Sustainable market leaders know their customers. This knowledge is deeply rooted in their DNA and influences every aspect of their go-to-market strategy and drives cross-team alignment. Align is founded on the principle—that successful start-ups and scale-ups—maintain their alignment with their customer. Less successful software companies encounter "Drift" somewhere after they find a product fit and go through their first round of rapid growth. While successful companies might experience Drift, companies like Salesforce, Zoom, Twilio, and others are unique because they have quickly self-corrected where others get lost in the Drift.
Product Market Fit & Growth
When a company finds product-market fit and growth starts to accelerate, there is a transition in the company. The idea is validated, and now the go-to-market team shifts to a new focus: scaling the business to accommodate growth. It's an exciting time. But, if the executive and the go-to-market team are not paying close attention, they can encounter Drift. The signs of Drift begin to emerge —sales cycles lengthen, churn increases, NPS scores suffer, and the company grows slower than the market.
The market and customers are evolving.
The team at Align believes one of the core reasons Drift occurs is because the company loses touch with the customer. By keeping the go-to-market teams aligned with the customer—the organization can keep pace or even stay ahead of the market changes and avoid Drift. As the market matures, signs will emerge—new buyers, new features, and the entire go-to-market team can align on a data-driven approach to determine the strategy to fuel their next round of growth.
All markets evolve, and the ideal customer profiles (ICP) changes. Whether they change or their behaviors change. If you think of ICP as a historical view and pay close attention to the micro-shifts in the market—the buyer, you'll have the insights to avoid Drift.
An example is Webtrends, the founder of the web analytics market. When the company was founded in 1995, the original buyer was web developers. They needed tools to create better web experiences. Over time a new buyer emerged, the CMO and VP of Marketing. They required web analytics to demonstrate ROI in their digital marketing campaigns.
We believe two types of product Drift result from not knowing and operationalizing the ICP.
Selling to non-ICP: Sequential revenue growth is the key metric to measure the management's team effectiveness. As a result, when large deals are closed with non-ICP customers, the management team finds themselves in a revenue trap. They are forced to prioritize non-ICP client feature enhancements knowing that doing so won't help them win their respective market. The risk of selling to non-ICP customers is only growing due to ABM AI/ML platforms that assist in sourcing leads. If non-ICP customers get included in the data sets shared with these vendors, their algorithms will be trained to find more non-ICP accounts to target, which only exacerbates the Drift problem.
Building for Wrong Users: Without an operationalized ICP, the product team will interview a handful of customers, not knowing if they represent the target market. As a result, they unknowingly build for the wrong users.
Avoiding Drift: Maintaining Leadership
(or taking over the leadership position)
The most successful start-ups and scale-ups align their teams, keep up with the market shifts, and know their customer. They continuously benchmark it against their existing customer profile. They see Drift before it happens.
Read our blog Signs of Drift.
Formulaic Evolution of SaaS Companies
SaaS companies follow a very formulaic growth process. They typically start as relatively simple point solutions. Assuming they find product-market fit, they eventually grow to become a multi-product company. With continued success, they ultimately earn the right to become a platform. When the company is a point solution, the market they serve typically has a small total addressable market (TAM). As these companies grow, they usually do so by recognizing what other jobs to be done their buyer personas have and find ways to introduce new products and services to these existing customers. The most efficient path to growth once you have a material customer base is by expanding your share of wallet.
As go-to-market teams look for their next round of growth, this is where many of them fail. They don't clearly understand their buyers and how to attack these adjacent markets. Their future growth is predicated on taking revenue from new and different competitors. Not the same ones they competed against as a simple point solution. Braze is a great example of a company who executed this strategy. They started as a mobile messaging point solution and are now taking market share from large email services providers like Salesforce/ExactTarget.
What if you could unlock data across your organization that identified your ideal customer profiles and surfaced insights to the respective go-to-market teams as they changed? What if you could understand how non ICP customers impacted the business? What if you could share this data across all your teams and gain visibility and alignment?
Align helps fast-growing start-ups and scale-ups align their go-to-market strategy around the ideal customer.
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