One of the biggest mistakes I see companies make when scaling is broadening their target audience.
More people → more potential customers → more revenue
But it’s the fastest way to increase your churn and put your profitability at risk.
In this article, I’ll explain why and what you should do instead to grow faster.
The problem of being too broad: churn
When I launched lemlist in 2018, it was solving a very specific problem: helping sales teams get more replies to their sales prospecting emails.
But as it grew, I realized that it solved a problem for a lot of different personas…
- Sales teams
- Outbound agencies
- Growth marketers running outbound campaigns
- Founders launching their outreach…
So I decided to target everyone.
This led to a high churn since none of the targets benefited from 100% of features we shipped.
When the budget is tight, no one can afford having a product that they use partially.
Another reason is that when you target a common pain point for all those personas, you leave your competitors the room to target their more specific needs.
To reduce churn, I used this step-by-step strategy that you can apply to your business if you’re in a similar situation 👇
Reduce churn and maximise profit
Look at your founder-market fit
Ask yourself these questions:
- Who do I truly want to help no matter what happens in the next 10 years?
- Am I passionate about the market and the problem I’m trying to solve?
Focus on that one persona.
Find who benefits the most from your product
Suppose you’re making $1,000/month from your e-commerce store, and I help you increase your conversion rate by 10%. So you make $1,100.
If my service costs more than $100, you’re losing money.
But if you make $1,000,000, this 10% increase will result in $100,000. The value now is a lot higher, and the likelihood that you will work with me increases.
Focus on the high-value features
Since we refocused on sales teams, we developed LinkedIn features in lemlist.
Because it’s the primary platform that sales use for outbound.
We launched two things:
- LinkedIn voice notes
- lemlist freemium that you 500 free credits each month which translates into 100 leads’ verified emails. Sales teams use lemlist extension to scrape LinkedIn and push their prospects directly to the campaigns
Remember, the best way to be profitable is to stay lean and specific to what problem you’re solving for your clearly defined ICP.
Every week I’ll publish new articles on how to build and grow a B2B business that generates millions of dollars.
Without any BS and giving you practical templates that you can steal.
Peace, love, and profit 💰
G. ✌️
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