marketing campaign that brings a lot of targeted and interested users to your website. You can increase the conversion rate from the website to subscription by asking them to join your Telegram bot instead of emails. Compare 90% open rate on Telegram with 21% in email marketing. Integrating only this mechanic that doesn't require any deep knowledge will allow you to cut costs on average 80 fold.


Of course, a marketing campaign itself can be either good or bad. If your traffic managers target irrelevant audience, you simply won't be getting any traffic to your website, so there will be nobody to subscribe and the budgets will again be wasted. But targeting is a separate topic which can add a layer of cost reduction to your marketing. If you're interested in learning more, you can watch our video training below:

Because messages are not perceived as intrusive on Telegram, you have a great chance to have your message read and make the recipient enter the sales funnel, thus potentially increasing the conversion rate to investment from 0.19% to 15%, which is a quantitative improvement of 7794%.


 This leads to a drastic reduction of marketing costs and hundreds thousands of dollars rescued.

One might argue that they don't use email marketing and all the communication with the community happens via dedicated Telegram group. Well my answer to this is that this is even worse, because a group doesn't allow you to tailor your messages to specific cohorts of users and the communication efficiency drops drastically, lowering your investments.




As with Alta Vista and Lycos that failed to sustain their first movers advantage, many ICOs won't be able to raise the funding they expect if they won't embrace new marketing approaches. I hope that you now have fully realized the importance of messenger marketing for ICOs.


In the next few articles we'll walk you through other cost-saving tricks within ICO marketing including community management and customer journey map. If you want to know more about ICO marketing we encourage you to watch our video training on the instantly implementable ICO marketing strategy that helps decrease user acquisition cost and convert users into investors.


About the author


Timur Kulbaev is a sales and marketing entrepreneur. Due to his interest in blockchain technology and as a result of observing existing overpriced marketing offers, he realized that there's a need for performance marketing expertise in the industry and  created Rebound Crypto.



About Rebound Crypto:


Rebound Crypto is the industry's first innovative performance marketing agency for blockchain startups at any stage of growth that allows to reach necessary objectives with affordable price and minimum risk. ​With an ever growing competition among new technology companies, ICOs, and media channels in the space, we realized the importance of educating the community on performance marketing to help facilitate and grow the revolutionary processes behind blockchain.