One of the biggest mistakes founding teams make is wasting time and energy on developing superfluous marketing and sales collateral. If you haven’t found your ideal customer profile or locked down your marketing messaging, anything you create will potentially be targeting the wrong customers.
I see this happen all of the time as I work with GrowthX Capital portfolio companies, as well as GrowthX Corporate clients. Here’s the advice I give to help innovators develop the collateral they need at each stage of the market development process.
Wasting time on the wrong collateral
Imagine this scenario: You’re on an early stage sales call with a potential customer. The call is going well, and as you’re ending the call, the prospect asks you to send over a one-pager or deck for them to “circulate.” You agree and the call ends.
Then the panic sets in. You don’t have a one-pager or deck to share, and you’re not even exactly sure what they’re looking for. You drop everything and spend the next two days trying to build out a new piece of collateral from scratch, thinking it will be the key to selling this account. You send over your amazing new deck and wait. You never hear back. Sound familiar?
Not being prepared with the right collateral can cost you valuable time.
So what’s the right marketing and sales collateral to have?
The right collateral depends on what stage of market development you’re at. Generally speaking, there are three phases:
- Market Discovery: You’re pre-revenue or you’ve earned some of your first revenue from referential customers. You’re in the initial stages of figuring out your Ideal Customer Profile (ICP). You may have several ICPs at this point and are still searching for hard data points that validate a clear winner.
- Market Foundation: You still be pre-revenue or have some initial customers from references. You have a strong hypothesis about your ICP and you’re in active communication with potential customers that match the profile. You have not collected enough data points through every stage of the sales funnel to fully validate this ICP, but your messaging is starting to form a consistent narrative. You have enough information to focus your limited efforts on this group for a market development sprint.
- Market Validation: You have secured several customers within an ICP and have demonstrated a repeatable sales process. Your messaging is aligned with this ICP. The next step is to acquire more customers by increasing the volume of your outreach and collateral.
At each stage of market development, what you need from a collateral standpoint will evolve, but the principle will stay the same:
Only build what you need, not what you think your customers will want.
In Market Discovery, you should feel comfortable having little to no collateral at all. Your “collateral” needs to be a consistent pitch that you test, iterate, and refine over the course of several conversations.
If a sales prospect requests collateral, be honest about the stage you’re at and explain why you do not yet have collateral.
Remember, you want to seek fit, not force a sale (and experience high churn).
Once you’re ready to start closing business and enter the Market Foundation stage, you’ll need some concrete collateral to show. We often think that in order for our customers to buy something from us, we need a magical combination of decks and documents that make us look legit.
The truth is that in most cases, the only thing that you need to complete a sale is a one-page website to point people to and a sales deck with a little more information to guide your pitch presentation.
In moving from Market Foundation to Market Validation, you’ll focus on picking up key pieces of tangible customer data points, such as:
- Brand Logos
- User Statistics
- Case Studies
It’s only when you’re in the Market Validation phase that you need to start resource-intensive collateral development efforts, like content marketing, explainer videos and white papers.
So now that you know what to build (and what not to build), the next important step is ensuring that the collateral you develop is created with the intent to change and iterate rapidly.
Founding teams, especially those with no formal marketing or sales background, can spend countless hours finding the “perfect” wording for a website or deck only to realize that it doesn’t resonate with their audience.
You wouldn’t ask a marketer to write your code, so why ask your developer to write a deck, call script or website copy?
Until you have a very good idea of your Ideal Customer Profile and have validated verbal messaging that works to drive interest, develop need and win new business, you should avoid spending significant amounts of time and capital creating too much collateral.
Instead, build out a website and deck that focus only on your core value propositions (i.e., what you do for your customer; not just what you do). As you have more conversations and more customers, you’ll see patterns emerge that will validate or invalidate your messaging hypothesis.
After several iterations, you’ll have a market message that more consistently grabs the attention of your ICP and leads to new business.
Only when you notice that your messaging is regularly having the intended effect on your ICP should you begin to scale your collateral based on that messaging.
The success or failure of your startup rarely comes down to a single, major decision. Most often, it’s a collection of micro-judgment calls. For example, how do you respond when a potential customer asks for something that you do not have?
Just because a customer asks for collateral does not mean it’s time to create the collateral. Make sure you know the stage you’re at, be transparent with your customers and stay focused on testing, measuring and learning – that’s how you continue to advance towards product-market fit.