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  • Guide: How Do I Grow My Business?

    updated 1 year, 9 months ago 0 Member · 1 Post
  • Margaret

    Member
    December 9, 2020 at 11:06 am

    Hey everyone! This is part 3 of 3 in a series on how to turn your idea into a business. You can read this as a stand-alone post, or check out Part 1 and Part 2 for more context. If you’re looking for business ideas and content on starting businesses, check out my newsletter! If you haven’t made any sales yet, I don’t recommend starting the process below. Read Parts 1 and 2 for guides on how to validate your idea and get customers. Alright, let’s get to it. At this point, you should be making some money and have about 10-50 customers (maybe more) – congratulations, that’s a big deal! But, now you want to grow to 100 (or 1,000) customers. I respect your ambition. In my experience, this is one of the hardest challenges to solve for early-stage companies. This step is where side-projects or hobbies are turned into real businesses that can be successfully bootstrapped or go down the VC path. The Setup After you’ve sold to a small number of customers, your goal is to create a repeatable process for growth. Another way to put it is that you’re trying to create a growth machine – for every $1 you dollar you put into the growth machine, $5 comes out. Regardless of what metrics you track, this is how to demonstrate that you’ve got a repeatable process. Step 1 – Map out Your Funnel First, you need to deeply understand each step in your customer acquisition funnel. What you’re going to do is map out EVERY STEP that’s trackable until you’ve acquired your customer. An example of this might be – Customer sees an online ad Customer clicks add They request a demo We do a sales call They get a 7-day free trial where they enter in their data They pay us at the end of the trial Note: I like multiple-step funnels for early-stage companies as it gives you the most data to learn from. I like shorter funnels for companies who are ready to scale. Step 2 – Figure out what’s working and what isn’t. Next, gather all of the data you can about each step and find out where your sales funnel is either breaking or there’s a bottleneck. For example: 100,000 Customers see an online ad 7,000/100,000 Customer click ad 30/100,000 Customer requests a demo 5/100,000 Customer gets on sales call 2/100,000 Customer enters data into trial 2/100,000 Customer pays us at the end of the trial ^ Here’s what that tells me – You’ve got a decent ad and people seem to be interested – you’re getting a 7% CTR. Don’t change this. Your landing page sucks at converting people to a demo. We need to change this. There’s a big gap between people requesting a demo and getting on a sales call. You might want to change this. Getting people to enter in their data isn’t working. You might want to do this for them If a customer does enter in their data, they will pay you at the end of the trail. To do this, you need to understand each part of your sales funnel, examine where it’s ineffective, and run experiments. Your goal is to create a customer machine. No matter what your sales funnel looks like, you can and should track each step. This can be meticulous work, but it’s the most effective way to understand what’s working and what isn’t. Step 3 – Experiment Now we experiment. Start by taking the most broken part of the funnel and fixing that first. When fixing individual steps in your funnel, don’t change too many things at once. We want to be able to isolate what’s working and what isn’t. If you change too many things at once, it gets really difficult to track what caused the changes. I recommended running multiple A/B/C/Etc… tests in parallel if you want to move quickly. Take cohorts of potential customers and distribute them between each new iteration on that funnel. This will allow you to test quickly, while still keeping the data relatively clean. Here’s what that could look like: Current Landing Page – 1.5% Conversion rate New Landing Page A – 1% Conversion rate New layout Same copy Same CTA
    New Landing Page B: 3% Conversion rate Same layout New copy Same CTA
    New Landing Page C – 2% Conversion rate Same layout Same copy New CTA
    ^ Here’s what that tells me – Landing Page A’s layout decreased conversions – I wouldn’t move forward with that. Landing Page B’s copy increased conversions – I would move forward with that. Landing Page C’s CTA increased conversions – I would move forward with that. Had you done all of these changes at once, your conversion would have gone up, but it would be unclear why. You’d be unable to see that you’re using a layout that actually hurts conversion rates – thus leaving money on the table. Conclusion: Your goal is to create the best performing funnel possible and has data that proves when you put $1 into CAC you get $5 out (hypothetical numbers). This will likely take months of experimentation and effort, but I promise it’s worth it. Of all the companies I’ve worked with, typically, this step is the difference between those who are successful and those who aren’t. Thanks for reading!
    – by /hq/papapatty11 – –

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