In a volatile economic climate and market, founders must employ smart growth strategies while focusing on efficiency. For early-stage companies, the onus is to show investors a sustainable and solid path to profitability focused on topline and efficiency.
Confluent’s President of Field Operations, Erica Schultz, explores different tactics businesses can employ to scale revenue and increase efficiency in the current macro environment.
Align your customer and persona understanding
As you look to scale your business and make your processes more efficient, it’s essential to foster a shared understanding of who your target customer is. This alignment involves asking these questions:
- What does your ideal customer profile look like?
- Who are the different personas within your customer?
- Where do they show up during the engagement cycle?
You can answer these questions by tapping into market data and insight. This information allows us to learn how our customers engage with our products and our various marketing platforms or how they use other technologies or services.
The key is ensuring your business takes in these market signals so the different functions can build a deeper understanding of your target customer and specific personas.
“Everyone in your company should share a common understanding of who your customer is.”
Design a connected customer experience
Another approach to scaling revenue involves accelerating the customer adoption and expansion phases. You can do this by designing a modern customer experience process that accounts for the combination of digital and human touch points. The process must also be well-connected and contextual so that you take different customers and personas on different journeys.
As you think about driving expansion with your customers, focus on understanding these three questions:
- How do your customers derive value from your product?
- How do your customers measure value in their current use case?
- How should you position the next one for expansion?
Finally, tie the whole customer experience to your ultimate goal—driving customer love and advocacy. The bottom line is to figure out the moment in your customer journey to ask them to give back and speak on your behalf as an advocate for your company.
Combine product-led and enterprise-led growth
Combining product-led growth (PLG) with enterprise sales is a multiplier effect. When engineered right, combining PLG motions with enterprise sales accelerates growth by engaging with different customers in precisely the way they want.
Introducing enterprise sales into a product-led business might make your customers more visible, enabling you to have a clearer relationship with them, and allowing you to access richer feedback.
Most companies, however, think they must choose between product-led and enterprise sales. In reality, it doesn’t have to be an either-or. Start with one model and grow into the other. A hybrid model can benefit your customers, allowing you to serve different personas more optimally.
For instance, you may begin with a product-led model serving developers. Then as you get more into the mid-market and the enterprise, you might see bigger expansion opportunities with your customers. This might present a chance to complement product-led engagement with enterprise sales.
Ultimately, you must consider both models’ payoff and whether you can serve different personas in your base with both.
Promote a consumption-based culture
Moving away from a subscription to a consumption-led model can bring several benefits to your business. The consumption-led model enables you to recognize customer revenue based on actual usage versus the subscription contract and associated promise of usage.
“It takes a cultural and mindset change to embrace a consumption model within your company.”
How can adopting a consumption-based culture help you scale revenue? The more resources in the company and the more functions focused on maximizing customer usage, the higher the chances to scale revenue, as you’ll become more aligned with customer outcomes.
Maximize growth while increasing efficiency
In the early stages of your company, it’s crucial to show your investors your path to profitability. How can you maintain the topline while increasing efficiency, knowing both are important to the market in the current climate?
You can tackle this in three ways:
- Stay focused. If you’re an expanding company, make some focused bets—on a specific segment, industry, or market. Betting on too many at once might spread you thin as you struggle to serve them all effectively. The trick is to invest only when you have enough payoff from the first segment or industry.
- Invest in a repeatable playbook. Having a clear playbook for onboarding new team members is essential, enabling them with what you’ve already learned. Take useful learnings from your teams and capture them in a living playbook that you can use to onboard new hires.
- Solve for speed. Increase efficiency by thinking about how to solve for speed. In every process, whether hiring a new employee or onboarding a customer, think about how long that process takes you and how you can cut it in half the time.
Drive transformation in your team
These scaling strategies might demand operational changes for your company. The following steps can help you drive these transformations without causing disruption or friction within your business.
- Share the logic behind changes. Your team wants to be taken on the journey that led you to introduce a new persona or change from a subscription to a consumption model. Whatever the change is, take your team on the journey and help them understand your logical reasoning for the transformations.
- Help your team feel confident in this transformation journey. Every individual faced with changes will naturally start thinking about whether they will succeed in the new environment. Think through your enablement plan to equip your team to succeed on any new metrics you will monitor.
- Be clear on your new metrics. You must be clear on the new behaviors you’re looking for and what new metrics you’ll be measuring. Ensure your leaders are equipped to coach and monitor those new behaviors and metrics.