Early Stage Growth

How to grow better by having a focused approach to audience selection

Growth. It comes in all shapes and forms. And unlike popular belief, it is not a term that’s relevant just for businesses. Whether we are running a community, an email list, a youtube channel, or a podcast, we are always looking for growth - even if we do not actively think of it that way. Admins of facebook communities are always looking at adding more members to the group. People who own and operate email lists are always offering freebies and lead magnets to increase the size of their lists. Even if you are running a personal blog, unless you are writing for an audience of one (i.e. you, in which case it stops being a blog and becomes a journal instead), you are looking to get your content out to more and more people.

The funny thing about growth is that it is often looked upon as something you should achieve at any cost. It then becomes easy to believe that more is always better. The problem with blindly chasing down “more” presents itself when you discover that it isn’t actually correlating to an increase in your goal fulfillments, i.e. new business. This leads to you finding yourself having invested a lot of time, energy and sometimes money into growing a stream that did not give you much of an output to show for as success. This is what is known as vanity metrics. You may be able to show a massive increase in the metric you were tracking as far as growth was concerned, but when we shift the focus to an increase in revenue (or revenue opportunity), it doesn’t seem to be correlating to your initial growth numbers. At this stage, people often tend to lay the blame on the marketing channel they were focused on. When you hear someone complain about email marketing not delivering results for them, it is exactly this scenario that they are describing.

The problem isn’t actually with the marketing channel, rather the way they grew. Growth without the right context is often misleading, and today we are going to look at a better way to grow.

Focus. What audience are you targeting?

This is one of the first questions that often comes up in the context of business strategy in general. Unfortunately, it is also the question most people get wrong.

When entrepreneurs answer this question, they tend to include any subset who they can see using their product and services. The final audience set they come up with includes people with widely different behavioral traits, people who differ from each other on both macro and micro levels, and people to whom the product has widely different levels of usefulness.

The result? A fairly wide angle lens. Instead of answering the question about their target audience, they just answered the “addressable market”. More the better, after all. And that is where the problem begins.

When the elements of your audience selection differs so widely from each other, it becomes very difficult for you to cater to even a single one of them effectively. In an effort to serve them all, you end up bloating up your product, your user onboarding process takes a hit (since different kinds of users have different motivations, expectations and usage of the product), and your marketing communication and content ends up being all over the place.

For early stage businesses, this is an absolutely critical problem, but for larger businesses, it is an even more prominent problem because the indicators of wrong growth often get masked because of the sheer number of customers they are catering to.

You need to decide the audience you would be chasing down, and the more precise you can be in selecting that audience, the better you will be able to equip yourself with the tools necessary for that chase. Take us for example. We are a web analytics company, so any person round the corner and their grandmother is a potential customer - as long as they have a website. And we would not stop them from availing our services if they come across us. But are we actively chasing after them? Well, not unless they run a SaaS business.

Loosely speaking, that’s what the defining trait of our current focus is. Our ideal customer is someone who runs a SaaS business. (You can further refine this by adding a few more filters on top of the primary filter, and we have done that as well, but for now, let us stick with just the primary filter.)

So why SaaS businesses? Maths! If I have to convince two people why they should shell out a few bucks every month for a web analytics product when they have the option of using Google Analytics for free, I would like to focus my energy on convincing the person I can give the most contextually relevant examples to.

There are a number of reasons why someone transacts with a business, but the most basic ones are - time and money. The product they are paying for saves them time and money, or helps them make money. Either way, they need to see that they are getting a return on their investment.

They can use Benne Analytics to look up their traffic data, Google Analytics helps them do that as well. But our product takes it a step further. It presents data to you in a way that eliminates a lot of analysis at your end and presents you with actionable insights that help you grow your traffic further. For a SaaS business, growth in targeted traffic directly translates to revenue. So it is easier for me to help them see the immediate value of the product. This also makes my job easier and more results oriented when it comes to product design or marketing communication because now I am focusing on helping SaaS businesses see the value of the product. They are my singular focus. So while the product remains useful to any other category of customers, it becomes incredibly valuable to SaaS businesses - the one segment I am actively chasing down the block.

It is better to be well known in a niche than to remain unknown in a crowd

We have been led to believe that all revenue is equal and so are all customers. We look at MRR numbers and churn rates. We look at month on month growth. But if your product is incredibly valuable to one group of customers and not so much to three others, then how would you expect any of these numbers to present a clear view of where things actually stand?

Even if you did not start with a targeted customer type, but see a particular customer type having impressively low churn, then you know that is the right audience for you.

I know of a startup that started by focusing on any and all businesses. Three years down the line, they had changed their entire website and marketing strategy to focus on just one segment - shopify sellers. Why? Because their product was being used most aggressively and to the fullest extent by shopify sellers. The sellers found the product so incredibly valuable that amongst them, the annual churn rate was in single digits. Their annual churn amongst shopify sellers was almost the same as their monthly churn rate amongst the other customer types. That is quite a substantial difference to ignore. So, they rebranded themselves, and for now, they are catering exclusively to shopify sellers, and continue to grow at an impressive rate.

