Lesson 4: First Customers

Your First Customers and Users

For you to get significant funding from investors beyond the initial seed funding you receive for your start-up company, you need to show that your company is gaining traction. The best way to show traction is to show that you are getting customers.

The more users that a digital platform has, for example, the more valuable it is, like social media and online video games; this is called the “network effect.” You need to get an initial batch of customers / users. But how are you going to get your first customers?

The purpose of this article is to introduce you to practical strategies and techniques that can help you acquire those first customers that will make a difference for your business. Because you are a start-up and you need to grow fast, we advise that you use growth hacking techniques, which focus on rapid growth.

You cannot wait around for more traditional modes of marketing to kick into gear. It’s a highly competitive market out there. You need to make things happen. Speed is important. You need a sudden thrust of customer acceptance. This will give you the traction that will propel your business forward, enabling you to continue to raise capital for your company.

Growth hacking helps get customers onto your platform, whereas more traditional means of marketing, such as inbound marketing, help sustain momentum. Both are useful, but the focus here to generate the burst of customer acceptance is on growth hacking.

Strategies for Customer Acquisition

The first stage of what the industry calls a “growth hacking funnel” is the acquisition of customers. It’s using cost-efficient ways to present your product or service to your target customers.

A key part of growth hacking is experimenting. Try something to get new customers for 30 days. If it doesn’t work, then stop doing it and try something else. Measure results in 30 days. Then move on. Even if it was successful, you may have to still evolve it or tweak it over time.

For example, Trello is a company that ran 11 experiments testing 11 different messaging headlines on its homepage. It landed on a message about collaboration based on the test results, and it led to a burst of increased sign-ups. You should be laser-focused on who you are targeting to become your customers.

15 Things You Can Experiment with to Grow Your Customer Base

Here are 15 action-oriented suggestions for you to try out on your own in your business. All of them may not work for you, and there may be other growth hacking tactics that may work for you, too, but these 15 ideas for experimentation will surely get you thinking toward striving for a network effect and capturing the energy you need in the marketplace to be successful.

• Reach out to experts in your industry and ask them for advice and to be involved in your beta testing program. By involving these experts, they can become your advocates in the marketplace. Experts often blog, speak at conferences, or simply talk to other influential people in the industry. One good word from them can suddenly attract more users to your platform.

• Seek out places online where there are discussions happening about the needs and pain points related to the problems you are solving through your business. Inject yourself in the conversations. It could be on Reddit or even an industry trade media outlet with comments by readers.

• Do competitive strikes on the media coverage of competitors. If a competitor makes a public announcement (i.e., a press release), contact a bunch of journalists who are likely to cover the news and inject your company into the story by offering commentary about the market trends, highlighting your company as doing something better or different from the competition.

• Focus on your network and share your knowledge with people you know. Blog on LinkedIn sharing your perspective on things related to your start-up company. Not blabbing about the company necessarily, but talking more about the issues, the customer needs, and then how your company is solving problems in the world. Make the customer the centre of your commentaries, which is why you need to know your target customers well.

• Get people to review your product. Give them free access or free copies or free widgets, depending on your business. Ask them to comment about the product (or service). This will give you free market research, but assuming they like your product, they will tell other people about it.

• Reach out to groups and communities on social media. LinkedIn Groups is a perfect example. Find the groups that are talking about the topics related to your business. If there is a group about web traffic optimization and your company provides web traffic optimization tools, you should be in that group sharing your expertise. Don’t be overly commercial, but provide useful, relevant information to educate target customers.

• Do large numbers of “cold” invites on social media every day. Set a goal for yourself to do, for example, 50 or 100 or 200 “cold” LinkedIn invites every day to people, telling them about what you offer. Get more people following you, so as you share updates, they are seeing you doing some interesting things.

• Make cold calls and send cold emails. It sounds so “old school,” but it can still work for you. Do an experiment for 30 days calling and emailing people. You can check out Lemli’s to help you with cold emails. Other places that may be useful for you include Lusha, Pipl, Fiverr and Phantom Buster.

• Pay for Google keywords to boost your online visibility. You can consider doing Google ads and Facebook ads, for example. Try out different content every 30 days to see what is most effective to attract more customers to you.

• Incorporate a memorable tagline to every message that your users send out from your platform. When Hotmail started out in the 1990s, it added the line “PS I love you. Get your free email at Hotmail.” (Clever, huh?) The result was that Hotmail started to get more than 3,000 new sign-ups every day.  In six months, Hotmail reached a milestone of 1 million users of its email service.

• Use “exit pop-ups” on your website. Just before a visitor is about to leave your site, a message pops up on the screen, inviting your visitor to download a “free eBook.” This helps cultivate the “relationship” with the person and to help convert them into a customer sooner rather than later.

• Give an incentive for people to send referrals your way. When Dropbox did it, it offered “free storage” to you if you referred someone to sign up for Dropbox. Think of something you can offer to people for doing successful referrals to your business. (You don’t want the incentive to cost your business too much, so you may have to weigh the cost, but make the incentive something meaningful to the customers.)

• Make your online service more exclusive. You may not know this, but Gmail did this at the start. It became as if gaining access to Gmail was a “status symbol.” It almost sounds like a paradox, but by making your service more exclusive, you can attract more people because they want to be part of something exclusive. It makes them feel special. They’ll also talk about it on social media or just to friends when their “number” comes up.

• Set limits on your “freemiums.” If you offer a “free service” to get a boatload of users on your platform, establish a limit to the “free” aspect, so if happy users want to use a more advanced feature or get more of something you can offer after getting a taste, then you can charge for it. For example, you can limit the amount of time on your platform or limit access to something of value after so many clicks, etc.

• Integrate your product or services with others. For example, Spotify integrated its service on Facebook, driving early customers. You could create a plug-in for a popular platform when it makes sense. But if product integration makes little sense, you can also try cross-promotional partnerships with other companies to accelerate your initial growth.

Remember to experiment with different growth hacking techniques for 30 days at a time–and then assess, assess, assess. Go for bursts of customer acquisition. You should still create and manage your sales funnel, proactively managing your leads and guiding customers from the awareness stage to the sales stage. In the beginning, you will have opportunities to learn from your experience and adjust to spikes and patterns in your sales funnel. Just don’t be satisfied with a slow approach to getting your first customers. Aim to generate fast momentum right out of the gate.