I have just re-learned a very important principle about business and marketing, and I thought I would share some of this thinking.
Usually when I think about business, I am all about the back end. That is where the money is made, period.
So when starting new businesses, I always think about how to build the back end.
This is a mistake, and I’m forcing myself to start thinking differently.
Because what do you need most when you are starting a new biz?
To clarify: first-time customers... NOT repeat customers. Not yet, anyway.
Your #1 priority is developing a system where you can predictably and consistently acquire new customers at a break-even cost.
Don’t even think about back end yet. Yeah, keep providing your existing customers with value... but don’t spend all your effort on the back end.
The trouble with most marketing advice is that it is generic. “Focus on the back end” is common advice, and usually it is good advice. After all, that’s where businesses make money.
All good advice is only good at certain points. It depends on where you are and where you’re going. If you already have 100,000 customers, you are an idiot if you allocate 80% of your resources to getting new customers. Hustle hard on your back end systems. Build out your autoresponders. Add coaching and high ticket live events to your funnel. Whatever.
But it’s not the priority if you are a startup. Customer acquisition is. What is the optimal product format for generating customers? At what price? What media channels work best to reach our ideal customer? What type of offer do they respond to?
Those are the questions you need to answer. You need to focus on sales... not profit. Not yet.
All this just slapped me hard in the face this morning while re-reading "Ready, Fire, Aim" by Michael Masterson. Excellent book, packed with wisdom from one of the smartest business and marketing minds alive. Deserves regular re-reading.
It slapped me hard because I realized I’ve been directing my focus in the wrong place in the new business we are starting.
It seems obvious now, but when you are in the middle of it... it just isn’t.
If you are in the midst of starting a new business, I hope this helped you out too.
note: I usually don’t do too many marketing posts here... and actually, I had this brilliant idea for a kick ass blog post last night... I forgot what it was when I woke up. So I decided to write this instead. Oh well.
Picture is of some hot air balloons, because that's what people put on their blogs when they don't know what else to put up pictures of.