Growth stagnation: How to get out of a growth slump

Daphne Tideman: Hi. I’m Daphne Tideman. And today I want to talk to you guys about growth stagnation together with Fay Lodder. First a little bit about us, I joined RockBoosts or growth hacking agencies the first employee years ago, and it was within five years, working with about 100 different clients to help them grow and deal with their growth challenges. And from there I moved to the brand side and worked as head of growth of Heights, a BrainCare company. And now I’m coaching various startups in how to grow and deal with their growth challenges. And I’m joined today by Fay, who I’ve worked with at RockBoosts and Heights, because she’s so incredible that after I left RockBoosts , I immediately asked if she would come and help out at Heights as well. And she also has a background in growth consulting, as well as now working as a growth consultant for multiple different brands, as I’m really excited to talk with had today about growth stagnation, because it’s a topic we’ve talked about a lot in the past. And I think it’s something that we’ve all faced, you know, at some time, growth isn’t happening quite how you want it to, you’re missing your target. And at first, you’re like, it’s okay. You know, it’s just off we, I’m sure you can recognize this Fay?

Fay Lodder: Definitely.

Daphne Tideman: Yeah, one week becomes two weeks, and two weeks becomes four weeks. And then, you know, before you know it, you’ve been missing the mark for 6, 7, 8 weeks. And your boss suddenly is like, okay, we need to talk what’s going on? And all you can figure work is like, oh, no, I’m gonna grab some. And I think it’s really important to be open and honest about this. We always talk about all our successes, but what to do when growth isn’t happening. And that’s what we want to cover today really like, what is the causes and how to get out of it? So Fay, maybe you could explain a bit like, why does this actually happen? Why do we go from an incredible growth month to suddenly, you know, a terrible growth month? And that just leaves us wondering what is going on?

Fay Lodder: Yes, so there are multiple reasons why this could be happening. First, I would definitely look at external reasons, which are easier to spot, for instance, competitions or new competition joining or seasonality. From there, I would look at internal reasons, which could be either that you’ve been building on shaky foundations, meaning that you’re doing a lot of manual work on scalable growth. So the resources are limiting you. And seconds, it could be that. So yeah, you don’t have product market fit. And you’re now suddenly hitting the roof. And it’s slowing down your growth. And so at the beginning, when you launch, even if you don’t have product market fit yet, you will always see some growth happenings or getting excited, like the first orders are coming in, and you’re like, oh, this is going in the right direction. But when you don’t actually have product market fit, at some point, what you’ll see happening is that the growth will suddenly stop. And you notice that which the numbers that you’re getting, you’re actually not with the conversion rates that you have, you’re not generating the growth that you need to. So from there, I would definitely say have a critical look at customer input. So reviews and also talking to your customers interview them and understanding why they’ve joined and but also what could be reasons that they wouldn’t become a customer. And from there, figure out what’s happening and yeah, become more aware of the internal struggles that you might have that are hindering growth.

Daphne Tideman: Yeah, so like you mentioned, there’s so many different reasons. And I think, definitely agree that customer research is a key part of it. But I think even before we get to that point, it’s really important to mention like how you approach it is everything. I always say like, you know how you are as founder, how you are as a manager, how you as a growth individual isn’t determined by how you act when things are going well. And it’s when it’s growing, but how you act when things are going well. And so, it’s really important that you don’t just stop panicking and pointing fingers and trying to figure out who’s to blame, but they you really come together as a team. And it sounds really obvious, but I do see it happening a lot that it’s like, okay, but who messed up? Why isn’t working. And I was like to think that, you know, if it’s someone to blame, you either have a bad recruitment system, or you have a bad evaluation system. And when things aren’t going well, that’s not the moment to just, you know, stop pointing fingers and blaming everyone. But that’s the moment to come together and work together and say, Hey, this isn’t going as planned. Let’s try to figure it out. Let’s do analyses and see what’s working, what’s not working. Has anything changed, go for all those different reasons like they mention and try to understand, you know, where the issue actually is. And like you mentioned Fay, it can be a product market fit problem and that’s okay, because it’s not easy to get those fits and what a lot of people don’t realize it’s not just about having a great product like this foundation. So strong growth is about having the right match between your product. Do you market the channels and the mothers so it can, for example be, you know that you don’t have a final product model fit. So you know, the business model you have isn’t working for the product you’re offering, the pricing you have isn’t what people are looking for. And, you know, each of these parts can be fixed, but they just require, you know, really deep diving and understand them we’re working from there.

