Great news: Your startup landed its tenth customer today. You haven’t seen a cancellation yet, and all your clients are amped whenever you talk to them. You're ecstatic about your startup's traction. The possibilities feel endless and you’re already thinking about your 50th, 100th, and even 100,000th customer.
Slow down. This is where too many startups jump the gun trying to aggressively expand, when they’ve only just gotten up off the ground.
Just because customers are satisfied, and aren’t filling your inbox with complaints, doesn’t mean you’re ready for lift-off. There’s one fundamental question you need to answer in order to truly grow: How many of your customers are happy, and how many are actually successful?
Why successful > happy
It seems like a counterintuitive question to ask—and most people don’t. Happy customers don’t mind paying you each month. They’re low-touch and don’t bother you. They don’t overwhelm you with support requests.
But the gap between a happy customer and a successful customer is massive, and whether you realize it or not, has huge implications for your startup’s growth. Here’s how you can identify the differences between the two:
While happiness is nebulous and fleeting, success is something tangible you can build a business on. For successful customers, the value your product creates far outweighs what they pay for it. Customers seeing that kind of ROI are much more likely to stick around long-term. As a startup, you need successful customers to grow and scale.
Successful customers are a sign that you’re on the road to product-market fit. Even though your product is new and unpolished, there are already people who can’t live without it—they go to work every day and use it to get shit done. As Marc Andreessen points out, failure to find that kind of market is the “#1 company killer.” Your successful customers suggest it’s a killer you can beat.
Successful customers have a vested interest in your improvement because the better your product is, the stronger a company they are—your product is that vital to them. They give you feedback on how the product needs to evolve, which empowers you to iterate, improve, and serve your market better in the long-run. They’ll help you find more successful customers through referrals.
You form long-standing relationships with your successful customers that empower both of you to grow and thrive.
3 steps to get more successful customers, faster
Once you hit the tenth customer mark, you can’t just keep plowing ahead with the growth strategy that got you early traction. It’s time to get disciplined and come up with a process that ensures you’re only selling to customers that you know will become successful. Here’s how to do it in three simple steps.
1. Ruthlessly qualify leads
When you’re first starting out, lead qualification probably isn’t a priority. You’ll take customers however you can get them.
For example, some of your early customers are probably friends or acquaintances. As Jason Lemkin and Aaron Ross point out, you’re not ready to grow if that’s your primary customer acquisition strategy. Or maybe your salespeople are just out there throwing darts in the dark, signing anyone they can convince to buy (even though they might not be a good fit). Customers who just fall in your lap like that are buying because they like you or your company, and not for solid business reasons. That’s the definition of a happy customer.
You need a scientific, replicable way to save your salespeople from chasing the wrong customers. It starts with an ideal customer profile (ICP)—a description of the perfect hypothetical customer based on your most successful customers. Compare every lead to that ideal. When your salespeople engage those vetted leads, they need to learn how your product can solve each prospect’s unique business needs.
Lead qualification in practice
Here’s what your lead qualification should look like after early traction:
- Identify your most successful customers. You can use a billing analytics software like ProfitWell to look over all your customers, pull the ones who have been the most successful with your product, and build an ICP.
- Find similar-looking leads. Next, use a lead targeting service like Mattermark to hone in on companies resembling that ICP in terms of industry vertical, ARR, team size—whatever your data indicates is important.
- Ask the right questions. When your salespeople engage those leads, they need to ask questions to uncover how your product can make that prospect more successful before they even consider closing. If I was selling content management software, it wouldn’t be enough for a company to say, “Oh, we do content.” I’d have to ask about what kind of content, whether they collaborate, how important SEO is, and make sure their use case matches the product.
That’s how to get your salespeople to only focus on prospects that will become successful customers.
2. Drive customers to your sticky features ASAP
When great prospects signs up, you can’t assume they’ll automatically be successful with your product. You need to facilitate their success and make sure customers are actually using your product—otherwise, they’re just sitting there paying you for no reason.
The key is to identify your software’s stickiest features—the ones that unlock your product’s core value and correlate with long-term success and retention. Steering new users toward those features needs to be the focus of your onboarding process.
For example, at Close, we know that importing contacts is the necessary first step for a customer to be successful. Our product is a CRM—its primary purpose is to manage a salesperson's list of leads. If there's no one to contact in our system, there's literally no way to get value from the product, and no reason to be a customer.
How to facilitate early customer success
Here are the strategies we’ve been successful with in getting free trial users up and running with a new SaaS product:
- Track feature usage. Use an event-tracking platform like Amplitude or Mixpanel to see which new customers are using your most valuable features and which ones need that extra push.
- Create a drip email campaign. Send new customers a scheduled series of 4–6 emails within their first few weeks. Make them sound conversational, but include calls to action prompting users towards those sticky features.
- Make your free trial short. Free trials are a great way to get new customers, but most SaaS companies’ free trials are way too long. Limit yours to 14 days or less, and get customers thinking, “I don’t have much time with this thing, so I’d better be rigorous and test what it can do.”
If you’ve found a customer you know you can make successful, don’t let the opportunity go to waste. Put in the extra work during onboarding to make sure they’re able to crush it with your product.
3. Don’t be scared to talk to your customers
Talking to customers personally is incredibly valuable, but too many founders are scared to do it. They think, “Hey, if they’re gonna keep paying me, why rock the boat?” It comes back to an underlying fear that customers don’t actually need the product. Founders worry that talking to customers will make them realize, “You know, this product doesn’t actually do much for me.”
But that’s exactly why you need to talk to them. After all, what do you call someone you never talk to, who just sits there paying for your product but isn’t actually getting results? That’s right—a happy customer. You should’ve never signed them in the first place. Building sustainable startup traction requires you to do more and go that extra mile.
Talking to customers does more than let you ensure they’re successful. It’s a chance to get feedback on how the product could serve them better, build personal rapport with your clients, and even set the stage to upsell them to a higher plan. When you consider all those benefits, and the fact that the biggest risk is uncovering a happy customer, it’s a no-brainer.
How to reach out
There are several different ways to personally engage with customers. Consider the following options:
- Set weekly calls. As Paul Graham says, in your early days you can do things that don’t scale. A weekly call gives you a set process to check in with successful customers and make sure they stay that way.
- Visit in person. Everyone knows this is a good idea, but very few startups actually do it. Visiting your customers is a huge differentiator, and gives you the chance to enhance a customer’s experience in new ways. For example, I once visited a customer and noticed that they displayed our sales CRM on a TV in the office. It looked like crap since it wasn’t optimized for that device, but once I saw it, I called up our engineers and had a fix deployed within the hour.
- Ask them to do a case study. Case studies of successful customers are crucial for your company’s reputation. They’re also an opportunity for your customers to get their names out there (a win-win) and the exercise itself reminds them of how valuable your product has been.
Each of these tactics is a way to verify that your customers are successful, not just happy.
Successful customers are the ultimate reward
The only way to grow and thrive in SaaS is to consistently make customers more successful. If you’ve got a wide enough base of companies your product can help succeed, you have the makings of a healthy company.
Beyond that, your customers’ success has a huge impact on morale. Your team will be crushed if they put in the work to close new customers day in and day out, only to see them churn and say, “Eh, that was okay but not a must-have.” It creates doubts about the worth of the product and the company’s future.
But on the other hand, successful customers are the most inspiring part of working at a startup. When your team sees people using your product every day, hyping it up on social media, and getting outsized results, it reminds them what they’re in this game for and makes them feel proud to be associated with your product. That's the kind of customer that can really fuel your startup's traction.
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