by Joe Romeo • 6 September 2020
Launching a business is hard work. You’re juggling product development with paying suppliers, managing freelancers and internal staff, and you still need to go out and find customers. In 2019, there were 62,462 new businesses launched in Australia alone, that’s 171 new businesses launching every. single. day.
It’s clear that the days of ‘build it and they will come’ are long gone. With competition as fierce as ever, promoting your new business effectively remains the most critical of steps to reaching the glory days of break-even, and beyond.
Despite this, most new businesses make the same marketing mistakes in their early days. Armed with a hefty launch budget or a fresh investment round, they swing for the rafters on expensive acquisition channels like Google and Ads, long before they’ve found the right product-market fit. Before you know it, that once golden budget has vanished, clients have churned, and you’re left scrambling to find that next ‘sugar hit’ of instant revenue gratification - without the bankroll to back it up.
What’s my one golden rule? Don’t waste a lot of money on advertising unless you can first grow for free.
Free is a funny word in 2020. Just last year Freedom House recorded a 14th consecutive year of the total decline in global freedom. Netflix, the largest streaming company in the world, has stopped offering the first month free on all their subscriptions.
You might even argue that nothing is ever truly ‘free’, there’s always the time and opportunity cost, particularly with traditionally free channels like SEO and content marketing, wherein all likelihood you’d still need to pay for an expert’s time. Comparatively, you’re still avoiding the coin-operated-machine style of promotion - like paid ads, where the money generated is often directly correlated to the leads coming in. Turn off the tap and the traffic stops, too.
Thankfully, in a time of shrinking budgets and growing competition, there are still effective marketing channels that are the perfect way to test your product or service offering with real customers, without breaking the bank. Think SEO; content marketing, peer-to-peer referrals; and review generation, we'll touch more on that later.
Product-market fit is when your product or service satisfies the specific needs of a particular market or customer group. For example, you’ve just developed a fantastic plant-based protein powder that is going gangbusters amongst the Melbourne Vegan community. Once you’ve hit this sweet spot, that’s when you’re ready to start really investing in ads. But here’s how to get there, first.
So, where should you begin? Let’s say you’ve just completed your beta or tested your first samples from the manufacturer and you’re ready to go to market. You’ve thought about your desired audience, you have a hunch who they might be and where they hang out, and you know it’s just a matter of time before the sales roll in.
Ultimately, what you have is a hypothesis and now is the perfect time to test all your hard-fought research in the real world. Testing this theory doesn’t need to cost you a small fortune just to say “Ok, that didn’t work”.
A fantastic product offering should be able to stand on its own two feet. Period.
Here’s where you should be spending your time and (small amount of) money on growing your business until achieving product-market fit.
I may be more biased by saying this is my favourite channel, but SEO is a surefire way to test your product en masse without breaking the bank. You’re not paying cost-per-click, so your potential reach is only limited by the breadth and depth of your offering and supporting content. SEO is often a fraction of what you would pay for the same amount of Google Ads traffic, but it takes time.
Getting started early and being prepared to stay the course is an easy way to reduce ad wastage when you don’t yet know if your audience will take to your offering. So put your product out there, optimise your site for some relevant keywords and see how your audience responds. Look closely at behavioural metrics like bounce rate, average session duration and pay close attention to your funnel (naturally). Are visitors performing better, or worse than you expected? Consider this test a pilot of how larger audiences will react with your product and act accordingly.
There’s no better compliment for your business than a referral from an existing customer to someone within their network. Think of this as micro-influencing, and it works. A recent study shows that 73% of those surveyed were likely to act upon the recommendations of an average person. One way to capitalise on this early in your product journey is to build in referral incentives to your product or service offering where it’s most natural. This could be after a user’s first purchase, after their first visit as part of a follow-up email, or wherever it feels most natural.
Offering some sort of incentive for the referrer and the referee makes one party a keen brand advocate, and the other respectively enticed to trial your product or service at a discounted price. Although the amount of peer-to-peer referrals ultimately comes down to your industry and incentive on offer, usage of this channel is a healthy indicator of your customers having a great brand experience and agree that your product solves their needs, as well as others around them.
How well your users and customers review your product is another secondary measure you can use to determine product-market fit. It’s worth getting into the practice early of requesting a review at key touchpoints, but especially upon completion of service or product delivery. The easiest way to generate reviews is to put the request on autopilot; inbuild it into your automation via email and integrate with trusted third parties like Google My Business and Trustpilot.
If you have a review profile that you can be proud of, you can see that your product is servicing your audience well. If not, listen to the feedback, respond to the reviews and most importantly, take action. You’re getting a direct and often free, peek into the true needs of your audience. Don’t let it fall on deaf ears!
I wish it was as simple as the stars in the sky aligning and pointing to a huge neon sign flashing ‘launch’ - but we marketers are rarely afforded such luxuries. Ultimately it is down to using the key data points you have collected to show you the true path to success.
I like to work towards achieving 5 key milestones:
Ultimately, this is about making sure your business has the foundation to provide confidence that your hard-earned money is not going to waste, or worse, to pay for Mark Zuckerberg’s 33rd holiday home. When your business can grow for free, you’ve received validation that your idea is worth it, that it’s wanted, and that the world wants to hear about it. Then, and only then, are you ready to tell your story.
If you have any questions, comments or would like to chat, feel free to reach out via our duel of doves community.
duel of doves is a curated community, created to encourage thought-provoking discussions through connecting and collaborating with like-minded people. A professional online home away from home, sans the office politics, where we can be ourselves and get sh*t done.
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