So you raised (or you are about to raise) some investors’ money and you are wondering what you should spend it on.
The answer to that question is: it depends.
It depends on where your company is right now.
One of the mistakes you could be making is to look at where other companies have spent their investors’ money on and decide to copy them.
Why is this a mistake?
Because, unless you are EXACTLY in the same situation, the choice they made is most likely not the right choice for you.
In particular, when you look at big companies raising money and spending investors’ money, they always go for marketing.
Following their example can seem the right option at first, since marketing is where you want to spend money when you need to grow your customer base by getting more exposure.
But also in this case, if your strategy is not tailored to your specific issues and needs and if your messaging is not fine tuned to generate customers, you are actually going to amplify problems and lower your conversion rates.
That’s why marketing should actually come last when it’s time to use investors’ money in a new project, even if it feels counterintuitive.
In this article I’ll explain how to develop the right strategy and use investors’ money in a clever and effective way.
Where should we start?
There is a say in conversion rate optimization (CRO) that goes like this: optimize before you maximize.
It means that you have to find the bottlenecks for your conversion rate looking at every step of the funnel. You find the conversion rate that has the lowest value in the funnel, and you fix that.
Then you go to the second worst conversion rate and you fix that and you keep doing that until you have fixed everything.
Gaining more visibility is the last thing you want to do, because first you need to make sure that when people get in the funnel, they will convert into paying customers. Too much visibility can actually attract simply “onlookers” who have no intention whatsoever to buy your product or service.
So what is the right way to spend your money?
Am I suggesting that you should do conversion optimization?
NO, I’m suggesting that you look at where your company is right now and you ask yourself and you proceed from the very bottom along a specific roadmap, which starts from Product Development and ends with Marketing.
Start with selling the product
The first thing you have to carefully develop and you have to spend money on is the product, because in order to sell something, you need to have something to sell.
If you got investors’ money, it means you already have a product and most likely you already have sold some of it.
If the product is ready, the next level is developing a sales team.
The product will not sell itself, so it’s crucial that you develop a way to sell the product and develop appropriate sales scripts.
If you haven’t acquired enough paying customers already, that’s the first thing you should do.
And why do you need customers?
You need paying customers because they are the best place to go get feedback about your product.
With enough paying customers, you can get feedback and you can improve your product, which is something you should strive to do as soon as possible.
It’s important to spend money on sales because it’s the first way to attract more customers, which will help you develop an even better product.
But you have to be careful: you have to refrain from chasing more customers with marketing tools and techniques because by spending much money on marketing you are basically amplifying the message you have right now, which is not yet a fine-tuned message.
Refine your message
A good message is fundamental to sell products and services, but at this stage, your message has not been optimized simply because it’s built on your assumptions and it has not been refined nor validated.
The process of refining the message is called positioning.
During the positioning work, you need to understand and define things like:
- what we do;
- why we are special;
- which customers we can best serve;
- the market we intend to win.
If you haven’t done any positioning work, you created a product that you THINK the market needs, but you haven’t yet got the feedback from the market to reposition the product correctly and to fine tune the messaging.
It’s only after you get a good customer base that you can do the positioning work.
What does it mean to have a good customer base? It means having enough customers where you can clearly spot power users for your product/service and top paying customers.
When you work on your positioning, you’ll need to interview these “different” customers and to have them tell you, in their own words, what’s so special about your products.
If you haven’t done this yet, this is where you should spend the money.
Only after the positioning has been clearly identified can you spend money on marketing.
Not all marketing is good
When it comes to marketing, you should not rush.
I understand you at this point are probably thinking:
“but Andrea, I really need to create marketing content, to do content marketing, because I need visibility and I need my website to get traffic, so I really need to spend this!”
…and I agree with you, you need visibility, but you need the RIGHT kind of visibility.
If you start to make content marketing at this stage, you are going to target very broad and long tail keywords just to get more traffic to the site.
This is one of the three capital sins of marketing, as discussed in another article.
It’s basically the mistake of casting your net so wide that everyone barely interested in the topic can fall in and reach your website.
This will lower your conversion rate tremendously, to the point that later you will have to spend money to fix that!
It’s a vicious circle that I warmly suggest you avoid starting.
The benefits of conversion content
Instead of casting this wide net and spending money creating marketing content, I suggest you take another approach, which is to create conversion content.
Conversion content is created by focusing on the product and the sales process of the product and not on SEO or marketing strategies.
This content answers the most common questions your prospect customers have when they are making their purchase decision.
Conversion content is created by talking directly with sales reps, who have a direct experience of talking to customers.
With this close interaction with sales, you can come up with content that is intimately tied to the product. The result is that the content you make and publish on your site will automatically contain topics and keywords that are very closely related to the product.
Therefore, any traffic that you will get to the site (which of course will be less than the traffic you would get by making SEO marketing content) will be extremely targeted and extremely likely to need your product.
These people will have the problems that your product is solving, and more specifically, they will be closer to the end of their buying journey.
They’re almost ready to buy because they are looking for this kind of information that buyers are looking for.
Finding the right keywords is easier
Conversion content brings you another benefit.
When the potential buyers search online for something that answers to their needs, they will drive traffic to your site and, with it, you will start to gather information in Google Search Console about the keywords they use.
Now, these keywords are very specific to the traffic with buying intent!
…and why is this important for you?
Because it will give you an insightful picture of what your buyers are looking for.
If you were to spend your money on creating marketing content, the keywords you would use would be so broad that you’d basically get no insight about the keywords with buying intent.
In fact, creating SEO marketing content requires an approach which is totally opposite and that starts from the keywords (mainly long-tail and with no buying intent) and then creates the content.
When creating conversion content, you start from the product and you create the content.
The purpose of this content is mainly to support sales activity and to answer the questions of your prospective buyers.
The keywords you get are a byproduct of the work you are doing to empower sales to do their job more efficiently.
But when you have those keywords with high buying intent, then you can use them to start making SEO marketing content and strengthen your ranking position.
Are you ready to spend your investors’ money but you don’t know where to start?
If you like this approach and you want to explore how conversion content can help your company to grow, just go to leadsandconversion.com/start and you’ll be able to book a call with me.