by Michael Cannon
The success of an investor-backed firm is measured in three ways. The first is through raising the capital it needs to launch and to sustain itself. The second is in obtaining enough customers to validate a market and to exponentially increase market share. The third success measure is the liquidity event, be that a strategic acquisition or an IPO.
While it may seem self-evident that the messaging — a summary answer to the buyer’s core buying questions — must be different in order for your company to move through these three phases successfully, the reality is that few investor-funded companies make a true distinction between their investor messaging and their customer messaging. Instead, the slide deck and messaging used to secure investors are modified somewhat, and used to try and sell prospective customers (or visa-versa).
Investors Lose Billions Annually on Bad Messaging
The results of bad messaging — the blurring of investor and customer messaging — are well known: Over 80% of investor-funded firms are not successful. Investors lose billions annually. The dreams of many a founder and executive team evaporate as equity is diluted and the firm dissolves.
To reduce the risk of this sad fate, make sure your company uses the principle of gold and silver bullets to differentiate your messaging.
Gold Bullets Are for Winning Investors
Gold bullets answer the potential investor’s primary buying question:
- Why is your company a great investment opportunity?
An example of an excellent answer to this investor’s question is:
The target return on investment is 25x in 3 years. The addressable market is $50 billion annually, and the risk of failure is negligible because the intellectual property is patented and the management team has successfully worked together in two prior start-ups.
Silver Bullets Are for Winning Customers
Silver bullets answer the customer’s primary buying questions, such as:
- “Why should I change from the status quo to a new solution?”
- “Why should I buy this new solution from your company instead of your competitors?”
An excellent answer to the first customer question is:
Adopting the new methodology will improve your closing ratios by 5%, reduce turnover rates by 15%, and simultaneously increase your net income by 8%.
What a Difference
Notice how different the answers are to each of these questions. They are highly aligned with the interests of each audience. To win over investors, you will also need to explain why you’re going to have such incredible market success, which is where the answers to the customer’s primary buying questions are used with investors – i.e., “here is why prospects are going to change and why they are going to do it with us.”
Now consider how different the answer is for an early-stage investor versus a late-stage investor. And, how about the answer given to a late-stage investor who is considering an acquisition as compared to one investing in an IPO? It’s amazing how many companies do not consciously differentiate their messaging against these critical pivot points.
If your company is like most, you are blurring your investor and your customer messaging — and it is costing you and your company millions in lower valuations and lower performance. Review your investor and customer messaging today. Have you created separate and compelling answers for each type of investor and for each customer question?
Successful investor-backed firms use gold bullets to help them get better traction with investors. Their marketing and sales teams use silver bullets to help them get better traction with potential customers. You, too, can use this proven persuasive messaging principle to increase your valuations and accelerate funding cycles, while simultaneously increasing sales and marketing effectiveness.
Resources to Implement the Most Influential Customer Communications
Michael Cannon is an internationally renowned marketing and sales effectiveness expert, best-selling author, speaker and an authority on enabling B2B companies to engage customers with the most influential communications. For more information, visit silverbulletgroup.com.