Customer check-in

One thing I find very fascinating is that for a lot of startups there seems to be an almost inverse relationship between the energy put into acquiring and onboarding customers versus the energy put into keeping them as happy customers for the long term.

Of course most startups do customer satisfaction surveys, NPS scores etc, but how often do you actually reach out to some of your customers to engage in a real conversation about how it’s going, how they use your product and what challenges they are experiencing?

Thought so.

The challenge tends to become more complex the more you’re driven by SaaS-metrics like MRR and ARR. Yes, it is vital that you understand these, but what difference will it make, if in essence you have very little understanding of what is going on behind the scenes, in the heads and minds of your customers?

One of many reasons that Amazon has become so extremely successful over the years is that they have always been extremely customer obsessed. They have always been looking towards understanding the customer, the journey and experience better and better in order to develop their many offerings.

And they have been remarkably successful to say the least.

You will most probably not be the next Amazon, but that doesn’t mean you shouldn’t steal a page our of their playbook and become totally customer obsessed.

Lesson one in that course is to start treating an existing customer and the relationship you have and want to expand with that one over time with the same amount of energy, you put into acquiring new customers.

(Photo by Sebastian Herrmann on Unsplash)

Who are you selling to?

Let me admit it straight from the bat: I have an overwhelming fondness for business models that addresses the users wallet directly.

Not in terms of forcing them to splash the cash but in terms of delivering products, services and experiences that solve meaningful problems and challenges to people, which they are both willing an able to pay for.

Having said that I of course also realize that there are product and services, it makes little or no sense to sell to others than enterprises or even public customers.

But there is another consideration I think is important to make, when you’re thinking about how to get your product or service to market:

Is your product or service one that grows bottom-up or one that will only get a decent chance, if it’s implemented top down?

Normally, we would probably think that products coming from below would have the greatest chance of being successful. I think this is true to the extend that the user experience is superior, and the product is solving a problem that is well recognized by all by at the very least being more efficient at it.

But what if the product or service requires a ‘leap of faith’ in order to be given a chance and get an opportunity to prove its real worth in delivering value to users?

Here, perhaps, it would often be better to go the entreprise route; find the internal champion of whatever problem or challenge your innovation is looking to address, making him/her see the light and how they could benefit from your product or service, and then let them buy it and roll out across the org.

The more new – and not in a consumer-friendly ‘shiny thing’ – kind of way a product is, the more I think you should bet on this enterprise approach. People can be unforgiving after one or two tries, and the corporate culture of moving slow but getting there in time might end up serving you well.

I guess, my overall point is this:

Look at your product or service and get crystal clear on the level of buy-in, it needs in order to be successful in a B2B context. The more buy-in it needs, the more patience you will need, and the more you should probably go the classic enterprise sales route.

(Photo by Hunters Race on Unsplash)

Map your GTM options

When I meet with young startups there is one thing that often springs to mind on the commercial side:

The tendency towards picking a business model on the shelf, often inspired by what others are doing, and settle on that as the model going forward without much further thought than that.

The reasoning seems to be that since others have chosen it (and some perhaps even succeeded with it) it will probably also be good enough for this startup. Plus you get the feeling that you have achieved something and can cross off a to do-item from your long list.

I think this approach is premature and may actually be damaging for the prospects of the startup in the long run.

Because what if the model doesn’t work? Do you just pick another then and repeat the same process? And what if the model, you have chosen, puts investors off because it’s too complex, hard and time consuming to succeed?

Forget about just picking a more or less random business model (I know, it’s not entirely random, but I am sure you get my point, ed.).

Map your go-to-market options out instead, as they relate very closely to a viable business model going forward.

Do a mind map. Put your end user/customer in the center. And then start mapping the various ways you can close a sale with that customer using different models, approaches and value propositions.

Figure out what needs to be true – the key assumptions – for each of the avenues and test the assumptions with customers, experts etc.

With a bit of luck and quite a lot of work you will be able to define the path of least resistance to the customer and notably to the customers wallet.

And that’s exactly what you need. That’s your future business model. Developed and understood by you, so you can effectively go and execute on it. Not something just taken from a shelf that you actually may have very little idea about how to make work for you and your startup.

(Photo by Tom Ramalho on Unsplash)

Keep winning

When looking at B2B startups, it’s super easy to get impressed by a well-executed growth model that brings new customers in in droves. Of course it is; sales is an art and can be a super tricky one at that, so every time a startup succeeds in closing a deal, it’s reason to celebrate.

But what I personally like to celebrate more is their ability to keep their customers happy by ensuring a high retention and thus a super low churn.

That – to me – is the most powerful indicator of a startup delivering real value to customers by successfully solving a problem, the customer has.

When I meet with startups there are always convincing narratives about how to find and attract new customers and close the deal. But with startups who already have their first product in market, I often find that the story becomes slightly less convincing, when we talk about retention and churn.

Sometimes the story about retention becomes so weird or non-logical that I just assume that the startup in question has a real problem in that department, and they are more than reluctant to share that with me. That – in all honesty – is a huge flag.

Having to work hard on retaining your customers is hard work and honest work. Because even though you may have a great product, lots of other startups or big corporations are out to get your customers with everything from a slightly better product to one that is just a lot cheaper (and perhaps even loss making) than what you have to offer.

You need to have a plan for keeping retention high, and you need to execute on it like your life depended on it. To some extent it does; at least the prospects of your startup ever becoming a viable business.

You need to show that you understand what’s going on, and that you understand what you need to do to keep your customers engaged, happy and finding the best value in your product. And you need to always optimize that approach to ensure that your win didn’t only happen once, when you closed the deal, but that by keeping the customer, you essentially have what it takes to keep on winning.

