Acquiring Initial Consumers
Start-ups have to acquire consumers and early and faster get sales at the gates. It’s time to raise big business dollars before you really concentrate on sales and customers.
Wing and TechCrunch’s data last month showed that 82% of the companies that raised Series A rounds in 2018 are after sales, up from just 15% in 2010.
Times changed. Times changed. It is no longer possible for founders to woo investors with brilliant ideas and “users.” The people behind the finance want immediate results right away, meaning that the days of raising money are over without evidence of success. When the much-feared next recession comes, investors will become even more picky.
There is no better way to de-risk a business at an early stage than to have others pay for the solution. This forces you to scrap your first solution because you probably won’t have much time or money to do it. If you can even purchase your product or service by 20 people, you can distinguish yourself from the rest.
Early purchase of the budget
Young businesses usually do not have a lot of money to spend on buying customers, and many start-ups start without any money. You cannot employ an agency or a marketing department to perform your business with a limited budget — you have to win your first customers yourself.
If you had unlimited time, it would be quick, but you don’t get that either. Tight budgets don’t give you much leeway, so you won’t get far if you can’t show your feasibility until it’s time to leverage money.
Also, it is important to remember that growth strategies for larger firms in their early stages do not work for startups. You won’t have a “perfect product” and certainly won’t sell yourself – or you can create a detailed marketing plan similar to a Fortune 500 Marketing Strategy which you learned from your MBA class.
Only claim that you aim for the magic $10,000 on a recurring monthly income so that you can collect your seed from outside investors. In your bank account you have 60,000 dollars and monthly expenditures of 10,000 dollars. In this case you know that if you want to live, you have six months to earn $10,000 in monthly recurring revenue. You can split this up into monthly goals and run several “experiments” to see what sticks and then double successfully (even though they won’t scale).
You may not even know who your ideal client is or how to sell it to that individual in your earliest stages. However, running these fast and dirty experiments with some manual effort on a small scale makes it OK to get a few things wrong as long as every iteration teaches you to change the next time.
How to get the first paying clients
Kill your thoughts about major marketing strategies, SEO campaigns, launch parties and Super Bowl advertising. I noticed that certain games on a shoestring budget might be too risky. Instead, take a gradual approach to acquire your first customers through fast experiments.
After you limit the 10 strategies you’re going to use, build test cards to confirm your chance of success and determine what you are aiming for. These cards force you to view sales as a scientific experiment by going through the measures, setting success or failure parameters and specifying the methods to be measured.
Here are certain ways to do that, even with a shoestring budget:
Take part in trade fairs and conferences.
Customer acquisition tactics seldom size well in the early stages, so don’t think about that. To make critical ties, attend conferences and trade shows in your industry.
Etsy is an excellent example of an organisation using this technique. The business was pulled off the ground by travelling to artisan fairs and convincing suppliers to open stores on the site. Alternatively, you could do what Salesforce does and employ people to attend the major conference of your competitors.
Also Read: Must Learn Skills For e-commerce
Don’t be frightened by a cold call.
Our favorite unicorns have also begun to be simple. Uber started with cold-calling limousine firms. You can try LinkedIn or you can work for warmer introductions to your network.
Bring doughnuts to the prospects’ offices. Very. Really. We have a healthcare company that has done this and that has worked.
A trick for a cold call: don’t try to close your first call prospect. Call first and invite your hosts to a special event or dinner or a ballgame suite pass. This lowers the barrier and lets you enter the entrance.
Also Read: Marketing Tips To Improve Returns
Make use of paying advertising to launch you.
Paid advertisements are useful in the beginning because you can almost instantly test stuff. And if the business unit isn’t there, it’s OK at the beginning, since you want to drive income and justify business model assumptions—not display profitability. Try starting with Facebook, Instagram, and LinkedIn advertising.
For instance, Ilya Pozin, who co-founded my firm, recently sold its Pluto TV video streaming service to Viacom for $340 million. He used Google and Facebook advertising for limited budgets to get his first users who provided immediate information and needed little money to verify it.
Start small. Start small. You don’t have to employ an ad agency or buy big media. Get yourself targeted, with a $500 budget, and learn DIY.
Also Read: High Performers With High Energy
Platforms for Piggyback.
Use the trick of Airbnb to get your initial customers from another site where users already live. They used the user base of Craigslist to get started. Zapier did the same for online forums, where links to receive email addresses were shared.
Follow these examples and consider where the customers are actually online. Platforms of consumers can be a perfect place to meet your own customers.
Selling the commodity is not a matter of multiple choices. There are two things you can do at once. Choose your preferred possible strategies and then target sample sizes that are only broad enough to produce statistically meaningful findings and move forward. Execute the tests and calculate each channel’s ROI. Keep your expenses quickly and validate your hypotheses.
If one of your strategies produces good results, double it. Then repeat the procedure with any other successful strategies. This gives you input from your actual customers to better your business model and product. For now, however, concentrate on converting new customers.
If you follow these four steps, at least 20 new customers will be available. Don’t think about what your future has or whether you will maintain your performance early on. Get your first clients on board, deal with them well and use them to finance your next moves.
Also Read: Important Financial lessons