8 common Go-to-market mistakes + 3X growth with FB Ads
8 common Go-to-market mistakes + 3X growth with FB Ads
8 common mistakes with your GTM-strategy (unclear ICP, wrong positioning, missing FIUU problem, wrong sales process + 4 more...) + bonus post of Aazar Ali Shad about 3x Growth with Fb Ads.
Hey everyone,
in today’s article, I will share with you 8 common mistakes startups make in their go-to-market strategy.
If you want to launch your product on the market and grow your business, you need to follow a powerful B2B SaaS Growth Strategy. So make sure to avoid the most common mistakes.
By the way, not having a go-to-market strategy at all and not being clear on what to do and how to do it is probably the biggest mistake at all. So even if you are busy, take time and work on your Go-to-market strategy.
#1 Unclear Ideal Customer Profile (ICP)
Mistake #1 is not being specific and clear on your ideal customer profile (ICP). There are different nuances of this mistake
You start building the product without knowing who you build the product for. This is mostly the case if you skip the part of market research, customer interviews, and writing down your ICP. Unclear ICPs lead to wrong sales messaging and unspecific value proposition, which means you will barely win new customers for your product.
You think you know your ideal customer profile but you are way too unspecific and broad. The more specific and niche you are with your ICP, the easier it is for you to grow your business.
A great ideal customer profile should include information about the company (size, employees, revenue, country), the role (HR Manager, Marketing Manager...), their pain points (e.g. expensive to hire senior engineers), and triggers (that are signals for you that they are interested in your product; e.g. 10 open job postings for senior engineers). A day in the life of your customer and understanding customer behavior are also great ways to better draft your ideal customer profile.
For more information on that, check out SaaS Growth Strategy Guide & How to create a powerful ICP
#2 Wrong Positioning in the market (Segmentation)
Mistake #2 means you are going after the wrong segment in the market.
Different segments of the market have different expectations of your product, your messaging, and the way you market and sell the product. Let’s take the example of CRM software - when you target the enterprise market they expect you to show them the product (sales demo) and have a dedicated account manager taking care of the implementation - maybe even meeting a couple of times face to face. For them having a free trial of the product and being 10€ per month cheaper is not relevant.
On the other hand, targeting the prosumers and early-stage tech startups with your CRM software could mean a completely different approach. For them, they expect to test the product (product-led growth), maybe even they prefer to have no sales touch at all, and being the cheapest CRM tool on the market is a powerful value proposition.
So when it comes to positioning in the market, you can target the lower segment (consumers, prosumers, and SMBs) or the upper market (mid-market & enterprise) customers. And you can position yourself as the premium player vs. the low-cost player.
Your positioning defines your go-to-market strategy, especially your sales process (product-led vs. sales driven), your pricing strategy, and the way you market yourself (brand message, sales messaging, value proposition).
#3 Unclear Value Proposition and FIUU Problem
A lot of startups focus so much on building a product (and features) and completely forget why they are building the product in the first place. You need to be specific and clear on the value of the product. Write down the FIUU problem (frequent, important, urgent, underserved) of your ICP and how your product is solving this problem. What is the value of the product for your customer?
So whenever you talk to your customer (landing page, ads, cold emails...) you should talk about the problem you’re trying to solve for them and how (your value proposition).
Work with your team on your value proposition and how you communicate it. Make sure everyone is aligned and communicate it in a similar way. Also, make sure that all your customer-facing communication follows consistent messaging.
Get specific on:
What is the big problem of your ICP?
What result do you deliver? (more revenue vs. less cost vs. lower risk)
Tomasz Tunguz says
“There are three kinds of software value propositions. Software that increases revenue, software that reduces cost, and software that promises improved productivity.”
How do you achieve this value proposition (3 bullet points)?
Having a simple, easy-to-understand and to-the-point version of your value proposition (TK Kader calls it the 1-sentence value proposition) is great when you need to get to the point fast and only have a limited amount of time to create interest and drive curiosity. Great examples are cold calls with prospects, introductions on events or podcasts, or elevator pitches to potential investors.
This is a template suggested by TK Kader for a 1-sentence value proposition:
Our company <XYZ> builds software for <ICP> that enables/empower/helps them to <Result> by <How>
#4 Wrong sales process (product-led vs. sales-driven)
Based on your positioning in the market and the segment you are hunting, you should carefully decide on the right sales process (product-led vs. sales-driven).
