Growth Reminder: Microfocus, Rinse and Repeat
This newsletter generally focuses on the early days of company building. It’s one of the ways I’m trying to give back and help those at this stage of company building. It’s a free resource that acts as a reminder and helps you stay on track. With that in mind, I want to break down an actionable plan for growth. We all know a lot goes into company growth: a clear vision, a great team, and ultimately right timing. But sustainable growth is all about concerted efforts focused on four core areas and then repeated and improved over time: the product, the offer, the customer experience, and market awareness.
Great Product > A Great Offer > Great Customer Experience > Market Awareness
The Product
The growth journey always starts with a compelling and differentiated product. The easiest path to a compelling and differentiated product is to serve a niche and create differentiators within your product for that market niche. Trying to serve everyone at once out the gate can be tempting, but becoming too broad will limit your ability to differentiate. Definitely give thought to the total addressable market (TAM), but realize that as your product evolves, you’ll be able to serve more of the market and expand your TAM. In the early stages, your best bet is to choose a niche and go all in. Think of it like a magnifying glass in the sun. If you raise it high, nothing happens. But if you go closer to a point on a piece of paper, it catches on fire, and then the whole paper catches on fire. That’s what you’re going for; light a spot on fire and let it spread. Niches make riches. Drill down to that point where you are simple to deliver and have a well-designed and highly differentiated product addressing major problems for your niche.
The Offer
Your offer is how you price, deliver and derisk your buying process for the customers. A differentiated product allows for a differentiated offering that feels specifically designed for the niche, allowing you to create a unique position with the potential for easy onboarding and high margins. Find a guarantee you can place on your offering that’s harder for a competitor to match or easy for you to fulfill. I’m not as concerned about the easy-for-you-to-fulfill part. It’s ok to have some friction and do things that don’t scale to make your offer great at the outset. Use the features of your product to sell an outcome. Don’t just focus on the features themselves. Attach a guarantee of what the world will look like if a customer uses your product. Don’t sell flights, sell vacations.
A great offer means you don’t simply compete on price but on the unique value you are offering the niche you serve. Your pricing should tie to the value-creation activity of your product. You can read more about value-based pricing here. An offering is a combination of value-based pricing with a differentiated product, sometimes coupled with a guarantee of outcomes that increases the value of purchasing your product.
Customer Service
A great product plus a compelling pricing position and offer leads to customers. Your next job is to keep those customers happy. Unhappy customers lead to churn, or what is called a leaky bucket. With a leaky bucket, your churn rate is so high that you can’t grow your customer base – you’re losing customers more quickly than you’re gaining them. Nothing is worse than a leaky bucket. Some churn is natural, but be intentional about keeping churn low. It’s a fallacy to think you can keep replacing churning customers with new ones. This strategy isn’t sustainable. The core of growth is retention. It’s the customers that stay or keep buying more that drive your growth in the long run. Optimize each step of the customer journey through every stage, not just at acquisition.
Spend serious time on your customer experience. A great customer experience gives you insight into what is needed to retain customers, upsell them, and nail your product roadmap. Use the insights from customers to keep evolving the product and understand your customer better. For example, my original idea for TheraNest was to cater to nonprofit counseling centers, as they were my initial customers. However, as we listened to those we were attracting, it became clear the happiest customers were private practices with multiple providers. With that data, we pivoted our product to serve that base better, accelerating our growth.
Awareness
Finally, awareness. If a tree falls in the forest… you know the saying. Get your product and offering right and be ready to serve your customers. Now make it easy for the world to find you. Create great content about your product and your customer’s problems, and turn it loose on the world. Build unique landing pages for each use case your product tackles. Go deep and outline your solution to each use case. Create content that speaks to your customer. Talk to your customers. You can also find repeated questions on Reddit, Facebook groups, Quora, LinkedIn, etc. to guide your content. Customer engagement will help you optimize your content for brand awareness.
Each of these four elements is a topic in itself. Focus on them weekly. Rinse and repeat.