- 3 Effective Revenue Strategies to Use When Starting a Business - July 21, 2022
LinkedIn cofounder Reid Hoffman once said that starting a company is like jumping off a cliff and assembling the airplane on the way down. Indeed, founders and their teams often have to navigate multiple complex realities, from selecting a business model to learning to prioritize the most effective marketing approaches — all while it feels like they are falling from the sky. However, by having all of this well thought out beforehand, you can save your nerves, and instead of coming up with strategies from scratch, you have a base to build from. This means that when you’re throwing yourself off that cliff, you already have a running engine to rely on. This should start with revenue strategies.
To set your company up for success, here are three revenue strategies that can help right from Day 1:
Sell your product before you build it
As humans, we assume we have a great deal of knowledge about what other humans want. Too often, we see entrepreneurs adamantly chase their vision of what is best for the market, all without any substantial validation. But beware: spending your money on something that nobody wants is a dangerous gamble.
There’s no single checklist for startups to begin successfully. Just like you don’t need a website before launching, in many industries, you don’t need the product itself, either.
One of the most common sicknesses startups catch is not meeting a market need, so let us present you with an antidote: Put your ego aside, and find a way to sell your product before actually building it. Hold everything until you identify a target market that is willing to pull money out of their pocket for your solution, then take their money and build your MVP.
Not only does this give you a healthy financial head start (today, 37% of startups fail because they run out of money), it also ensures that your startup is directly centered around the needs of your clients right from Day 1. In addition to that, those early conversations provide you with invaluable feedback, ultimately bringing both stronger products and less back and forth in the form of rebuilding and updating.
Don’t underprice yourself! Offering your product at a lower price than you foresee for the future might theoretically be a great pre-selling strategy. However, don’t dilute the secret sauce by cheapening your value. When setting your pricing strategy, be careful. Many businesses, particularly in the services industry, simply don’t charge enough. Those businesses that can afford to pay more to acquire a customer will grow at a faster pace; your pricing must take this into account.
For immediate and sustained growth, base your price on the value you deliver through the benefits driven by your products and/or services. Never neglect client retention. Also, you should consider having an upsell product to offer to loyal customers.
Sell wants, deliver needs
With so many options out there to meet customers’ needs, it’s more important than ever for you to cut through the noise and to implement revenue strategies that hyper-focus your messaging and branding on the specific desires of your customers.
Selling a product or service should first tap into clients’ wants, rather than just their needs. Today, too many businesses claim everyone needs their product, but the truth is that while a customer may have a clear idea of what they want, they rarely know what they need. Trying to sell what a customer needs requires you to educate them first while selling them what they want is far simpler.
Here’s a quick example: No one cares about how innovative a dentist’s tools are. When we go to the dentist, we want white, straight teeth. We also want pain-free treatments and a safe experience at the office. We don’t care what tools the dentist uses or if they have the latest reclining dental chair. If that dentist spends a bunch of money on advertising, broadcasting their newest acquisitions, they aren’t keeping our wants in mind, even if those new tools are what will help us get shiny, white teeth.
When you understand the underlying desires of your customer and you create messaging that speaks to their wants, magic happens. Revenue strategies like this are so effective because it fast tracks the purchase decision-making process.
As you start learning more about your audience, whether through social media engagement or networking, directly connect your product or service to their desires in order to boost their appetite to buy.
Influence above everything else
This is no less important in the early stages of your business. Your product is only part of the equation. Without showing the human(s) behind it, together with the insights they bring to the industry, your startup has very little leverage to persuade potential customers to make a purchase.
As the company founder, you must step out of the shadows! Think of Elon Musk as an example. Whether you love him or hate him, he is out there — and there’s no doubt he has a loyal audience. Trying to be the Elon Musk of your niche might be a far-fetched goal but a great aspiration.
You don’t need an established, global brand to make big waves in your industry, either. This is because more than ever, people want to buy from people they know, like and trust. Make sure your revenue strategies include to be present where your customers are, and engage them in a personal, authentic way.
Key takeaways on revenue strategies
If you are a founder in 2021, we have a simple piece of advice for you: get “big business” concepts out of your mind, don’t implement new tools just for the sake of it and don’t get your head lost in market research.
At the end of the day, the only insights you need are those shared by your customers, and the numbers that will help you make the best decisions are those in your bank account.
Originally published June 25, 2021.