You don’t need anyone to tell you that your revenues depend on digital marketing. Nor do you need reminding that ecommerce sales have (more or less) doubled and virtual sales meetings have replaced physical ones more or less overnight.
However, after the urgency of the coronavirus driven full virtual switch, it is time to consider how to optimise your sales and marketing for revenue as we move into the New Normal.
In this article, I will share 12 steps you can take to find new revenues in the New Normal world.
However, if you are short for time - take away just this: your ability to raise funds depends on your ability to raise revenues - and, with limited resources, you are best advised to choose the best strategy and focus on it rigorously and without distraction.
Revenue Capital not Venture Capital
Most startup businesses expect to raise or will consider raising cash by selling equity.
However, this is not the only way to grow your business without other people’s money. The more traditional approach, now sanctioned and encouraged by Venture Capitalists themselves, is to grow your business on the back of sales instead. Call it Revenue Capital, if you like.
Curiously, VCs now want Startup equity funding to include hard proof of sales – so, whether you seek to take venture capital money now or in the future, making sales with real customers needs to be your priority in the New Normal world.
So how do you do it? Here we share 12 tips and strategies for growing your startup revenue.
1. Upgrade your kit
Whether you are speaking to your colleagues to discuss marketing and sales strategies or pitching to investors or potential clients, upgrade your kit!
Get a better laptop! A faster processor, better microphone and improved camera will help reduce zoom fatigue or Teams tiredness.
If you have a higher-grade laptop already, get better earphones or, even, a separate broadcast quality speaker.
Don’t spend money on your business suit anymore, spend it on your gear!
2. Break the marketing rules
All marketing rules have changed!
For instance, the right time to release a social media post has followed various ‘conventions’ – but with most of your audience working from home or working shifts, there is no longer an ideal moment.
In addition, posts and messages are extremely time sensitive as they respond to current events, so in many cases, as soon as the message is built, it’s the right time to post.
Equally, the assumption that ‘LinkedIn is for business and Facebook is for downtime’ no longer applies. People working from home behave differently.
We can’t tell you what the rules are – other than don’t stick to any! So, share on different platforms, use different strategies and don’t assume an early success will repeat. Everything is in flux, so just go with the flow.
Oh, and email is back too – see below:
3. Use hybrid pricing
The immediate response of some startups was to slash pricing in the face of a collapse or perhaps even weak demand.
We think that was the wrong strategy because once a customer accepts a lower price, they will forever resist a high one – even if they joined on a ridiculously good deal.
Some companies, in response to a fall in demand, have held their pricing or raised it slightly, preferring lower volume at higher profit to being a ‘busy fool’.
Other young businesses have adopted a pay what you can afford or pay what you think it is worth approach. Which may work in some cases, but again, can be difficult to recover from.
Our advice is, instead, look at hybrid pricing. That is to adopt either of these models
- Pay what you can afford now and pay the rest later
- Pay a fee and a measurable share of success
Both of these pricing strategies give your client a discount now – albeit, they need to pay later either through delayed payment or a success payment. However, most startups will reckon that if they don’t reach some kind of success within 6 months, then it won’t matter – so the founders will be willing for you to take the risk alongside them.
The last option to consider might be bartering – but this only works if the ‘swap’ is of equal value to both parties, or else you end up using a quasi-currency to even out the ‘unfairness’ – which explains why it is not a stable solution.
Regardless of how your pricing adapts, it is important to get it right for the future.
For many startups, the first customers will be direct sales and individual users. However, as the startup scales, then you will begin to sell through channels and channel partners or selling multiple use of your product / service into enterprise or corporate companies (see the Scaleup Canvas for a more detailed explanation of how startups scale). It is critical for your long-term success to ensure that your early stage pricing doesn’t undermine your ability to charge differently and higher in the future.
However, these early startup sales are classically achieved by selling ‘single use’ subscriptions. However, if you haven’t built the tech to manage multiple subscriptions or corporate licences, the act of labelling your sale ‘single use’ makes it clear that multiple use will be a higher price – at a later stage – when you are able to build the technology to manage it.
Essentially, it is easier to remove a discount or benefit rather than to raise a price.
Lastly, freemium is a preferred pricing route for many service as a software startups. However, there are typically three stages to this model - not two - as the example of Spotify demonstrates: free, free trial, converted (paying post free trial). The ‘free trial’ option gives you an opportunity to be more generous during difficult times - so 6 weeks, not 1 months - or, as many newspapers have done (FT, NYT and of course, Medium too), offer your Coronavirus articles and stories for free by placing them outside of your paywall.
