Does It Grow Sales? Investors Want To Know

Why is your Product or Service’s Ability to Grow Sales Is Important To Startup Investors?

Our #3 question in Greenlit Ideas is the ability to grow sales.

Having a great product idea can be a key way to boost your sales. The importance, relevance or usability of the product you plan to sell is one of the first things that will help to drive sales. This is what is known as product led growth, or PLG for short. 
(see an example of the Greenlit Ideas 7 Questions here)

What Is Product Led Growth?

Product led growth is a form of marketing in which the end user becomes the focus for growth. This type of product growth heavily relies on the product being sold as it becomes the key driver in boosting user retention, conversion, acquisition and expansion. 

Product led growth can help create an alignment across multiple different departments within a business or organisation around a particular product or set of products which ultimately become the largest source of scalable and highly sustainable growth for a business or organisation.

Ultimately, product led growth is about all departments within a business or organisation harnessing their combined efforts to create a better product in which the end user experience is the forefront of their efforts, helping to create a product which sticks and promotes growth for the company. 

How Can It Help?

Product led growth requires a lot of effort and alignment within a business, however is very rewarding. Product led growth offers many benefits but at its heart, is a very capital efficient way to quickly scale a business.

Lower Acquisition Costs – By implementing a product led growth strategy, this allows a business to reduce the amount of internal revenue spent on things such as marketing as the customer acquisition mediums are already incorporated into the product, which ultimately will cause a reduction in acquisitions costs overall within the business.

Faster Growth – One of the main reasons businesses implement a product led growth strategy is that it can greatly increase the rate at which a business is able to expand. 

Increased Scalability – Naturally, scaling a business can be long and difficult. Product led growth can allow businesses to grow at a much more rapid pace by diverting their resources to serving their customers effectively.

Why Is Growing Sales Important for Investors?

The growth of a sales focused business depends on its ability to keep sales flowing. Growth is crucial for the survival of an organisation in the long term. By having a proven ability to rapidly grow a business, or sales which positively impact the growth of a business looks very attractive for both potential investors and existing investors.

Investors want to see their money being put to work and will expect to quickly see some type of return on their initial investment. By growing sales, this allows investors to see that the particular business is worth investing more into. 

By having more investment, a business can quickly obtain more assets, drive further profit and help with boosting the overall performance of the business. 

By demonstrating a solid track record for sales growth, a business can demonstrate the market demand for a particular product to its investors in the hopes of receiving more capital investments.

Source 1: https://openviewpartners.com/product-led-growth/#.YbEtaS2l1R4Source 2: https://productled.com/blog/product-led-growth-definition/

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