Now, the title slapped me in the face as one of those, “what?? $1?! Too much?!” And the exclamatory questions continued. But after reading the article, I fully get it, and now, his advice and this article is one of my favorites. The gist of the argument is that startups tend to spend a lot of money on marketing looking for growth when the real deal in achieving growth and sustainability is simply taking a closer inspection of the products and services provided by the companies.
Williams cites, “over half of all startups are gone within five years” and “only 30% ever make it to 10 years”.
These are pretty scary numbers, but sharing an anecdote where a company was going spend lots of money with Williams and his marketing team on marketing services to drive sales, Williams uncovered a problem much deeper and far greater – existing customers weren’t signing up for recurring services. So here, you have a business that is looking to grow when the momentum they’re trying to build on wasn’t actually momentum at all other than the initial spike because customers weren’t in love with what they bought. There were problems including the payment processing that just scared customers from signing up for recurring services.
I can appreciate this deeply. One of the most exciting things you’ll ever experience is the early sales after you’ve launched your business. You start with nothing, and build it into a product that people are actually buying. But what really discourages you and drives you to go nuts is watching user engagement fall after that initial excitement. In some ways, you want to say, “bah, they just don’t get it… they aren’t appreciating what we’re doing”, and it’s “easy” to try to move on and try to make more sales. However, this is incredibly terrible thinking. As Williams points out, sales almost means nothing if you can’t even ride on the success and recurring services from existing customers.
The companies that succeed (those that exist after years and years including those acquired), are those who listen to the customers. Successful products and services evolve as the market starts showing you what is lacking in your service or product offering. In our case with Body Boss, we’ve had to continually refine our app. It’s a million times better than what we first launched it as. Getting insight from our customers is critical as we, too, have seen user engagement wane. And sometimes, it’s hard to get our customers to open up with what needs to be simplified, fixed, or pursued otherwise.
The funny thing is when you start to rationalize that your product is perfect and the market is wrong. It’s really a poor excuse. Your product is supposed to address the market, and hopefully, a pain-point of the market. The product doesn’t make the market. For Body Boss and for other startups, it’s important to take a hard look at your product and ask your customers how to make a more compelling product. Williams provides three simple questions that should help you communicate with your customers and tell you if you’re going down the right path:
“What should we stop doing?”
“What should we keep doing?”
“What should we start doing?”
This also leads to a couple other points that will be talked about in later posts:
- DO YOUR RESEARCH – I don’t mean to necessarily go to the library or Google and start researching market sizes, key words, etc. I mean doing real hands-on research vis-à-vis talking to your potential customers. They will tell you what people really want. But be careful to also not take just general “I like that” vs. what people will actually pay for.
- Depending on the market you’re trying to approach or if you’re trying change actual PROCESSES of how a potential market currently operates, it may be critical to communicative first customers.
Those are obviously not the only two critical components to building a desirable product. However, as I read Williams’ article, I thought more about my own experiences and others’. With the abundance of data thrown at you with marketing efforts, really your best marketing device is your product or service offering. Networking plays such a huge role in your business’s growth in the form of simple word-of-mouth. So take care of your most important marketing engine before you plow money into the wrong area.
So what are your thoughts? Have you seen where marketing budget was just thrown at the business to boost sales when perhaps the problem was truly in the current product or service offering?