Fay Lodder: Yeah, exactly. I also have this example for a client that I worked for the we at the beginning, when we started, we kicked off, we generated sales. But at some point, we saw that we were also starting to hit the roof. And we were also panicking, of course, and wondering what, what, what was going on. And one thing that we saw was that we generated a lot of visitors to the website. So we did see a high click through rate from our ads, but we didn’t see any add to carts. So that was the first thing that we were like, maybe, you know, or this is definitely an indication that it’s not a performance marketing issue, it’s definitely a product issue, we have to go back to the foundation. And from there, I helped set up exit intent popups, and tried to get, you know, interviews going through our social media followers that we had, that weren’t customers yet, and spoke to them. And one of the main things we got back was actually that, you know, the pricing was too high, especially with new competitors that had joined the market as well. So from there, we had to go back to the basics pretty much and test different pricing models to find the right fit again, and not for a while we have seen a lot of improvement and growth again. So that is just one example where I think, you know, it’s easy to first think, oh, you know, it’s got to be an iOS issue, or like, our Facebook campaigns are just not working anymore. But definitely take that step back and take a critical look also at the the foundation.

Daphne Tideman: Yeah I love that. Because I think like, you know, it’s often not just like a small thing when it slows down so fundamentally. It’s often like, hey, there’s something foundational that we might need to do differently. Like I also, you can call it a growth, or you can also call it growth seeding that kind of like, what got you to this point, we’ll get you further. So for example, you know, you’ve been growing just from one channel, for example, but that just means you’re completely relying on that channel. And guess maybe there’s been changes on that channels. But fundamentally, you’ve been relying on too much on one channel versus having a diversified portfolio. And I think like, that’s also a really key thing say is like, you know, it’s, you can focus on smaller things, you can focus on optimizations. But Darren are getting a new slate. Yeah, those are great sounds like if things are really falling behind, you want to see like, hey, are there foundational things we can do differently, or maybe there are small things that we start testing first, but that if they work, we can do things fundamentally different. And that really has that big impact. Because like, with the example you gave, like, really working out the right pricing that has had a huge impact on it, versus just you know, doing a one off little SEO and hoping that it then goes better. And then you’re just like putting a plaster on the women already solving, solving the underlying issue.

Fay Lodder: Yeah, exactly. And I think you mentioned to me a while ago, as well, and an example that you have, where how management responded to this issue and how you as a team came together and did actually, I think, a weekend or something right? Where you’ve got come together and you did a big brainstorm, maybe you can tell us a bit about that.

Daphne Tideman: Yeah, that’s, that’s a really good example. Thanks for mentioning that it was actually at Heights and I really loved it. Because we’d we’d been having a bit of snow a month or two and what we actually did, because we will remote, we all met up, or not all of us, but a group of us met up in Portugal. And we basically rented out an office there. And we just covered the office and posted of all different ideas started from scratch, rethinking how we are doing things, looking at our growth model on the wall, and analyzing what was working, what wasn’t working. And it was such a nice way to come together in a difficult time. And also because we were in a different setting. And obviously I’m not just saying like oh, fly to Portugal, that will solve it. But just getting out of your usual office getting out of your usual setting and taking that time to brainstorm without the day to day, it was just such an incredible way to get out of the same way of thinking because we did get like caught up and like just like, oh, maybe it says maybe it says instead of like really taking that step back. So that was definitely like a really great way to get out of it. And I think it’s also about like, once you then start to experiment around it, like not everything will work. Not everything is going to immediately work like, you know, you’ve gotten into a slump that’s killed your momentum and to gain that momentum again, takes time. So I think it’s really key to like, really think about those learnings. But I think the challenge is like, you know, how long have you focus on just learning specimen revenue? Like how do you balance those two? I don’t know if you have any thoughts about that Fay?

