Webster’s dictionary defines traction as “the support or interest that is needed for something to make progress or succeed.” Many startups and small businesses struggle with the issue of maintaining traction in their market. This blog will deal with the issue of how to achieve traction in the market and how to keep your organization properly aligned to support it, and to help you re-focus on the key components of traction.
The statistics are staggering, and the reality is that only 10-20% of startups and organizations survive in the long term. According to the US Department of Commerce 78% of new businesses will fail within 5 years.
There are plenty of other items to discuss which we will be doing in a subsequent post, but as we start the new year, this is a great opportunity to go back to the basics and refocus on foundational items to achieve traction.
Why us? What gives us the right to have this discussion?
Innovating Partners works to help your business empower our clients mission strategy, align their message to the right target market, to achieve success and substantial market business growth. We are not merely sales consultants or marketing consultants. Rather our focus and expertise are on go to market consulting using various proven tools and strategies to help our clients. Our experience has enabled us to navigate through many market trends and economic climates. We’ve kept pace with the rapid changes in technology, data-driven analytics, media and product
This post is based on our experience from working with startups, government agencies and small businesses.
What is traction?
We define traction as how consistently your clients are buying and using your product or service and its impact to positive revenue growth. The most successful organizations can build and maintain positive traction by bringing clarity to their business model around four key principles. They excel and clearly articulate the following; what do they have to offer, Who is their customer, a clear value proposition, and articulate the benefit of the offering to the consumer or organization purchasing their offering.
There are plenty of discussions regarding business models, investment models and financing process, but our intent is to provide clarity to four critical areas that can make the difference between success and failure.
We believe that clarity is the key to effective and successful communications with clients. Donald Miller in his book (Miller, 2017) Building a Story Brand makes this observation “The key is to make your companies message about something that helps the customer survive and to do it in such a way that they can understand it without burning too many calories.” Like Donald Miller, we believe that clarity is king.
This blog is intended to help you reconsider if your current messaging is achieving the level of clarity necessary to gain traction and business velocity.
Let’s go back to basics:
What is the offering or product?
Defining the product or service – We know what we are about to say may sound obvious to many. Can you define your product or service not from the perspective of technology or engineering, but from the customers buying perspective? Customers want to know what you have to offer, and they want to know that in the simplest and most direct manner. You should be able to define your offer in a simple sentence or two using everyday language. If it requires more definition using words that one needs a dictionary to look up, then chances are your offering is not connecting with the intended audience. Remember this simple phrase “if you confuse you lose.”
One good way to test your message is to ask yourself and others some of these simple questions; Do they understand what your product does and how it can help them?
Does it have a clear value proposition? We will have more to say about this further in this blog. Does it articulate how it will make the prospective buyer’s life better?
Who is your customer?
The second question to consider is who is your customer? Once again this seems to be an obvious question to businesses owners. When we work with startups and small businesses, we do a whole workshop around this question. The results are very consistent. When business owners are asked this question they immediately answer with the utmost certainty in a nanosecond. Two hours later we are still discussing the details around what the customer looks like. Majority of customers, whether in the business or consumer marketplace, want to know how your product or service will make their life better. Answer this question and you will be able to proceed to have more substantive conversations regarding features, price, etc. When you answer this question – Do not be fooled by your own bias. you must be clear on your customer profile, even to the point of creating a buyer persona –
Here are some questions that your customer might have regarding your offering;
- Is it easier or does it make it harder, does it improve on how they are doing today?
- What is entailed in deploying the new solutions?
- Who will do it? How will they do it?
- Do you know who is the ultimate consumer of your product and how do they buy it?
Knowing your customer and their buying habits and communicating in “their” language differentiates the successful businessperson from the unsuccessful. So, we ask once again, “who is your customer?”
A Clear and Compelling Value Proposition
This area cannot be underestimated. One of the most important principles in any business is to have a clear and compelling value proposition. Business owners must fully grasp their customers needs and wants. In short, they must know their customers inside and out. Secondly, business owners must be persuaded regarding the value that their product and service provides. Simply put, business owners must BELIEVE in their offering. This is critical because it is belief that drives behavior. If a business owner or key principal does not believe in the offering, it is then that their pitch will appear contrived or salesy. But when that person believes in the product, is persuaded by the product and its associated value it delivers to the customer, it is then that their presentation resonates by the deep held conviction of that belief.
Lastly, your messaging, marketing and presentation of your offering must always include a clear and compelling value proposition. That value proposition cannot be predicated on a one-sided vendor perspective, but rather must be based on how it meets and solves the customers problem. Remember that the graveyard of failed businesses is littered with companies who had developed great ideas and great technology. However, they never succeeded in large part due to the lack of a clear and compelling value proposition.
Here are some questions you might want to consider; Do you understand your value proposition, and can you articulate its compelling value? Is that message reflected in every piece of communication that your company presents? Do you have a sense of passion and conviction regarding your offering? Have you tested your messaging in your target market with select customers and listened to their feedback?
Do not become another victim due to lack of clarity regarding your value proposition.
What’s in it for the organization
This is where all the elements we discussed what is your offering, who is your customer, a clear and compelling value proposition come together to define value to the organization. The final question that needs to be answered is “how does this product or service make my life better?” It is here that you can identify the complete spectrum of value between you and your customers.
We started out by defining traction as “the support or interest that is needed for something to make progress or succeed.” If you are an organization looking to raise funds, if you are an operational organization, if you are looking for an exit you need traction. Traction comes about by well-defined disciplines and processes that generate momentum and velocity. So, do not be swayed by the shiny objects of technology, market size, etc., business is all about traction. Once you achieve it on a sustainable basis, then you know that your product delivers value. The results of this are evident in increased sales calls, increased customer and most importantly, increased revenue.
A Word of advice to those struggling without traction;
“Beatings will continue until results improve”
Leaders are born in moments of difficulty. If your organization is dealing with revenue challenges, product design problems, and lack of customers, this can be the result of a lack of clarity in your market and message strategy. Failure to address these issues will most certainly – hinder an organization’s ability to gain positive traction. Organizations are well advised to invest time in achieving clarity around the root causes that are preventing traction before blaming others for the lack of results.
In future posts, we will address subjects such as team composition, product testing, small viable markets, and other topics focusing around achieving sustainable revenue. Please subscribe to keep up to date on the discussions and tools that can help your business growth and feel free to reach out if we can be of any assistance.
Michael Queralt and Mark Acevedo are key principals at Innovating Partners, LLC. Innovating Partners helps funded startups and small businesses find a path to market fit, generating new sales and revenue growth.