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When Growth has Nothing to Do with Marketing and Sales | 7wlite Blog

The math behind most tech companie's acquisition strategy could be unsustainable. Things usually go like this:

  1. a) Sales and marketing go after a given market segment

  2. b) They engage a fraction of these people, which become leads

  3. c) These leads are nurtured, and some of them become customers

So, we're necessarily talking about a funnel. What is the ultimate success here? We could consider address every single person of a given market segment and convert to customers as many people as possible.

A classic and once effective approach

On the other hand, this is concerning. When there is no one else to target, you only have two options to grow: go to a different market or try to convince some of the folks that already heard of you or experienced your product to give it a second chance. That's why companie's go abroad or expand their product scope or advertise, so people can remember them again.

A third path

When you're growing a business, three numbers matter more than anything else:

  1. 1. The cost of acquiring a new customer (CAC)

  2. 2. Customer lifetime value

  3. 3. How long that customer stays with you

You are probably focused on lowering your CAC. That's because it's something practical. You hire more salespeople or increase your marketing efforts or advertise more. And results do come fast. Sometimes you do see the difference in a matter of days.

The thing is, these peaks don't seem to support long term growth. At least not at the levels you expect. Also, this approach costs a lot of money. You're feeding the top of your funnel, but what about leaking that happens daily? How many people are abandoning your product every month?

From funnel to flywheel

It's much more difficult to address customer lifetime value and length. Sales teams won't do much here. Marketing efforts can help, especially on the customer support front. Things get even harder when we consider tech products. Typically, people prefer to experience the product instead of listening to your sales team.

Funnels are about acquiring. Flywheels are about acquiring and delighting, so customers start selling for you.

Most of them won't even give your chatbot a chance. You need to think about growth on a different level, like something tied to the experience with your product. It must deliver clear value and delight people, from the very first interaction.

What you need is to build a base of customers who are willing and able to say remarkable things about your product, and this creates a virtuous cycle. That's how you go from a funnel-based go-to-market strategy into a flywheel.

When people talk about your brand, they're helping you acquire new customers in a very efficient way. People believe people. This creates a cycle where the post-sale experience feeds your sales process.

The more delighted your customers are, the more they'll promote your product. The more they talk about you, the faster your flywheel spins. That means, in the end, a more rapid business growth.

This is the right move in your customers' benefit and also the best thing you can do for your business. It's a beautiful place to be.

The math tells the same thing

In the second part of this article, we're going to check the numbers that illustrate how this approach could be a game-changer for you.

Stay tuned!