Growing a loyal and trust-worthy customer base is key to seeing your business taking off. But in the beginning, you’ll quickly realize that there are all types of customers out there, from terrible ones to ones you wish you could work with forever. A key aspect of making sure you’re mostly dealing with the latter is targeting the right customers from the get-go and focusing on making them happy. Here is a guide on how to do just that, in 10 simple steps.
1.Identifying Your Customer Base
Even in the seed stages of a company, they have at least a broad idea of their target audience. You’ve probably already asked yourself: is the product you’re making meant for the everyday man or Fortune 500 companies? Who would you be excited to work with?
You might want to start by analyzing your data to understand whether your active customers are the ones you want to be attracting. If yes, keep doing what you’re doing; if not, try to find ways to focus your product and outreach towards the direction you had in mind initially.
In order to find a good match, you can start by looking at their social media presence, see whether their company website or Linkedin gives the impression of a good fit with what you have to offer. If you don’t have an activity stream in place, you can use services like Clearbit or Rapportive to enrich the profiles of your user/customer list – they can add details such as seniority, industry, location, and salary ranges. This will give you a good idea of who you are attracting right now.
Once you have the data, you can make preliminary conclusions – do you work most with personal users or businesses, are they from industries that can afford and find use in your product, are there any surprises on the list – which you can then build upon to narrow your targeting strategy and identify your perfect match(es).
2.Favor Strong Communicators
There’s usually a strong correlation between disengaged users and lack of communication. When your product isn’t a priority to users, they might not even open your emails, which makes it hard to re-activate a partnership or get feedback after customers have canceled.
But there’s a good way to gauge engagement by seeing who does open your emails, and you can use this to your advantage to analyze how different segments of your customer bases are relating to your product. For example, you could use a subject line you know performs well to test out which customers are the most engaged, who opens your emails, and who responds to them. Analyzing your customers’ communication habits, you’ll be able to adapt your message to those you aren’t currently reaching or seek more users with similar characteristics to the ones who do open your emails.
3.Happy Customers Want to Help You Help Them
Because of the direct correlation between a product’s success and its innovative quality, customers will be happy to help you get them a better product. This will show they trust your company and are projecting themselves using your services in the long-term.
Think about tools such as surveys – who jumps at the opportunity to give feedback, and who needs to be convinced to just have a chat? Or phone calls – do they answer you, bother to send out unsolicited feedback, mention you on Twitter? All of those initiatives from the customer show great engagement and a good fit in the market, and you should definitely listen to what these customers have to say.
4.They’re Using the Product As-Is
Joshua Porter, author/entrepreneur, coined the expression “the next feature fallacy.” It will probably sound familiar: when entrepreneurs base their entire strategy and hope on the thought that one next feature will suddenly turn their product into a great success or make it more likely to be used. But you want to be focusing on customers who use your product already and work to create something that does not need improvements to be(come) valuable.
Customers that won’t build up your business will always focus on what you’re not, and although what they truly want is a different product, they will suggest improvements in the hopes that your product suddenly becomes what they had in mind. But don’t let this sway you from your initial direction; instead, target the right customers – those who will want improvements to the product you already have, that they already find use in.
A good tool for that is a Kano survey to uncover your product’s true perceived value. It will allow you to visualize which customer segments are happy with your product but simply want it to be better and which mostly want new things. By identifying these needs, you can build features that will positively affect the right customers.
5. Prioritize Customers who will Actually Use Your Product
Don’t waste all your resources on retaining customers who don’t really use your product or need to be convinced of its values since you’ll waste precious time and energy simply delaying the inevitable. Instead, identify who gets the ‘aha’ moment after having tried it and remains loyal to it.
6. Find Those Who Would be Disappointed if They Could No Longer Use Your Product
The only product worth making is one that actually solves a need and fills a gap. If that’s done well, it means that people will start relying on it.
The Sean Ellis Test is a known model to identify whether a company has a product-market fit. Designed by marketer Sean Ellis, it indicates that such a product would need to leave more than 40% of its users disappointed if it disappeared or radically changed.
While you shouldn’t take this number as a hard rule, it’s a good way of thinking about your work and identifying whether you are producing something that adds benefits or answers an actual need. Although you should keep in mind that there’s always a disconnect between what people say they’ll do and what they actually do – so while a product could pass the test, it could also fail as soon as the company tries to scale. You can still give it a try at survey.io.
There is a second model, developed by David Cummings, the co-founder of the marketing automation platform Pardot. Looking at your business’ momentum provides you with a useful checklist to use in conjunction with the product-market fit survey.
7. You Shouldn’t Need To Trick Customers Into Buying Your Product
It’s true that in our modern world, we feel surrounded by “growth hacks” at every corner. While you can, at scale, optimize your business through continuous improvements or hack a better conversion funnel, the most important step to success is still finding the right market for you. This will ensure that your customers are there for the right reasons and find actual, long-term, scalable value in your product. Tricking people into converting (or discounting the product, for that matter) may give you instant results, but it will blur that assessment and make long-term growth a lot harder to predict.
A more useful way of thinking about growth is to take a look at where value drops:
- You should focus on improving your product value if visitors stop before reaching your B2B SaaS pricing page.
- If you don’t see a strong click buy ratio, you may need to revisit your price points.
- If they click buy, but don’t go through, there may be something wrong with the payment methods or the language.
Only by identifying where your funnel breaks and being familiar with the customer profiles of those who go through with minimal friction will you be able to focus your efforts effectively.
8. Good Customers Don’t Need to Be Convinced to Stay
It was the entrepreneur Dan Martell who said that ‘retention was the proxy to making revenue.’
While it’s an important aspect of growth, there are a lot of reasons for leaving which can be hard to cover. And more importantly, the customers you want to be targeting are the ones who won’t constantly be considering ending your partnership because they’ll simply be convinced of the value of your product.
If you have an important number of canceled contracts, ask yourself the key questions to remedy them, like if it is a price point problem, because your customers’ tech stack is changing, or are other products competing with yours?
You want customers to stay for the right reasons, and if you find yourself constantly faced with retention issues, maybe the problem is that you don’t fully have a product-market fit.
9. Focus On Those Who Support You For the Right Reasons
‘Negative selling’ is a little trick that will give you a glimpse into your customers’ buying process. You can do that by trying to convince them the product is not for them, and you’ll get a quick answer to the question: why are they buying it, and is it for the right reasons?
Not all of the reasons why customers buy (to look good, to follow a trend, to save money or time) are scalable. You want your product’s value to be the reason for purchase from the very beginning, so you don’t end up with a crash and burn situation as soon as you try to grow your business.
10. The Right Customers Will Become Advocates
While this may be old news, it still holds true – useful and satisfying products create advocacy from users, which can, in turn, sell more products. It improves the feedback loop while providing exposure at lower acquisition costs. Therefore, businesses should prioritize these ‘advocates,’ who can only be made out of the right customers.
Net Promoter Score (NPS) surveys are a great way to identify them by asking a simple question with a scalable answer from 0 to 10: ‘How likely would you be to recommend our product to a friend or colleague?’
By taking a look at your respondents, you’ll identify your advocates (9-10), passive users (7-8), and detractors (0-6). Asking ‘why’ as a follow-up to that question will further help inform your marketing messaging and positioning. By segmenting the results, you can get a clear guide on how to proceed with your customer base and even how to find growth opportunities within it (something that Atlassian successfully did).
How many steps of the list has your business completed?