4. Consolidate and deepen client relationship
The quickest way to build your revenue in a time of crisis is to work with your existing clients.
A key strategy is to consider your client’s success your success. Hence, as your client grows and succeeds, so they have the capacity to buy more of your products and services.
In many circles, this strategy is called Customer 2.0 – it is where you stop measuring your own businesses, first and foremost, and you begin to measure the growth and success of your clients.
Hubspot are a good example of a high growth company who have adopted this strategy and their customer service team have become a customer success team measured not on outbound calls but on the success of the clients they are managing.
It’s critical at this point to remember your price strategy. Don’t let the fear of a crisis destroy your future pricing ability to charge a fair price for your services and equally, make sure that any pricing strategy to attract new clients doesn’t penalise your existing clients.
5. Experimentation means measure more
Now that there are no fixed rules or ‘secrets’ the only approach is to measure everything you do. In fact, a good rule of thumb, if weighing up two different marketing experiments, is to ask which would give you more reliable data, and then choose that one.
Traffic and hits have been misleading for ages – a hangover from print days (circulation), and we know we want to understand interaction levels and, of course, how we made the sale, but, there is no fixed way to measure these ‘outcomes’. In effect, you are moving from ‘how many visitors’ to ‘what did my visitors do (how long, how deep, did they arrive at the purchase page)’ and then infer which is a good set of actions and which is a less beneficial set of actions.
Getting good at google analytics (particularly the ‘goals’ tools) or the Facebook page and group analytic tools, are now essential skills in this new environment of digital revenues first.
6. Get the Tone right
The tone of your messages is hyper relevant to current climate. With so much changing so fast and so many people experiencing shock or bereavement whilst in isolation, the tone of your messages needs to be super sensitive.
Thus, to prevent causing deep offence and damaging your brand, it is important to consider two actions:
- Turn off your automatic scheduling. It is better to post in the moment when you have read the key news headlines and are sure that your messaging is not ‘tone-deaf’.
- Spend some time on Twitter to pick up not only the mood of the moment, but also how people are feeling about latest events.
Post scheduling has its place – particularly around calendar events – but it is probably better to manage these on a day by day basis at least and on a moment by moment basis if at all possible.
Lastly, learn to identify posts as containing ‘informational content’ vs ‘tonal content’ – the former is less likely to trip you up, the later need to be carefully handled – probably by one of the startup founders.
7. Social selling
The increased use of digital involves increased social selling. This form of selling prioritises the building of relationships first and usually is led by the sharing of relevant content.
Hence, the strategy involves both content creation, sharing and relationship building coupled with an offer to purchase or an invitation to join a zoom call to ‘find out more…’.
The key here is to ensure that you have prepared a clear call to action before you begin your content creation and social selling. However, in particularly difficult or stressful times, it may be wise to hold back the call to action and delay asking for the sale for a few days or few weeks.
8. Platform channel strategy
Social selling will require use of and dedication to one of the major social media platforms. However, ecommerce companies will use different platforms – Shopify, Amazon, Etsy etc… along with social media posts to drive traffic.
Equally, a website and website shop combine naturally with google search and google adverts, forming a different digital channel.
In the case of business to business sales, it is more likely that LinkedIn will be your preferred platform and then you’ll need to devise a strategy of connecting and sharing content to build a relationship or creating of posts and articles on the LinkedIn platform. From the new relationships you build, seek to capture email addresses and/ or phone numbers so that you can speak to your prospects independent of the platform.
So, which platform or channel strategy is right for your startup? A key factor may depend on whether our product / service has broad and wide appeal or whether you are working in highly specialised niches or top end luxury? Facebook, for instance, performs poorly for highly specialised interests – such as a rare disease or high luxury / very expensive items, but much better for products and services with wider appeal.
Hence, if your products/ services appeal to a few key people who use rare or less common search terms, then google will often provide better access to this unique ‘niche’ audience.
In some cases, some Facebook groups may focus on these ‘long tail’ interests – but, if the group is closed, then you cannot use the Facebook advertising tools to reach those people (but you can use groups – see below).
Lastly, YouTube may be a significant part of your revenue strategy if your product or service is high in informational content or ‘how to’ advice.
9. Email is back!
One key objective is to invite people (users, prospects, customers etc…) into your ‘orbit’ so that you can share more information and relevant content with them. Classically, this was achieved by adding people’s email addresses to your mailing list – but as this now needs a higher level of permission it is both more responsive (the quality is higher) as well as harder work gathering and ensuring your have the correct permissions.
