The Traction Stage: Gaining Users and Revenue for Startup Success

Master the best practices for refining your PMF, scaling user acquisition, and growth loops to propel your startup forward!



The Traction Stage is one of the most critical phases in a startup's lifecycle. This is when a company starts to achieve significant market adoption and prove that its business model actually works. 

With solid traction, a startup can raise funding, hire talent, attract customers, and generate the target revenue. This blog post will explore traction, why it matters, and how startups can attain it. Read on to learn the key strategies and best practices to take your startup from MVP and discovery to Traction.

What Traction Means

What Traction Means, The Traction Stage: Gaining Users and Revenue for Startup Success

Traction refers to the rate at which a product, feature or service gains new users and revenue. The primary metrics startups aim to improve in the Traction Stage include number of users, revenue growth rate, conversion rates, engagement levels, and other relevant KPIs. 

Traction validates that a startup's offering fulfills a real market need. It is a clear signal that the business has long-term viability.

Some examples of solid traction include:

  • Monthly active users growing 10% per week
  • Sales bookings doubling each quarter
  • High customer referral rates
  • Improving engagement metrics like session length

Without traction, a startup is essentially just an idea or prototype. Traction proves there is market demand and product-market fit. 

This blog post might pique your interest: 5 Stages Of The Startup Journey

How to Achieve Traction For Your Business

Refining Product-Market Fit

The first step to traction is ensuring an excellent product-market fit. This means continually improving the product to meet target customers' needs through experimentation and feedback loops. 

Here are the steps to enhance your feedback loops:

  1. Employ a customer success team dedicated to proactively seeking feedback through surveys and interviews. 
  2. Send out brief polls or questionnaires via email periodically. These help quantify satisfaction at essential touchpoints.
  3. Monitor social platforms where customers mention the company. This provides a pulse on sentiment and emerging issues.
  4. Use CRMs and analytics to glean behavioral data on how customers utilize products. This reveals opportunities to optimize journeys.
  5. Host focus groups for candid qualitative feedback. Compensate participants for their time and insights.
  6. Incentivize customers to leave reviews on industry sites. This builds social proof and credibility.
  7. Feed insights directly to product teams to inform developments and new features.
  8. Have a workflow for rapidly incorporating feedback into iterations. 
  9. Train customer-facing staff like support and account managers to gather feedback in every interaction.
  10. Communicate how feedback is actively used to enhance the customer experience. 

Listening to users and continuously optimizing based on actual data is the best way to provide maximum value to your PMF and earn customer loyalty. 

Implementing Growth Strategies

 Implementing Growth Strategies, The Traction Stage: Gaining Users and Revenue for Startup Success

Once a startup has achieved a precise product-market fit, the focus shifts to aggressively implementing strategies explicitly focused on growth. The goal is to acquire users and scale revenue rapidly.

Some key growth tactics include:

  • Improving website conversion rates - This involves optimizing landing pages, checkouts and flows using A/B testing and heat mapping. The aim is to maximize conversion at each step.
  • Building referral programs - Offer incentives for sharing and referrals. Integrate referral links and amplify through messaging. Make referral viral loops a core growth driver.
  • Search engine optimization (SEO) - Improve keyword targeting, site speed, mobile optimization and content marketing. Ranking higher in organic search can be a major source of users.
  • Paid advertising - Launch Google, Facebook, LinkedIn and Instagram campaigns tailored to the ideal customer. Double down on the highest converting formats and placements.
  • Retargeting campaigns - Remarket to site visitors through ads across the web. Bring back "lost" prospects with special offers.
  • Content marketing - Create blogs, guides, videos, etc., that attract and engage potential users. Use content to demonstrate expertise.
  • Funnel optimization - Identify and eliminate friction points or leaks across the user journey from awareness to purchase and onboarding.

Executing a diverse mix of growth initiatives creates synergies and compounds results. Testing and continually optimizing each strategy removes friction and systematically unlocks growth.

For further information, read this blog: Effective Lead Generation Strategies For Sales Success

Developing Monetization

At some point, traction will need to translate into revenue. This requires devising effective monetization models tailored to the product and market. 

Common models include subscriptions, usage fees, affiliates and other creative options. Startups should pick models that balance revenue with providing ongoing value to users.

Traction Goals and Milestones

Traction Goals and Milestones, The Traction Stage: Gaining Users and Revenue for Startup Success

Startups should establish concrete quantitative goals for key traction metrics. These targets will vary based on factors like industry, business model, and stage of the company. Some examples of traction goals include:

  • 100,000 monthly active users - This provides a sizable audience to retain and monetize.
  • 20% month-over-month revenue growth - This rapid growth rate helps a startup quickly scale revenue.
  • 7% conversion rate from free to paid plans - This conversion benchmark reflects strong product-market fit.
  • $1 million in annual recurring revenue - Hitting seven figures is a major milestone.
  • 40% month-over-month growth in engaged email subscribers - This shows how strong your sales and marketing techniques are. 

Startups should track progress against traction goals each week or month. Hitting targets consistently demonstrates "hockey stick" growth potential to investors. Reaching traction milestones unlocks raising larger funding rounds at higher valuations.

Traction Allows Scaling

Traction Allows Scaling, The Traction Stage: Gaining Users and Revenue for Startup Success

Once a startup has achieved strong product-market fit and initial traction, this validated foundation enables aggressive scaling. Growth is no longer theoretical—the product or service tangibly resonates with customers.

With this confirmation, startups can expand into new geographies, demographics, and vertical markets. The additional capital raised on the back of traction can be invested into initiatives to accelerate growth rapidly:

  • Sales team expansion
  • Increased marketing budgets
  • New product development
  • Supply chain improvements
  • Customer support scaling

You must now attain dominant market leadership along with continual development of your product market fit. This requires a deep understanding of your customers, competitors, and industry trends, as well as a willingness to adapt and innovate in response to changing market conditions. 

Expand your knowledge with this write-up: How Sales Lead Propel Business Growth

To Wrap Things Up

For any emerging company, establishing product-market fit and initial traction should be the top priority. Traction validates assumptions, attracts talent and funding, and enables long-term scalability. By mastering the traction stage, startups set themselves up for exponential user growth, revenue, and valuation. 

A Pro Tip From Lunas Consulting: A product-market fit mentality should always continue. 

It's important to understand that success in one market does not guarantee success in another. Simply transplanting your sales or marketing team into a new market with the same targets and quotas is not a wise decision. Before entering a new market, it is critical to establish a new PMF to ensure that your product or service is a good match for the market. Otherwise, you risk wasting resources and not achieving the desired results.

Lunas Consultingg, Your Partner in Sales and Marketing

We incorporate time-tested full-funnel strategies across both B2B and B2C sectors to build a solid foundation for long-term revenue growth and training initiatives that scale with your company. 

Our methods are tailored to your needs as we work side-by-side to generate leads, boost marketing, and achieve consistent growth.

Reach new heights with Lunas! Book a call today to ignite sustainable growth for your business. Let’s start the journey and transform your vision into reality!