Pukket Blog

Your Guide to Growing Your Series A Startup Organically

Starting a business is among the boldest steps that people make in their lives. Overcoming the fear of being part of the  20% of small enterprises that fail in their first year or 30% second-year small business failures  is quite a big deal. This rate can be considerably higher among tech startups. Congrats if you have a Series A startup. You are now past those early days and are now concerned how you can best grow your business. For that purpose, the Lean Analytics model offers a solid framework in which virality is one of the key pillars of a healthy growing startup.

Your Series A startup is now in a position to invest money into business development and paid acquisition. One of the most important things you need to do is to focus on the organic growth of the business. This requires you to lay a firm foundation on through lean analytics model.

Lean analytics for Series A startups

Through the lean analytics model, you’ll be able to measure how your product/service performs and learn from the performance results. Here are the lean analytics model stages that you should follow to ensure that you gather as much information as possible regarding your market and the performance of your business. If your startup has raised Series A, you should now be past Empathy and Stickiness, and be focusing on virality, revenue and growth.

1. Empathy

This is where you try to put yourself in the shoes of your target consumers and identify a problem that bothers them so much that they won’t mind paying you to get a solution. There might be other products that seem to address the same but leaving gaps that the consumers would want to see filled. It’s now upon you to establish an ideal product for addressing the need. Once you find this, move to the next stage-stickiness. 

2. Stickiness

At this stage, you develop an MVP product considering the analysis information that you gathered in the first step. Then, release the product to the market while focusing on communicating its benefits rather than the features. The benefits are more meaningful to consumers than features. Once they know about the benefits, they can then try to find out the features behind the benefits. 

After some time (depending on your scheduled timeline), you should be able to establish if you have  provided the desired value for the users or not. You now that your product delivers value that’s consistent with the need of the target users if they use it regularly.

Otherwise, even if you made remarkable sales at the beginning and all of a sudden nobody bothers to buy again, you need to recheck your user analysis and adjust your product to offer the value your target customers expect. 

It’ll be extremely difficult, or rather impossible, for your product to achieve the desired traction if it doesn’t offer the intended users what they need. Unfortunately, unless your product has traction, your business has minimal chances of achieving sustained long-term growth.

3. Virality

You have confirmed that your customers are happy with your product and are willing to buy it regularly. It’s now time to scale up their acquisition in a cost-efficient way. One of the most cost-efficient customer acquisition strategies is word of mouth. And the form of marketing not only pocket-friendly but also effective, with 74% of consumers identifying it as their major purchasing decision influencer.

Despite the efficiency it brings, the internet era has seen many brands struggle to win consumer’s trust. The majority of consumers feel that the information given by most brands is meant to overrate their offerings. That’s why, according to HubSpot show, 75% of people don’t trust business ads and branded-content. On the other hand, 90% of them trust suggestions given by their family and friends while 70% find consumer reviews to be trustworthy. 

Therefore, if you want your product or brand to go viral while maintaining your customer acquisition cost at sustainable levels, word-of-mouth advertising is the way to go. There are various ways of encouraging virality and they include:

  • Creating and sharing unique and share-worthy content

You can use social media to trigger conversations about your brand, product or brands. One way of doing that is developing user-need-tailored, unique and share-worthy content. As long as the content is memorable, relates to their needs and is rare to find elsewhere, your target users will find themselves sharing with the people around them regardless of your request for them to do so.

  • Triggering user-generated content

This strategy involves encouraging consumers to create and share content regarding your brand. You can then incorporate the user-generated content in your website or social media channels to build more trust with your target customers. 

  • Employee advocacy

You can motivate your employees to promote your Series A startup through their personal social media channels, among other word-of-mouth avenues. According to recent research by Edelman Trust Barometer, employees are twice more trusted than a company’s CEO. 