Nevertheless, it is important to recognise that websites and email addresses you hold belong to your startup businesses. Followers on any given platform belong to that platform, not you.
Hence, if a platform decides to remove your company presence – this can happen on YouTube or Twitter – then you lose your ability to speak to your prospects and community. Equally, your google webpage ranking can collapse overnight if there are changes to algorithms and there is not much you can do about it!
Hence, ultimately, gaining a prospects email and other contact details is key to long-term stability and independence from any platform.
And, don’t forget that most face to face meetings require an email address to send a meeting invite.
10. Focus your revenue building activity
Any young business will be resource strapped – even if you have raised a lot of money.
Hence, your first decision on how to increase revenue – without making your costs rise exponentially – will be to focus on one platform or sales strategy. You may choose a social selling strategy or a website strategy or an ecommerce platform strategy – but whichever you select make the decision based on
- Which works best for your products/ services and your customers
- Which platform strategy is likely to pay dividends in the long run?
For instance, back in the late 1990s there were six main search engines – including new comer Google. At that time, search engine optimisation was focused on optimising rankings for all six main engines which meant that it has hard to be top for any one single engine.
A winning strategy at that time was to ‘select the winner’ and choose google and go full out to optimise for google whilst your competitors kept focused on all six. The benefits of being at the top of the fastest growing search engine outweighed the lost of rank in all other five search engines.
Something similar may happen with Facebook and ecommerce. Facebook have launched their shops functionality for a limited number of users and will be rolling it out worldwide soon. Yes, they will allow Shopify shops to selling via Facebook Shops – for the moment!
However, there is a decent chance that Facebook Shops will become the dominant ecommerce platform replacing eBay and similar platforms over the coming years. Hence, a strong revenue focused strategy would be to optimise your business for Facebook and the new / coming Shop functionality and shift resource from the other platforms this one.
Remember, Facebook also own WhatsApp and Instagram – and a single platform that allowed young businesses to sell on all these platforms through one single interface would be extremely powerful – especially for those businesses with limited resources.
Equally, whilst LinkedIn is Microsoft owned and business focused, it is copying a lot of the functionality that Facebook uses – such as events and improved groups etc… Hence, a healthy LinkedIn strategy might involve developing Facebook skills as well, so that you are familiar with the tools and methods when they are replicated in LinkedIn.
The one other platform to look out for is YouTube – as it has a similar audience size to Facebook. It is perfectly possible for its owner, Google/ Alphabet, to decide to turn the comments section into a social media environment. Where that takes us is impossible to know.
However, for sure, you will get better returns and more revenue for your effort if you decide to perfect your startup teams’ skills for one platform rather than many. So make a choice!
11. Social media groups
As mentioned above, Facebook runs a number of niche groups which are often closed groups and therefore the members are not accessible or identifiable via the Facebook advertising tools. Hence, the best strategy is to track down the groups and then join the group.
Facebook does allow ‘pages’ to join and post in groups, however, it is wise to ask the group admin team if they will allow you to share your content and / or advice.
Clearly, this is a labour-intensive activity but the quality of interaction with your key audience can be extremely high if you develop rare and relevant content and work with the group administrators.
Again, reflecting the views above, what happens on Facebook tends to happen on LinkedIn shortly after, so what applies to Facebook groups for consumer products will, in time, probably apply to businesses on LinkedIn. Although, as we remarked at the beginning, the distinction between business and consumer social media platforms has broken down – at least temporarily.
12. Get your product to market strategy right
Finally, look again at your product / service to market strategy. Consider who is your inspiration - whose life are you going to make better? Who is your paying customer who will reach for their iPhone or debit card to relieve a fear, pain or worry? And how will you make those customers feel and what will you charge?
The Coronavirus crisis has changed the rules – so take some time to go back to basics – tackle a business model canvas to make sure that you have got your product to market strategy right (see the Breakthrough Business Model Canvas that I developed for my clients) and then look again at your revenue generation model.
Look to find a way that your startup can double your revenue and halve the time it takes to find it and bank it. And keep iterating and experimenting as you go. Enjoy!
This was the 9th and final Lean into the Challenge article which captures the ideas and thoughts of startup and expert leaders as we adapt to the new normal. For this piece I am especially grateful for the contribution of Richard Dawson of Cheshire Digital as well as the contributions of Stuart Smith and Coralie Rassinoux for Vitaccess.
Previous articles include; community-the future source of sales and influence, how to get your business development right, the eCommerce future of digital marketing, startup surviving and thriving in a time of coronavirus, selling and marketing in a time of coronavirus and building home based teams and startup fundraising and cashflow plus The New Normal.