When you have that, it’s truly worth celebrating.

(Photo by Arisa Chattasa on Unsplash)

Easy to buy

When you’re building something to solve peoples problems, it can be tempting to build feature after feature and try to sell them all to the customers at the same time.

What often happens is that it can be hard to get the customer engaged in a dialogue or a trial – simply because you’re overwhelming them with information about features, solutions etc that they have a hard time figuring out whether your product is actually a potential solution to the key problem you have.

As an alternative, you could start smaller. Start by telling about one thing that matters to a customer segment, who you know is experiencing the problem. Use that as a way of engaging in a dialogue or a trial, from which you can build from, upsell and secure an ongoing relationship to a future happy customers.

Start small. Be easy to buy. And then take it from there.

(Photo by Andrew Ling on Unsplash)

Beware changing models

Can you start out with one type of business model and then transition to a new one without facing huge challenges?

The question is a valid one. And the answer is probably “No” in most cases. And it is worth exploring a bit further, as it’s often a topic that comes up when I meet with founders.

The issue with wanting to change the business model is that what I need and want as a founder and business owner is not necessarily the same as my customer needs and wants.

Let me a simple example from my own life as a customer:

When I order a case of wine from my preferred ‘wine pusher’, I expect it to be an interesting wine from a wine maker, I would otherwise never have heard of and at a reasonable price. Like I am used to.

I do not expect to get an offer for a wine they have produced themselves together with a chef, I have never heard of (even though it probably says something bad about me that I don’t). As I got the other day. And immediately decided to decline.

Why?

Because it broke the fundamental ‘contract’ I have with my regular supplier: You find regular wines from little known places that I can then get a good offer on. That’s the model, I have signed up for. You DON’T try to introduce your own brands into the mix, because that deviates from our ‘contract’.

Could I be more forgiving here and just try it out? Absolutely. And I fully expect that many of their customers do so. Otherwise they probably wouldn’t do it. But I think it goes to show how challenging it can be to make changes to your fundamental value proposition and business model.

I think you need to be very aware of this. Because while it may be tempting to try to change your business model to introduce new revenue streams, cut costs, increase sales, boost your bottom line or whatever, you won’t succeed in it if you’re out of sync with what your customers are expecting.

Don’t ever take even your loyal customers for granted.

(Photo: Pixabay.com)

Bye bye, Endomondo

A couple of days ago an old love affair ended, when I deleted the Endomondo fitness app from my phone.

For what seems like many years I have been a loyal Endomondo user, and for a period of a couple of years I also subscribed to the product to be able to get customized workout plans for my running.

It was a really nice and cool product that carried me through a lot of training sessions and a couple of half-marathons – something which I would never have thought, I would ever be able to achieve (yes, I am that bad a runner).

Now it’s being decommissioned by fitness apparel manufacturer Under Armour (UA), who acquired Endomondo a little more than five years ago for close to 100M USD.

Of course I don’t know the inner workings, and why UA has decided to sunset the service, although they apparently want to focus more on more seasoned athletes.

To me it just seems like yet another acquisition gone wrong after the “Look, shiny new thing, gotta have this”-honeymoon ended.

But alas, it doesn’t matter at all; Endomondo is dead.

UA wants me to export my data to their other service MapMyRun. Now, why would I do that after they have just left me out in the cold?

It always baffles me when a company that have just let you down thinks that you want to dive straight back into another adventure with them. I think it’s quite an arrogant assumption.

Instead I have decided to give Strava a go.

I have already clocked my first couple of runs, and I must admit I can see, why Endomondo is being shot down; it just hasn’t got the attention from UA for a long time that I can see Strava is giving their product. It is vastly superior.

Endomondo was great once. Thanks for the memories and the help.

RIP.

(Photo: Pixabay.com)

Customer loyalty during a crisis

A lot of people say that there is never a time as good to start a new venture as in a time of crisis.

Maybe it’s true. I don’t know. But lets assume it is. What are the things that makes it different and perhaps even better?

Normally, most would suggest that the reason it is a good time to start is that you can put pressure on the ressources you need to get going; vendors are hungry for cast and talent may not have the opportunities and bargaining power they had before.

I am not sure that goes for the tech sector, though.

But what I do find interesting is when it comes to customers and customer relationships. Maybe that’s where the real differentiator is?

When I look at my own personal spending patterns during the Covid-19 pandemic, they have largely gone one way: Down. I have cut out a lot of the day-to-day personal operating expenses – the little guilty pleasures – that I have been used to. Simply because I haven’t been able to venture out in the same way.

Now that my spending has been cut back, I am using the opportunity to assess my future spending with bigger scrutiny. I think more about what I spend the money on, and I think more about making sure that I get the value I pay for. And that I relentlessly cut out excess spending.

Case in point: I have become a cable cutter. Goodbye flow TV and big packages. Hello, select streaming services. Net effect? Minus 50 percent in cost. Per month.

I am not assuming that I am the only one who have experienced this. And let me add more to it:

It’s not that I think I am worse off than before. I think what I have now suits my needs better and more precise, and all the stuff I have cut out were things, I could easily live without.

Let’s go back towards the point about a time of crisis being a great time to start a new venture:

Perhaps it is not so much about the short term propensity towards trying to squeeze your suppliers, partners and employees.

Perhaps it is more about making damn sure that you deliver real value to your customers based on what they define as real value – not you.

Maybe it is about making sure that every single time one of your customers contemplate whether they can live without what you’re delivering, they will quickly move on to the next item on their list, because what you’re doing is an evident ‘keeper’.

If you get that out of starting a new venture during a time of crisis, I think you might just have something that will not only be able to make it through the crisis but actually thrive during and afterwards.

You’re welcome.

(Photo: Pixabay.com)