Being incredibly useful to a niche offers you a lot of perks. You get invaluable social proof as well as word of mouth publicity. Your content tends to be focused around the problems of the niche segment, as such you find it ranking higher and higher for the right search queries. And your landing pages and product design gets much more solution driven instead of being a one-size fits all approach. The benefits ultimately start reflecting in increased conversion rates across the spectrum.

It is difficult to say “No” to a customer

No one understands it better than an early stage entrepreneur. When you are at a stage where all revenue seems like good revenue, and where every single incoming dollar helps sustain the company, it can seem like a pretty high risk to not be available to every single targetable customer out there. And if you are defining your entire presence to be suitable for a very very particular set of customers, it can almost feel like you are saying No to everyone else.

That’s quite a scary thought. Turning down much needed dollars.

I understand that. After all, our business is in its infancy as well. But as scary as it may be at first, it helps you channel your energy in one direction, and if you are doing your audience selection right, it will ultimately translate into a much better, more sustainable way to grow as compared to a watered down approach in an attempt to cater to everyone.

But, it’s easier said than done, right? As I said, it’s difficult and gut-wrenching to say no to the early stage revenue. So, let’s make a compromise. Be available for every customer type, but dedicate your focus and energy to only one. If someone from the non-dedicated group does become a customer, try to serve them to the best of your abilities. Answer their questions, give them a delightful experience, help them out with their problems. But as far as the bulk of your energy and bandwidth go, reserve them for your targeted audience. Keep your marketing, content and overall strategy extremely targeted to them. Actively chase them down and see to it that you are not just delivering a delightful experience, you are delivering an experience that will make them wonder how they managed to go on before they started using your product.

So, how do you do it?

Get seen. Get recognised. Dominate

Rome wasn’t built in a day… but they were laying bricks every hour.

One of my favorite quotes. It is the second part that always gets me. I don’t remember where exactly I came across it, but it has been with me for as long as I can remember.

You want to dominate the market. Be the de facto product/solution your customers turn to. It doesn’t matter how big or small that market is, that dominance won’t come overnight. So, you will need to be patient and continuously work towards achieving that goal. Oh, and remember - almost always, you will be starting from zero!

The growth, and more precisely the growth curve, will come in stages.

Get seen - At this stage, your target audience keeps on seeing you around. They don’t know much about you, what you stand for, or what you are great at. But they do keep seeing you around in the same places. Over and over again. Content is your friend here, and keeping it contextual would play an extremely critical role. If you keep your content contextual to the focus areas of your target audience, then they would not just be seeing you, they will start seeing you again and again with a presence that’s contextual to their problem statements and pain-points and they will then start correlating one with the other. You will start getting recognised as one of the avenues that can be helpful with their pain-points.

Get recognised - We entered this stage around the end of the last. Keeping your content contextual was the key to succeed in the last stage. In getting recognised, expertise is the key. You want your content to be valuable to your audience. By now, they have already checked you out a few times, and have found you to have a clear and compelling view of things. They have started to associate you with the problem statement you are trying to solve. You have started to achieve brand recall here. While in the last stage, people came to recognise your name and your brand because they saw it coming up again and again, at this stage they slowly start choosing you over others as an avenue to alleviate their pain-points.

This is where you start witnessing customer sign ups, and conversions from free trials to paid subscribers.

Dominate - You hammer the same idea over and over again, and you do a good job at it, you will start getting associated with that idea. This is what we have been doing so far during the last two stages. Be relentless in your pursuit of your targeted audience. Make their pain points your own, and solve those for them. This is how you achieve loyal customers, who won’t just delightfully use your product, but also happily endorse it to others. And when your customers start endorsing you even without any incentives, they are doing so because of how incredibly valuable the product is to them. And this is when you start entering the phase of domination.

What do you do next?

Two choices. One, if you think your current audience selection has a lot more to offer, keep at it. Truly dominate the market. Be known to be “THE” solution to the problem you solve, in that audience group.

Second, pick up a new targeted audience, and do it all over again!

By now, you would have achieved a great deal of understanding of your first target audience. What they want, what they do, and how they do it. You would know how your product fits into their lives. Basically, you probably won’t need a map to navigate around anymore - at least with this one audience set. So, while you continue down the path of growing the size of this audience-set and continue to delight them, utilize the bandwidth you have freed up to add a new targeted audience to the mix.

Everything else, right down from how you select the audience to how you achieve the seen, recognised and dominate stage remain the same. But you are now operating with an added advantage. You have done it once already, so as far as the broad strokes go, you are not flying blind anymore.

You know the right questions to ask, you know the right markers to track, and you know the red flags to be on the lookout for.

It is for this reason why we started with one targeted audience segment instead of having a few. The more audience segments you added to the first lap of the process, the more complicated and difficult your learning process would have been. By keeping it focused, you would arrive at a clear and concise mapping of audience definition with the required approach.

So now you get to do it all over again.

The only thing you should probably keep in mind is when you choose your next audience set, try choosing one that overlaps at least a little bit from your first. Would help you execute things better.

Questions on how to select your most promising audience? You know where to find me. ;-)

That’s it for today, see you tomorrow.

Cheers

Abhishek

Subscribe to Benne Analytics Blog

Get the latest posts delivered right to your inbox