How to build a successful startup strategy.
Unfortunately, the old adage about “build it and they will come” doesn’t quite hold as much weight as it used to.
Many of those “overnight” success stories that we read about are often the result of years of hard work, and a well-timed and executed sales and marketing strategy.
In today’s dynamic business environment, traditional marketing as we have known it, does not always work – especially if you are a start-up, SaaS or a technology business.
Creating a startup strategy that works
It’s vital for businesses to be able to plan and map out how to fuel growth, improve their operations, increase revenues and reduce costs to improve the bottom-line.
One of the main reasons why startups fail is that they suffer from a lack of demand:
- Prospective customers are either not aware of a startup’s product offering
- They have a product that doesn’t solve a problem that enough people are looking to address
Not being able to grow sales can have ramifications for a startup. In the short term, no leads in the sales pipeline mean a lack of revenue earning opportunities and a possible starvation of funds to keep the business going.
Yes, it could be a great idea and maybe you are unique in the market but without cash flow to pay the bills you are fast heading towards a dead end.
Pursuing a poor idea can use up resources and funding, as well as divert energy. Following a poor idea means being brutally honest at some point and looking at an exit rather than hoping for a miracle.
So, one of the first steps to building a successful startup is understanding everything about who your ideal customers are.
And specifically, what is the problem, pain, challenge or opportunity that they are trying to address that your product or service solves better than anybody else in the market.
Recently, CB Insights collected post-mortems on failed startups and from their findings, they were able to rank the 20 top reasons for these failures. And not surprisingly the number one reason was that there was no demand in the market for a startup’s product or service.
For a startup to “find its feet” it’s a good idea to launch to a smaller prospective market that is small enough to be manageable but big enough to afford an opportunity to grow, although it may be at a slower pace.
Normally most startup concepts are applicable only to a small proportion of any population. The “ideal” approach is to target a small customer group, concentrated together in the same place and served by few or no competitors.
If you are asked the question, “Who is your target market – and you reply … everybody!” You are most likely going to waste both time and money chasing too many people who have no interest in what you are selling.
It’s better to start small, with a customer base that you have identified needs or wants your solution and build momentum from there.
Work on your strategy, acquire customers and work out why they chose you, take the early stages of a startup to develop and fine tune your offering.
How do you choose which marketplace to launch in?
Start small but think big. Generally, the smaller your individual customers are, the higher the risk of having to regularly replace them. Smaller companies may rely on you more in a support role and ultimately have limited budgets.
If you are targeting the enterprise customer, then you have a reasonable chance for a longer-term relationship as there is often a dedicated resource to engage with.
Look for clients that you can develop a personal relationship with, that offer an entry into a particular market and who they themselves are prepared to take a risk on a business starting out.
What is your price point?
Once you have a value proposition it’s important to put in the work on finding what is the appropriate price point for what you are selling, target the market at a price within your customers budget range.
Otherwise, if your price positioning is wrong and you underestimate the wealth of the market you will have an ineffective product distribution – nobody can afford what you sell. You need to think about your customer’s budget and what they will pay for your product or services.
Plus, don’t price yourself too low, as price can be reflective of quality – if the rest of the market is much higher in price then maybe customers won’t take you seriously or you could trigger a price war if you are perceived as being aggressive in your entry into the market.
What is the market situation? Is it already swamped, full of competitors and alternatives, is it mature, is the market nearing an end and other firms are trying to exit?
It’s important to learn how to read the market. How do you know if this is the right time for a product to be launched, what other factors need to change to open up a market or what do you offer that can disrupt the market with a new point of differentiation?
When you undertake research of market conditions, you need to collect information on price positioning, branding, competitors and trends. Is the market ripe for change, if there is one particular key competitor – how have they managed to take such a dominant position in the market?
Plus, although you may be the “new kid on the block” as you enter a market don’t forget to think about your own competitor strategy, when others follow you into a market or how to deal with incumbent competitors and their reactions.
When you are looking at a particular market segment to enter, consider whether it has a big enough sales potential to meet your revenue goals but not so big that your impact on the market is so small that nobody notices you.
Compare your points of differentiation to the incumbents in a market, and assess the value that you bring to customers, is it easy enough for a potential buyer to understand how you are different and your value proposition improved?
Do you have insight on whether buyers value the things that make you different from your competitors?
Have a compelling startup story
The internet has redefined the way buyers research and process information when they are going through the stages in their buyer’s journey.
There are so many more stakeholders who will have an opinion on what you have to offer now. Which means you need to have excellent product communication and an effective way to tap emotionally into buyers that makes you stand out from the crowd.
Storytelling is a powerful sales tool to the right audience. Use your story, background, and what you have been through as a startup to tap into a buyer’s emotions.
Customers are far more interested now in the “Why” you are in business, not just the price.
Use these emotional connections to drive your brand values and help identify your product with customers and the way it solves a particular problem.
It is a world where “content marketing rules”, buyers are more likely to trust other sources of information than what comes directly from you.
To build up trust and credibility, content marketing can help shorten the sales cycle.
But there are some steps to follow:
- Engage earlier in the sales process with useful information and an educational approach
- Build trust by providing value rather than making contact to only sell
- Be visible and proactive online when businesses are searching
- Think about your offering as a solution to a particular problem
- Give thought to the language that a prospect would use to search on that problem.
- Align your marketing messages with the stages in the buyer’s journey
- Try to remain “top of mind” when businesses are at the decision-making stage by establishing a role as “thought leader”.
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