Fay Lodder: Yeah, definitely. Yeah. especially working with so many startups or even startups that haven’t even launched their first big campaign yet, it’s definitely something that I’m always a bit, you know, scared off, like I make a big part of what I do is also making, you know, clients aware of that, you know, extra orientation means learning and growth, but also means failing at times, which, of course, is also a big learning and something that is needed actually to, you know, to grow. And I think that is also something that I’m trying to balance everyday while working with clients. On the one hand, you want you want, everyone wants to show, you know, green numbers and, and amazing learnings that we can apply. But at the same time, it’s also the part is also showing not so great news. And, and yeah, explaining that this is also you know, a part of the job and needed actually to grow. It’s not only, you know, having positive results that you can apply. So yeah, definitely difficult balancing those, and then also sometimes explaining it to founders, why this is also, you know, not only a disappointment when you get not so great experiments, results, but actually also can help really figure out where else your focus should go. So for example, with new clients, at the beginning, you do test a lot of different channels, some of them, you know, require budget, which will not eventually end up giving the results that we hope we were hoping for, but then at the end, I can tell them like, okay, well, at least now, we know, this is not the channel for us. So we spend the wretched for the remaining time on, you know, the channel that did actually work for us. So yeah, I think that’s, that’s one example where it’s, it’s not, you know, it’s never a great feeling that you have to say, you know, we spent this much amount of budget, but it didn’t lead to the results we were hoping for, but at the same time, I’m conscious, of course, conscious of days. So I also always work with, for instance, smaller budgets, to determine the success and then you know, scale up, for instance, when it’s working, or is or kill when it’s not working. So in that sense, I also try at least to not, or to like to start small and then go bigger, also, with experiments printed on the website, like, first of all, as an experiment through a Facebook ad, see how it works, and then decide to set up a huge experiment that takes 10 hours to set up on the website, for instance. So this is also a way for me to at least, you know, try to balance it more and be cautious of, you know, the experiments that I do run. I don’t know how in your experience, how you work with that.

Daphne Tideman: Similar approach for that. And I think you also mentioned something really important about like scaling or killing, I’ve had this discussion often with like founders, and then again, okay, but maybe the cost of acquisition was just a bit too high. But, you know, if we get it, it’s gonna get worse. And I think that’s one of those things that get in your way. Like, when you integrate some, you get this fear. And I think, as you know, when you’re consulting, it’s a bit easier to just be like, hey, notice isn’t working, we’re gonna stop doing this, we’re gonna move on, like you said, you’ve tested it with a small budget, you’ve seen what is and isn’t working, you’ve moved on. But when it’s your own company, and when growth is behind, you’re like, do I kill this that is not, you know, is delivering a bit, I’ll be out, like, you know, for for extra costs of conversion, or one. So I think it’s also really handy to mention that, you know, you can basically look at it like this, like, if your channel is, you know, four or 5x or more the cost of acquisition. And after, like, you know, running multiple tests, it’s not getting anywhere closer. Either, you need to do something drastically different on that channel. So let’s say you know, your, your Facebook, and you’ve been mainly testing like, image ads and carousels, okay, now you didn’t a test video, or you have been doing video, but you’ve just been doing like product videos, and now you’re going to just like user generated content, then it’s okay to continue with it because you’re doing something very different. But if you’re just going to keep, you know, doing a little bit of ups and optimizations, oh, let’s tweak the copy a little bit, oh, let’s structure the campaign slightly differently. You’re not going to get that and you’re just going to be wasting time and effort. And if after, like, even these drastic changes that isn’t changing, you know, you need to say like, Hey, it’s time to kill. And an exercise I also get cars, companies, when they integrate them to do to try and work this out, is I ask them to work out their cost of acquisition in trading time spent, and suddenly they realize that, yes, the cost of acquisition is 5x. And yes, they want to keep it up. But actually, the cost of acquisition is like 50 next, or something like that, because they’re spending all their time on this. And channels that have been working for them. And quietly in the background, just keep working without demanding attention. I get a you know, actually a way better ROI or way better customer acquisition than the other one, but they’re just not focusing on that because of the fact that they’re focusing on what’s not working and that they actually need to you know, invest more in those channels and really take the time to work and then.

Fay Lodder: Yeah, makes sense. I think this was also a good accent. ample that you just shared, I also was wondering, I mean, we discussed this a while ago as well. And I’m, I’m just asking you this question again, because it’s just the best question ever. But when do you think a founder should just decide to stop? When When do you think that, you know, how long should you wait until you say, you know what I give up. I just don’t think this is gonna go into work.

