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Avoid the Startup Sales Slump

It’s a familiar story. Your SaaS startup has strong initial sales. You win some key clients who love the product and company, but then you fail to sustain growth. There are several reasons this can happen, but in this post I will focus on what I call “early adopter syndrome” and how an effective marketing strategy can help you avoid it.

As a startup, your early adopters are your lifeblood. They see the same problems you do, so they value your solution. They appreciate your attention, especially their ability to influence your roadmap, and they provide great references and quotes for your sales team.

So what’s wrong with focusing on your early adopters?

Early Adopter Syndrome

You certainly need to give your early adopters the attention they deserve. Just be aware that they are not typical of the broader market. They are limited in number and a slump in sales is often the result of failing to move beyond early adopters in your client acquisition strategy. Focusing solely on the feedback from your first clients can result in neglecting the things you need to do to grow beyond them. In working with SaaS startups, I have found that too much attention on early clients results in:

  • Unclear target market definition and buyer personas
  • Lack of a Unique Selling Proposition (USP) and supporting value statements
  • Confusing pricing and packaging
  • Little or no brand recognition
  • Ineffective marketing campaigns

Your early adopters aren’t so concerned about these things, so they might appear unimportant.

How to Avoid the Slump

When it comes time to scale, startups tend to invest heavily in sales, while putting a minor investment into marketing. This approach can be a waste of expensive sales talent. Your new sales team may find a few more early adopters out there, but what happens after that? Often, salespeople get frustrated and end up leaving, a common cause of churn in startup companies.

You can’t blame your sales force for failing to expand your market. It is not their job. That’s why an early investment in marketing is the way to empower that sales team to acquire new clients. And ideally, key marketing work should be done before you hire your sales team. Imagine if you could onboard new salespeople and give them:

  • Clear market segments with defined buyers
  • A value proposition that differentiates your solution from competitors
  • A pricing structure that makes it easy to sell and upsell
  • The brand recognition that will get their calls returned
  • Inbound leads from qualified buyers

It’s marketing’s responsibility to prepare your company for growth through market definition, persona development, and defined value propositions. With effective marketing you can package your solution so it doesn’t look like a menu of undifferentiated options. And marketers should not have “happy ears” when they talk to your clients. An effective marketing strategy will make your client stories relevant to more prospects and it will prepare you to sell to more selective buyers.

When Should You Invest in Marketing?

There’s a saying that the best time to plant a tree is twenty years ago and the second best time is now. The same principle applies to your marketing investment. Planning ahead to avoid the sales slump is ideal, but if you are already in it, there is no time like the present to plant that tree.

I’ll be focusing more on the individual marketing strategies required to prepare your startup for growth and expansion in future posts, so be sure to subscribe in the form below to make sure you don’t miss out.


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