Scaling Your Business: Two Points

There are many ways to build a $100 million business. However, two things stand out the most when it comes to promoting your business to achieve this goal.

The first is your customer lifetime value (LTV). When you have a high LTV per customer, you can spend more on marketing because your customers are paying more than average.

The second factor is the effect of the virus, which allows your business to grow quickly without worrying about making money or spending a lot of money on acquiring customers.

Reason #1 Cost of living is high for the consumer

Customer lifetime value is the sum of all the financial value a customer brings to a business. Most marketers consider LTV and customer acquisition cost (CAC). For example, if a business has an LTV that is four or five times the customer's income, then the business is attractive and has great potential for investment.

The biggest factor in high LTV is frequent purchases. Companies that consistently deliver exceptional experiences have high LTVs. For example, an e-commerce company that sells add-ons may have a high LTV because their customers will return to them and buy more after they finish using the add-on.

Companies that sell subscription products and services also have high LTVs. Take Adobe for example Your customers will continue to pay for subscriptions to your services and receive updates from the company.

One of the biggest problems with obtaining and measuring LTV metrics is that the numbers can fluctuate wildly. This is because many factors can affect the cost of buying a customer. Also, when effective marketing channels are exhausted, the company will find new customers through other less effective methods.

Also, customers and employees who join the company are often strong supporters and act as representatives for the company and products, while future customers are acquired through paid marketing channels. shows little loyalty.

Reason #2 - Viral Influence

Another important thing that a business owner should consider is the viral effect of their business. Virality or network effects can be a powerful way to scale and allow a business to grow to tens or millions of users. Think about Facebook, Instagram, Snapchat, and WhatsApp and how these companies have reached millions of users thanks to the viral effect.

Companies that use this type of viral effect will have low or no cost to customers. Instagram, Facebook, and WhatsApp don't pay for getting users. It is your viral power that spreads and people use your service or product.

However, things are a little different these days. As more people get into business and create new startups, the market gets bigger every day. And the viral effect of the business became a significant achievement.

Many companies founded during the early days of the Facebook platform, such as Zynga, benefited from high viral rates and spread quickly. This is no longer the case as Facebook released many free viral channels and now business owners have to pay to advertise and get new customers through Facebook.

Challenges many businesses face today

The problem with startups today is that many companies find themselves caught between these two things. They have a low cost per user and limited viral effects for leverage. This combination, unfortunately, made it difficult to reach $100 million.

As more people go online and online business opportunities increase, every startup needs to think about these two features and how they can take advantage of them to grow their business. Providing a great product or service will not automatically improve your business.

 Take blogs for example. Now, there are millions of blogs in the world. Like WordPress, more than 1.97 million blogs are created every day. And this story is only about WordPress. MarketingProfs reports that more than 2 million blogs are published daily. So, take a look at these numbers and discover how you can stand out from the crowd and stand out from the crowd.

If your business plan is to produce the best product or provide the best service and expect customers to come to you, you are underestimating the market. While that means building a bad product or providing great service isn't important, it's not enough.

Competition is getting tougher every day, and one of the key factors that will determine the life and death of your business is your distribution or marketing strategy. When you have a great product, you need to know how to sell it and distribute it effectively so that people will buy what you have to offer.

Beginning, end

If you plan to build a company that is sustainable and attracts investors, you need a solid plan to grow your business. The sooner you find this, the better. Of course, you need to know and learn how to scale before starting a business.

Thomas John Watson, the CEO who guided IBM to success, once said:

"IBM is today for three unique reasons. The first reason is that, in the beginning, I had a clear vision of what the company would look like when it was done. You could say I had a vision in mind. That was it." model. What would happen if a dream—my vision—came out?

The second reason was that when I received the photo, I wondered how the company would work. Then I made a diagram of how IBM would act once it was done.

The third reason for IBM's success is that when I saw a picture of what IBM was like when it was a dream and how such a company would do it, I realized we didn't have a body from the start. play out, we'll never see. get to the point.

In other words, I realized that in order for IBM to be a great company, it had to act like a great company long before it existed."

You have to start with the end goal. As Tom Watson said, you first need to have a clear and comprehensive vision of what your company will look like in the future, then plan from scratch and execute accordingly.

Many startups today don't have a viral impact and are low-cost for clients because they didn't start with an end goal. They don't see the big picture. Instead, they are opportunistic and jump in without understanding their business.

When you learn how to properly forecast your business, you can make a difference and tailor your product or service to fit your marketing plan, rather than designing a product or service first.

Reaching $100 million is no easy feat. It's hard, it takes a lot of work, and as a business owner, you have to think outside the box to achieve that great look.