The decision if you should follow a product-led growth vs. sales-led growth vs. hybrid model (combination of both) is based on:
how your customers actually want to buy your product (not what you personally prefer)
the complexity of your product // how easy can you deliver the value
the complexity and length of the buying process
the price point of your product
The more complex the product, the longer the sales cycle, and the more expensive your product, the better is a sales-led strategy for you (and vice-versa).
Not being specific on your sales process is also a common mistake. This happens, when you never really ask yourself what the best customer journey looks like (visualize the ideal customer journey, e.g. using a Miro Board). Also, make sure that your go-to-market does not end with the acquisition, it includes activation, buying, retention, and referral (your SaaS Growth Flywheel).
#5 Focus on acquisition only (ignore activation, referral & churn)
After you have identified your ideal customer profile, you will spend (in the beginning) all your energy on acquisition - and that’s totally fine. But after initial traction and first paying customers, it’s also important to keep an eye on your activation phase. This means, increasing your conversion from sign-ups to active users is a key element for your SaaS growth. Think about ways how you get new sign-ups as fast as possible to experience the AHA moment of your product. Depending on your sales process (sales-led vs. product-led) this could include different things (e.g. onboarding calls, product tours, webinars, checklists...).
Another common mistake is not asking your existing customers for referrals. Make sure you frequently ask your customers for referrals and even incentivize them to do so. The advantage of referrals is, that it’s cheaper (lower CACs) and more effective than acquiring new customers (higher conversion rates). Why? Because happy customers refer others to you (for free or for a small referral bonus) and they mostly refer peers to you (which is more likely your ICP).
Important about a referral marketing program are customer segmentation, timing & frequency, referral incentive, communication & messaging, and technical implementation & tools (learn more about it in this article).
More information on activation and referral you will find in the article on SaaS Growth Flywheel.
#6 Selling Features, not Values
When it comes to selling the product (on the landing page, cold emails, phone calls, sales demos) I see lots of startups trying to sell features, not values. Selling features mean you explain how great your product is, how many features you have, how it works etc... but completely forget that the customers only care about the value.
As Tomasz Tunguz says
“There are three kinds of software value propositions. Software that increases revenue, software that reduces cost, and software that promises improved productivity.”
So you need to communicate the values of your product, not the features (more revenue vs. fewer costs vs. improved productivity).
#7 Tracking too many KPIs or the wrong ones
Mistake #7 is that lots of startups either track zero metrics or way too many metrics. Not tracking KPIs at all makes it hard for you to know if you are on track and what things you need to focus and optimize on. But tracking too many metrics makes you lose focus on what’s really important.
I recommend having one Core KPI (North Star Metric) and 3-4 main KPIs. Additionally, to that, it’s recommended to track your SaaS Funnel with all conversions between the different stages.
The most used North Star Metrics are:
Revenue Metric (MRR; ARR; GMV)
Activity Metric (#bookings, #sessions, #calls etc.)
User Metric (#active user, #paying user)
Common Main KPIs are:
Total transaction volume (GMV = gross merchandise volume; especially interesting for marketplaces)
Revenue per customer (MRR; ARR)
Customer Acquisition Costs (CAC)
Churn Rates
Customer Lifetime Value (CLV)
Conversion Rates (from Traffic to Referral) for the SaaS Growth Flywheel
In order to track conversions, it’s key to clearly define the stages of your SaaS funnel (and also update them if needed). What exactly is a sign-up? What is an MQL or SQL? Or what is a product-qualified lead (PQL for product-led growth), active user, and paying customer?
Do you maybe even differentiate between a paying and successful customer? What is a churn? Make sure you define the stages of the customer journey once and make sure everyone in the organization uses the right terminology.
#8 Wrong Pricing Strategy
Mistake #8 is the wrong pricing strategy. Common mistakes are:
misalignment between pricing and the value of the product (pricing is not based on the value metric)
wrong pricing tiers —> mostly if you don’t know your value metric and the different types of customers you’re serving
undercharging —> Yes, increasing prices can positively affect your conversions (especially if you target larger accounts)
Pricing not based on the value is mostly a consequence of not being specific on the ICP and not measuring and knowing what the results of your product are. The value of your product can be completely different for a prosumer customer vs. an enterprise customer - even though they are using the same product. So make sure you know (and can quantify) the value of your product. A great way to do so is to measure the results using your product.