4. Expected revenue versus CAC

This stage is about comparing the revenue you expect from a customer and the customer acquisition cost (CAC). Ideally, the expected revenue should be three times the CAC for a healthy and scalable business. If your margins are healthy and have achieved the ideal ratio, you can then focus on growing your business. Organic word-of-mouth is a great way driving down your CAC. Pukket’s fully automated advocacy management platform provides you with the tool to achieve that.

cac

Shareability: Your Answer to Lower Customer Acquisition Cost (CAC)

Do you feel like your customer acquisition cost (cac) is too high? You are not alone. The cost of acquiring new customers has risen by more than 50% in the past five years. The reason behind such a sharp increase is the fact that consumers are losing trust in ads and traditional channels of marketing. In as much as technological advancements have brought much efficiency in the business arena, they are majorly to blame for the business trust erosion. There rise of the internet in the recent past has brought lots of information in front of the consumers. Unfortunately, only a little fraction of the information is factual and worthy of trust. Consequently, the targeted customers feel taken for a ride. They no longer trust businesses easily.

High CAC and reliance on ads can kill a startup

According to  Hubspot Research Trust Survey conducted in 2018, 55% of the customers who participated in the survey said that they don’t trust the companies they buy products or services from, as they used to. This is an indication that businesses have to do more to win trust from their target customers. They need to spend more resources on their marketing strategies to stay afloat and grow.  

Things are even harder for startup businesses. How do you convince a customer who has at one time bought a contraband product posed as authentic that you are different from the quack seller? You can use the most eloquent, most convincing and the smartest salespeople or most viral ads, but still find yourself struggling to gain a reasonable customer base. In fact, the survey by Hubspot shows that 65% of its respondents don’t trust business advertisements while 71% of them don’t trust sponsored social media ads.  

Therefore, if you solely focus on sponsored ads to increase your brand, business or product awareness, you might end up spending huge chunks of money on the marketing strategy and still fail to get the desired results.

Unfortunately, high customer acquisition cost (CAC) can kill your business , especially if the customers that you get don’t generate consistent and long-term revenue. This is because your return on investment (ROI) will be low and at some point, it may not be sufficient to keep the business running.

Organic and sustainable growth is paramount

Don’t throw in the towel yet, even if you are feeling like your business is sinking due to high CAC. You can still salvage it by cutting on the amount you spend on customer acquisition. The best way for reducing your CAC is to focus on the organic growth of your business. You can achieve this by enhancing the business’ internal sales to increase its output. This can often take place by making each and every customer touchpoint a shareable moment.

Although there’s no single formula for the generation of organic growth, virality has been reported by many businesses from various sectors and industries as one of the best approaches. Virality is the tendency of a piece of information/content to be spread rapidly as people communicate. While making something go viral is difficult to achieve, shareability is something that’s easier to implement. For users to start sharing your product or services online, you need to provide them with a great experience filled with shareable moments. This could be providing them with shareable badges, achievements or even quotes.

Use your existing customers well to drive down CAC

People trust people. Your customers can make or break your business, depending on the level of satisfaction your business provides them. You treat them well and they reciprocate with gratitude and loyalty. Otherwise, your reputation will be at stake.

Your potential clients are more likely to trust their friends and family members who’ve had an experience with your product or business than your marketing representatives, commercial ads, your assertions about it or any other information on the web regarding it. Therefore, you should take anything they say about you very seriously. 

It is not only important to ensure that you do your best to satisfy the needs of your customers, but also get them to talk about your brand experience on social media. Their feedback can bring lots of referrals that could see your conversion rate hit levels you’ve never imagined of.  For that to happen you need to provide your community with opportunities and tools to talk about you with their friends and family online.

Although social media is vast, your presence should not miss on Instagram. It is like everybody, including your existing and potential customers, is on the platform. So, you have million-dollar opportunities to exploit there.

Pukket Is Ready To Help You!

It has never been easier to identify, evaluate and reward customer advocacy at scale. Pukket’s will automatically take care of all those tasks for you to reward your customers (or employees) for their advocacy. This is often called community marketing. Your community of customers and employees are four times more likely to share their opinion about your brand if they are rewarded in return.

Pukket is the perfect social rewards platform, enabling you to encourage your community to start sharing their related experiences on social media. On that note, Pukket is set to walk with you until you get the desired results. Together we’ll encourage people who’ve used your products or services to share their experiences and increase awareness about your brand.

Forget the costly influencers. Work with Pukket to achieve higher customer loyalty without breaking the bank for organic and sustainable business growth. Click here for more details about our product.