Daphne Tideman: I think it’s the toughest question of all. And I could give like, a really cliche ounce of it, it depends. But I don’t think that’s very helpful, I think, when it comes to knowing whether to continue or not, I think it’s, again, the question of how far are you from it? Like, if you don’t have a product work, and you’re just starting out, and you have the runway, because obviously runway in the end decides all of this, but you can see a future where you could find product market fit, then I would say definitely continue, definitely, you know, keep trying and doing things drastically different and not being scared to change things. And, you know, admit that some of your first assumptions were wrong and really look at what the research isn’t, isn’t saying. But in other cases, like I know, someone who’s now a growth consultant, who started his own company before that. And he just realized that it didn’t have product market fit that they were offered, that there was no market, I really wanted what they were offering. Like, it was a nice idea. But it was just too niche. And he just said, like, Okay, I’m gonna start with this, because, you know, it’s not even a matter of getting channels working. It’s not even a matter of getting the models, I’m fundamentally not selling people something that people willing to pay a price for. That works. And I think when you have such a fundamental issue, then yeah, you do have to be honest and say like, okay, am I gonna stop or not? And, and Amidah? And it’s evil question, I think of that, or a question of runway. And, you know, it can also be that you just do a huge pivot, like, I had this great story the other day, where I think the founders of slack, were actually working on a completely different type of business. And slack was just an internal tool they’d created, but their business completely flopped. But then they just looked really critically and what I hate this tool that we’ve created, and we’ve been using ourselves to communicate, it has potential for, you know, tweak and work on it. And then they just, you know, the obviously huge business out of that most people knows that. But it was because they’ve admitted that what they were working on wasn’t working. And I think that’s a really tricky thing is like, as a founder, as I had a growth, like, you need to have that kind of confidence, and trust, but like, you also need to be able to admit, when it’s wrong, and those two things are quite hard to have together, but are absolutely fundamental to, to being able to make those decisions.

Fay Lodder: Yeah, I, I honestly, just coming back also to the client that I mentioned before, where we had the pricing issue. Yeah, the client was also starting to ask like, you know, should I just give up? Like, I’m so exhausted, I just don’t know what’s happening. And, yeah, I really had to say like, no, like, at least I believed in, I definitely believed in the product. So I was like, no, let’s just, we have to zoom out, we have to take the time to really. And the good thing was that the client really was open to actually me also ask these very critical questions about the product and pricing. And we actually decided to go back revisit our competitor research, for instance, which gave us the insight that hey, I mean, of course, we noticed this, but there were new competitors joining almost every month with different pricing. So So yeah, I thought that also showed like the openness be critical to in this case, the pricing that she applied, and say like, oh, yeah, this is definitely not the way to go. We have to flip it around. But you also mentioned like being open to pivoting your you know, whole product, or your whole pricing that you set your mind on, when you started the company, I think is really impressive. And yeah, in the end, it’s show it actually it shows in the results that it really now everything is going great again, and very positive. And it just shows for instance, if she wouldn’t have been as open as she was then revisiting the foundation, then we weren’t where we are now. And maybe we had we had needed to stop because financially was just not a possibility anymore. So yeah, I think that definitely is an example of how being open as a founder and being open to switching everything upside down is working out best in, in your end.

Daphne Tideman: Yeah, I think that’s a great example. And like I think that founders openness is what’s what saved their business and I definitely think that that’s a key part and if we just to summarize, like, you know, what do you do growth is running behind. I think the first part is is to look at all those different factors that Fay mentioned at the beginning like what is causing it looking also, product market fit from the angle of like, you know, is the product matching the market and the channels and the model is the channels matching the market product model. You know, and also looking at the model and seeing how that’s matching everything, and really looking at it from all those different matches and seeing that syncing, like other issues that and then really coming together as a team as one team to not point fingers, but trying to work out, like, Hey, where are the issues? What’s going wrong, and, you know, just being honest, and being open to changing things, fundamentally running tests, like, end of the day, it’s always an experiment. You know, if it doesn’t work, it doesn’t work. And even things that seem really tough to test like pricing phase shared, like, you know, there are ways to do that. And then and then from that, you can really, you know, try to work out what is and isn’t working and tenant around that. I just to share one last example, this company that I know, that had this growth, slump for 18 months, 18 months, and now they’re raising their Series A, and they got out of it too. And they didn’t give up because they did have product market fit. But they were still, they weren’t focusing enough on the market where they had that product where they would try to go after too many from markets. And by really investing in that market that was working by also hiring someone on the brand side, really working on the brand awareness and building a brand around there, and making a few fundamental changes as to how they worked, and how they even also in terms of their business model, they got out of that group something are now growing hugely. And it was because they you know, what were they also mentioned they they focused on those learnings. They saw that every time they were getting a step by step closer to making work, they were seeing those positive signals, and they managed to get out of it. So don’t think the world has ended because the growth hasn’t happened like for a month or two. It’s easy to doubt yourself we all do it. But you can definitely get out there if you if you come together as a team and take the right attitude towards it. Thanks you guys for listening in and reach out to us on LinkedIn. If you have any questions or want to talk to us about this topic or any other growth topic.

Fay Lodder: Daphne, and we’ve also shared an article on Medium which walks through this step by step we’ve also a few examples to help you see like how you can approach this yourself and keep working on getting out of those growth slumps.