Let’s start with a truth bomb. Early growth muddles a startup’s focus. Juggling different customer segments can blur your positioning and make it challenging to identify your best-fit customers. But it’s essential to know who these customers are because they are your path to sustainable growth.
So how do we do this? The answer lies in your existing customer data. When you grow, you get clients. When you get clients, you get data. Who they are, how much do they pay, what’s their lifetime value.
Dive deep into it, understand the story it tells. Who brings in the lion’s share of revenue? What use cases are common among your high-value customers? Who are the customers you should avoid? This knowledge shapes your marketing, sales, and product development strategies.
In today’s article, let’s tackle two of the common problems I find when working on this with clients on repositioning:
Number 1 problem of repositioning and focusing on one best-fit customer is The fear of niching down
Most believe focusing on a single customer segment means leaving money on the table. But the truth is, the riches lie in the niches. By focusing on one segment, you can tailor solutions specifically for them, stand out from competitors, and position yourself as an incredibly valuable tool for them. People buy stuff that’s valuable for them. People will pay premium for things that are valuable for them. So by niching down, you get less clients, paying you more. Less clients means less work, less support, less spend on acquisition, less cost for the cloud servers and whatnot. Add more money to that and you have better profitability. So the brave and strategic choice? Niche down.
The second problem I usually find when I get client’s documents is Lack of quality customer data
When we start our projects, I have one rule. I need to see all the data you have. The data on your product, customers, what worked and didn’t work in marketing. And I found many companies are swimming in the dark because they do not have quality data. My solution is always the same. We need to get the missing pieces of data if we want to make a strategy that will make sense. We need to conduct customer interviews, do market research, test different messages, And obviously, it’s usually the data on customers that’s missing. We all have personas or avatars, that are just plain useless. A PDF sitting on a Google drive.
And the solution isn’t sexy. The solution is to gather the data you need to identify the customer’s pain points, wants, and needs. Discover your best-fit customer. With just 8-10 well-prepared calls, you could gain significant insights that will make more for your marketing than any test you conduct. Download my interview template here.
We didn’t want to do interviews at my last startup. We weren’t in touch with our customers. And the results showed. Too high user acquisition cost, low conversion rates, obviously couldn’t monetize users.
And even when we tried to do the occasional interview, no one responded and we couldn’t get them on a 15 minute call. No wonder. Why would they? We didn’t give them anything they were interested in.
Eventually we turned things around. We figured out what users wanted and gave them that in exchange for the interviews.
In our case, since the startup was a mobile app that helps dyslexic children learn to read, our solution was giving kids free lessons. While the project leader did that, I interviewed moms. And we got some data. Data that finally allowed us to reposition and focus our efforts on a single customer with a single message.
And that lowered our cost of user acquisition by 52%, doubled our user base, we started growing and growing fast. The startup now got an investment.
Remember, poor marketing and sales outcomes are usually symptoms, not the root cause of the problem. The true issue often lies in a loss of Product-Market Fit. The actual solution? Repositioning your product. It starts by identifying your best-fit customer, understanding their pain points, and illustrating how your solution uniquely eases these struggles.
This process calls for an in-depth examination of every facet of your positioning:
- your users,
- their pain points,
- your problem-solution fit,
- your competition,
- your differentiation,
- and your market presence.
When you thread these elements together, the result is a laser-focused approach targeting a specific
- customer segment, resulting in:
- lower user acquisition costs,
- improved conversion rates,
- and a path to sustainable growth.
So, let’s recap. if you’re struggling with scaling up, it might be high time to stop blaming marketing and sales and focus on repositioning your product. The secret to sustainable, targeted growth is a relentless focus on your best-fit customer. You don’t need to work harder; you need to position smarter.
If all this resonates with you and you’re ready to take your startup to the next level, I have a battle-tested repositioning framework that I’ve refined over years of trial and error that I’m sharing with you.
And if you are interested in talking about your positioning strategy let’s grab a strategy call.
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