Example: Using your product results in:
For online booking software: x€ fewer costs per online payment (x€ fewer costs * #payments = value of your product)
For Invoicing software: x minutes less work per invoice (x€/hour * hours saved = value of your product)
For a sales management software: x more sales deals closed per month (x sales deals more * average sales deal = value of your product)
Another common mistake is to choose the wrong pricing model (flat-rate vs. usage-based vs. tiered pricing). Make sure your pricing is aligned with the different target personas (different needs) and scales with the value metric (e.g. number of bookings, revenue, requests, minutes, features, seats...).
3x Growth with Facebook Ads (Guest Post)
Let’s dive into the guest post by Aazar Ali Shad about 3x Growth with Fb Ads. If you like the content, you will find more in his weekly newsletter on Growth Marketing.
FB ads are powerful.
Here’s everything you need to know to crush FB ads (without expensive courses):
_______
1/ You don’t need to be a genius.
Facebook ads is about running hundreds of experiments & doubling down on what works.
You mostly need to understand the stages of awareness.
2/ Context exploitation with the stages of awareness.
Buyers are at different stages of their journey.
Top of the funnel: Unaware
Middle of the funnel: Just got aware
Bottom of the funnel: Relatively more aware
Here’s another way to look at it.
Start with number 1 first because 5 is the hardest.
3/ Enrich your contextual copy from customers' minds (user research).
You only need to ask 4 questions to do the research right.
Insight: Most people fail at it. I get my most ad ideas from research.
4/ Make Google Analytics and Facebook ads analytics your best friends.
Many folks do get conversion but they are not tracking it right.
You can only have 8 events on Facebook. Choose them wisely.
Here are mine: Lead, Initiate Check out, Add to Cart, and Purchase.
5/ The most common question: How much budget do you need to invest to see the results?
$10K but you may need more to achieve statistical significance. I spent $50K to really see the CAC to LTV ratio properly.
You also need to be patient. I made a loss in the first month before becoming profitable.
Lesson: Don't lose hope too early.
6/ Your customers need to know, like and trust you - campaign structure.
ToFu: Lookalike, broad, and a specific interest (I chose gifted kids)
MoFu: Interacted with 90 days on socials, video watchers, and web visitors (180 days)
BoFu: Leads and visitors who didn't purchase.
7/ Engineer ads that don't look like ads.
ToFu: Show, don't tell - Demonstrate the value of the product. Surprise with great thumbnails & 3-seconds hook.
MoFu: User-generated content or user testimonials work well.
BoFu: Answer objections & retarget with an irresistible offer.
8/ Stellar creatives get the attention, great copy lures the interest.
Your first line needs to call out the pain that users are going through *at the moment*.
Your copy's job is to create the desire to learn more and click.
Example here:
9/ Landing pages lead to purchase.
Be clear with expectations.
My checklist: What, why you, how does it work, why should I trust you, and what are the next steps.
Your hero image needs to show the product in action.
Use this thread for landing pages:
10/ Come up with novel ad concept ideas that stick.
Find selfish benefits --> Then exaggerate a little --> Tell it in a story format with the surprising start and end.
Make it concise and compelling.
Most important: Invoke emotions - Some Ideas
11/ What gets measured gets managed.
Your primary metrics to make decisions are: ROAS, CTR, CPC, and Cost Per Conversion/Action
The key here is to have at least two different attribution sources to track conversions.
Analytics should lead you closer to the truth.
12/ Don't make these cardinal mistakes to avoid $$$ leakage.
Patience, time, and hope are crucial - don't lose it.
Don't use dynamic ad creatives early on. It does not give you metrics.
Don't use traffic or engagement ad objectives, instead use conversion to drive performance.
13/ Ads are like dating, email is where they say "yes".
Not everyone wakes up in the morning to buy from an ad.
Punchy and value reiterating welcome emails warm prospects. Abandon cart emails reminds them to purchase.
Email marketing lessons are here:
14/ The ultimate hack to Facebook Ads is *experiments*.
Experiments you should definitely try:
- Copywriting (first line)
- Headlines
- Images and video creatives
- Different intros of the videos
- Detailed demographic audience: engaged shoppers & more
- Organic vs branding
15/ How to scale your ads the right way?
Horizontal scaling: Test different audiences and creatives.
Vertical scaling: Add more budget but fewer audiences.
Insight: Use campaign budget optimization at this point with the best creatives and audiences.
Grow your business with a powerful strategy
Don’t forget to download your FREE copy of the SaaS Growth Strategy Worksheet.
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References: This article is inspired by TK Kader (5 Go-To-Market Strategy Considerations), Techstars (The Top 10 Mistakes In B2B Sales) & Pierre Lechelle (6 Mistakes that will kill your B2B SaaS Startup).
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