When you launch a new product, service or business, you’re generally making a few assumptions (hopefully educated guesses) on things like:
- Target Market
- Their Problem
- Your Ability To Solve That Problem
- Your Pricing
This is normal. Even if you interview potential customers before launch, what they SAY (before you launch) and what they DO (after you launch) is dramatically different.
I’ve learned this first hand many times over the years. When there’s real money on the line, it’s funny how someone’s behavior can change.
So how do you get something off the ground and get that initial traction (your first few dozen or few hundred customers)? The short answer is that you come out of the gate assuming you’ll fail.
Pessimistic, hey? Actually no. And here’s why…
My friend David Cancel always assumes every decision he makes is wrong and aims to validate it against customers or data ASAP. And that’s the approach you’ll want to take, too.
There are 3 stages in any customer acquisition strategy you’ll want to follow that will give you the data you need to validate your assumptions, tweak those assumptions and then scale up your acquisition efforts.
Here are those stages.
Stage #1 — Gather Data
This is where you start your lead and customer acquisition process. If you’re using “free” channels like inbound marketing, make sure you ask for qualifying data (to validate your assumptions about who you’re selling to) when someone signs up or buys.
The trick here is to capture 1–2 data points in the signup process without affecting your conversion rate. You might ask for data such as:
- Company Size
If you’re using paid acquisition methods (AdWords, Facebook Ads, etc), this is where you “go broad” (especially with Facebook Ads) and target people who follow a range of interests and influencers related to your product or service. Job titles work well here too (assuming you’re B2B).
You can then use CPC, CPL and CAC data from Facebook’s Business Manager to look at which audiences converted best. This is a fast and relatively low cost way to validate your assumptions around your buyer persona.
Stage #2 — Act On Data
Once you’ve spent some time (typically 30–90 days) gathering data on who you THINK will buy your product, it’s time to slice-and-dice that data at a campaign level to answer two questions:
- Which of our assumptions were correct?
- Which of our assumptions were wrong?
Now you want to kill the campaigns that invalidated your assumptions. For example, if you ran Facebook Ads to people interested in puppies and that campaign had poor CPC, CPL or CAC data, you’d pause it.
If you were using inbound marketing and content marketing to attract an audience of puppy lovers but you see they’re not actually moving down your funnel (signing up for your newsletter or purchasing), you’d stop targeting and creating content for puppy lovers.
Stage #3 — Scale Up
This is the fun part that honestly most founders either take too long to get to (because they don’t do stages 1 and 2) or never actually survive long enough to enjoy because they run out of cash or patience.
Now it’s time to take your validated assumptions and scale them up. If you’re using paid customer acquisition, it’s time to implement retargeting via Facebook Ads and Google’s display network to to turn warm leads into customers. It’s also time to increase your PPC spend on the keywords and audiences that you validated in stage 2. It’s also time to start building lookalike audiences based on your list of paying customers.
If you’re using inbound marketing and SEO, it’s time to increase the volume of content output (without sacrificing quality, of course). It’s time to double-down on your guest posting and link building from high D.A. sites, etc.
This is all simple stuff, but the key is to not skip stages 1 and 2. I can’t tell you how many founders I’ve seen in Inner Circle (my private mentoring group for founders looking to scale up their businesses) who are insanely smart that just assume they know their market from day one.
I don’t know any founders running successful companies that absolutely nailed their buyer persona or market on day one. Most of them didn’t even nail it in year one.
When we launched BigCommerce, we played in the SMB market from 2009–2014. But when we shifted to the mid-market (companies doing $1-$20M in e-commerce revenue) around 2015, things really got interesting.
That was essentially 5 years of serving (what turned out to be) a less-than-ideal market (even though we have tens of thousands of SMB customers).
It takes time, patience, data, tweaking, testing and iterating to figure it out.
You might get it within 90 days or it might take you 90 weeks. Whether you make it or not will be determined by your patience and your ability to collect data that gives you a validated understanding of your ideal customer.
|About Mitchell Harper
Mitch is a 7x company founder, advisor and investor. He is best known as the co-founder of BigCommerce. His companies have generated over $200,000,000 in total revenue and he is currently building an online education company and a SaaS company.