Growth Economics: Scaling Your Online Business

November 17, 2020


Introduction

Growth is the word every business wants to focus on. It can be an interesting dilemma. Some early stage businesses struggle to get initial customers and clients, while others are inundated with business and have a hard time scaling up to handle the demand. This is why setting up the foundations for sustainable growth and nailing the fundamentals as early as possible is so crucial for success.


So how should you be thinking about growth and what are some of the actionables that you can take to bring your growth to the next level?


Growth Principles


1. Talk to your customers

Leveraging your initial customer and client base is the best route for garnering insights into the real value in your product or service. As we have spoken about before, these people are a gold mine for data insights and serve as some of your best ambassadors.

Jeff Bezos makes a point of being customer obsessed with Amazon and their customers. It has been one of their core values since the inception of the company. Having the type of customer obsession that allows you to connect with your customers on a regular basis has allowed Amazon to create an extraordinary product experience.

It is your job as a business owner to be informed about your customers and your business. Using data from your customer insights can help you make better informed decisions and extract meaning out of your customer’s buying habits. We’ll look at how you can extract this data and garner insights from your customers below.

Your existing customers are also your best marketing asset. Over indexing on value creation for your initial customers and clients will open more doors that you think. The power of word-of-mouth and referral based marketing is still the most potent way to get more business. Your clients and initial customers are your network. Viewing them as part of your professional network allows you to reap the benefits of world-of-mouth network effects as the word of you over delivering spreads.

2. Workflow Optimization

One thing many businesses lack is creating the environment in which growth can occur. If your internal processes are not optimized, you are going to run into roadblocks and bottlenecks that prevent you from scaling and growing your business. This is true for both internal processes, as well as customer and client facing development.

Documenting these processes for your team allows you to harness efficiencies of scale as you grow. Having an environment that can facilitate growth is just as important as being able to generate new leads and business in the first place.


3. Lead Generation

Without leads and customers you are dead in the water. At the heart of any successful lead generation strategy lies the most fundamental of principles; relationship building. Building and nurturing relationships with early customers and adopters of your business will set a solid foundation upon which you can scale.

Optimize your lead generation process. Create a way to nurture your leads once they indicate interest in your business.

  1. Create a way to capture leads (lead Magnet and Opt in)
  2. Build a way to nurture and empathize (Email Nurture Sequence)
  3. Take them on a journey (communicate your value proposition and show them the transformation)


4. Product Market Fit

You reach product market fit when you have built something that customers want. This sounds extremely simple, but again, the means by which you reach product market fit stand upon the foundational pillars of the relationships you build with initial customers.

I personally think it is better to frame product market fit as an ideal to continuously work toward. In this way, you nurture the iterative feedback loop of customer insights to build new and improved versions of your product and service offerings over time. This is why you should put such a large emphasis on community and collaboration in the early stages of your business.


5. The Emotional Connection

This one is powerful. As consumers, we make purchases based on emotion, and then justify them through rationale after the fact. Think about it, in any market there are tonnes of competing businesses and brands. What makes you choose one business over another. It is always more than simply about what the product does, it is also about what it makes you feel.

As a business owner, you cannot underestimate the emotional decision making process your customer will be going through when interacting your product or service.

“Emotions are so powerful they influence our perception, decision making, and even memory — the more emotional an experience the better we remember it.”

Incorporating emotional design into your product or service has the ability to make a lasting impression in the mind of consumers. Remember this when you craft your message and your copy.



The Action Items

1. Conduct Customer Interviews

As we have mentioned, talking to your customers to gain further data insights about their problems and decision making process is integral to your success. Conducting customer interviews is a great way to gather these qualitative and quantitative insights. You should be asking the types of questions that help you to hone in on the problems your customer is facing. You should also avoid asking questions that are not going to elicit insightful data about your customers and their lives.

Check out our Customer Interview cheat sheet for all the best questions your should be asking, as well as the types of questions you should avoid when reaching out and interacting with your customers.


2. Build Virality into your products

At the end of the day, your growth must be correlated to the number of people who know about your product or service. Thinking about ways to bake virality into your products when building them is going to be key for long and short term network effects.

It makes it a lot easier to get awareness when you make it as easy as possible for people to share and talk about what you are building. Some of the ways to build virality into your product are as follows:


Create a Two-Sided Reward

  • Create an incentive for initial users to invite their friends to use your product. Paypal and Dropbox are two excellent examples of this viral growth strategy. Each company offered rewards for both new and existing users who signed up for their products.

Appeal to Users' Vanity

  • Just as we mentioned already, we are consumers driven by emotion. Appealing to emotional decision making encourages customers to spend more time using your product or service.

Build for Collaboration

  • Apps like Google docs allow you to "Share" files for collaboration between users.

Make your product embeddable

  • Create the ability for others to embed your product within your website.

Incorporate Social Sharing

  • incorporate social sharing buttons that can link back to your product.

Utilize Email Signatures

  • Attach promotional signatures to all messages that are sent relating to your product or service. Hotmail’s signature line at the end of every email helped them grow from 20k users to 1.5M users over the course of 4 months in the early days.


3. Leverage social proof to increase users

Social proof from initial customers and clients can all build to create a Proof of Work that compounds as you grow and scale. All of this serves to reinforce trust in the mind of the consumer and establish you as an authority in your niche.


So what types of social proof should you leverage?


Recommendations From Industry Experts

As we have already spoken about, word of mouth is powerful, and sharing reviews from industry experts can really solidify your brand image in the mind of the end user. Use visual testimonials from leading experts when possible.



Number of Users

Providing visual evidence around your user volume shows potential leads that you have a bustling community of users already. It’s important for users to see that a significant number of others have signed up before them.


Integrations With Other Trusted Companies

Integrations show that customers can use your product with a variety of other tools. They are a strong form of social proof, as users will be able to easily identify with the logos of the other tools they’re currently using. The more integrations and capabilities a tool has, the more credible it will appear to potential customers.

Don’t worry if you are not building a Software as a Service product. Another way to do this would be to showcase your strategic partners on your site and allow customers to see how you are working with other experts in your industry.



User Testimonials and Case Studies

This is another popular example that is used by many SaaS companies. Users will be more motivated to try a service that has already proven to be helpful for others.


This is the same for case studies. Create eye catching success stories of those who have used your product or service.










Review Sites

Showing evidence that you have a good rating can build trust with your audience. Use visual social proof of user reviews from other reputable sites when possible.




In Conclusion

So there you have it. Taking some of the growth principles above and setting a solid foundation upon which to take action is the real starting point. The fundamentals of building out those initial relationships with customers and early users cannot be overlooked. Doing the things that don’t scale early on allows you to set up the processes and workflows that help you to scale when you really begin to get close to product market fit.



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