Most companies spend time in the “Trough of Sorrow”. This is where your company is not doing as well as you would like. You have built your million-dollar product (idea) and are now struggling to get paying customers. There are many reasons why this can happen. And many of these reasons bleed into one another. In other words, they relate and can overlap. Some of the reasons below sound similar. But they were each listed for a specific purpose. This is a dense subject. There are many issues and few easy answers to the issues.
So, here they are
- You thought that building a product was the hard part and would get you 85% of the way towards success. It turns out that building the company around the product and selling and supporting customers is 10 times more difficult.
- You have poor product-market fit. There is either no need for your product, customers are unwilling to pay for it, or, for a variety of reasons, don’t want to use it.
- Misaligned product-channel fit. Either you are trying to sell B2C (or B2B) and the market is more B2B (or, conversely, B2C). Or the market may want to buy from established vendors and not add you as a new vendor and you are trying to sell direct. If you do try to sell through a distribution partner, this is complicated by the fact that any relevant potential partners either don’t want to sell your product (sales people don’t have the interest or your price tag is too small) or they are unable to sell your product (wrong skill set). Pick the right channel and properly support that channel (whatever it is).
- You do not have a strong enough value proposition or you don’t have any value proposition. Your value proposition should list the problems you solve, the benefits that you provide, your ideal customer profile and criteria and why your customer should buy from you and not someone else.
- You have a poor website. Today, all people and companies begin by going to your website to check you out. If your website does not quickly, clearly and properly describe why you exist, what problems you solve and have a clear value proposition listed, they quickly bounce. Website messaging is often convoluted. It is either marketing-speak or technical-speak, neither of which is compelling for your buyer.
- As it relates to a prior point, you have not taken the time to define and communicate the profile and criteria of your ideal customer. This is different from your target market. These are the pains and problems that your ideal customer should have and what their decision criteria should be to replace the incumbent solution.
- As a new company, you lack market awareness and visibility. This will be explored further below, but we wanted to call it out as an issue here.
- You have an unrealistic or non-existent lead generation plan. You are waiting for the market to find you and have not done outbound marketing, thought leadership, conferences, and other outreach programs. A balanced inbound and outbound program along with proper measurement can have dramatic impact on your business.
- Lack of lead-nurturing. If leads do come in, you may not be doing the right things to nurture those leads into prospects.
- You don’t have a defined and formal sales process. A formal sales process can help you move prospects consistently along, help buyers understand where the end is, prevent you from going on a wild-goose chase with buyers who don’t know how to buy and help you better understand where you might be losing prospects (if you measure conversion rates).
- You have poorly trained sales people. And this may include you if you are still the sales resource. Understanding the basics of sales along with the industry pain points, why initial customers have purchased, value proposition, qualification skills, objection handling knowledge, product knowledge, demonstration skills, frequently asked questions (and answers) and other topics is required to successfully navigate sales.
- Impractical or indefensible pricing. This can either be pricing that is too high, the use of the “dreaded” freemium model or not selling properly on value or not focusing on proven (not theoretical) outcomes.
- Poor product demo. Most people confuse a demo with training and do a demo that is a series of “you can do this and you can do that” statements. Demonstrations should be an exercise in solving customer problems, relating client reference stories and focusing on the benefits of the product, not just the features. And the demo should shy away from showing technology.
- Not understanding “Crossing the Chasm” concepts. Early-adopter buyers use different criteria than the early majority customers who buy differently than the late majority customers who buy differently than the laggard customers. Identifying your individual buyer and qualifying them on where they are on the product life cycle curve is essential to focusing on the right buyer and the right time. Plus, if your product applies to various industry segments, you need to understand that some industries are more open to new products than others and that each industry may have a unique product life-cycle curve.
- Having an aggressive and disruptive competitor. Sometimes, there are multiple new entrants into a market. Having a competitor who is better at sales, has a better product, is better funded, is better at controlling the buying process, has more customers than you can totally disrupt your already difficult market-penetration efforts.
- You lack customer references. Most buyers want reference accounts that are like them in size, industry and pains. Often, you either don’t have the references or you don’t know how to effectively use the references that you have.
- You have not dealt with prospect objections. People can have cognitive, political, motivational, resource, risk of purchase or feature oriented objections. Documenting the objections that you know are coming, writing out counters to these objections and then doing a pre-emptive strike to prevent them from being voiced is essential.
- You really don’t know how to qualify buyers around their need, access to funds, decision making authority, timeframe for decision, or even decision criteria. This will kill all sales deals.
- You don’t know how to close a sale. There are ways to ask for the business that are not scary to you, but you don’t know how to do this. If you don’t ask, you often don’t get.
- You are stuck in “pilot hell”. Organizations ask for pilots, and don’t end up buying. Plus, once you do have some successful pilots, you can’t get other organizations to stop asking for a pilot. Knowing how to manage a pilot program and evolve this into a scalable business where pilots are not done is critical.
- You have an overall fear of execution on doing the right things. Many people don’t know what they don’t know and end up mistaking motion with progress. Others simply are afraid to do the things that they know will help them get customers because they are afraid to leave their comfort zone.
- Not setting real metrics on progress and not holding yourself and your team accountable for the metrics and the drivers to those metrics. Using concepts like OKRs (Objective and Key Results) and/or setting quantifiable metrics on performance for all employees can clobber your ability to get customer traction. This is particularly true with sales and marketing (lead generation) metrics.
- Falling for Fauxmentum. This is allowing yourself to be convinced that false metrics are critical like blog followers, likes, or having a prospect tell you yesterday that they really liked your product.
- Not understanding the high-risk purchase. You have to understand that you are a new, small, young, unknown company asking a larger company to displace an incumbent solution, disrupt their workflow, impact their business and their people and spend money on you for what might be a “mission critical” application. Understanding how to mitigate risk is really important and often lost on an entrepreneur.
- Fear of being bold. OK, if you are going to be revolutionary, you need to blow some things up. Vanilla does not sell. Humble does not sell. You need to go after this and be smartly aggressive. Focus on value, not technology. Use your references, your outcomes, your benefits and your value proposition. If the buyer does not want to buy, move on. Find the next one.
These are some of the more common reasons that early stage companies struggle with getting customer traction. If you do not understand any of these issues, or if want assistance on any of these issues, please contact firstname.lastname@example.org or visit www.arbordakota.com for more information.