BUSINESS - Capterra
A business’s first customer is a huge step. Not only is it the first real test of the business, but it also represents the move from interesting idea to actual business. You can be a lot of things without any customers, but I’m hard pressed to say you can really be a business. People who lose money all by themselves in their garages don’t count – in my personal survey – as a business class.
First customers are like first dates. Everyone’s a little confused, no one really knows how to move the relationship along, and, without careful thought and planning, you’re unlikely to get a second. Bad Santa 2 for a first date? Really? Okay.
Getting that first customer usually means relying on your existing network, while getting the second, tenth, and hundredth will often take you out of your comfort zone.
Today, I want to focus in on what you do after getting that first customer and on acquiring the second customer.
Before we can talk about what you need to do to move on to the next set of customers, we need to understand what value that first customer brings to the table.
Your first customer is taking a leap of faith. This is a person or company that sees value in what you’re promising, but there’s no real way to know if you’re going to deliver. Even if you’re selling a single product, like a pair of jeans, there’s faith in that purchase.
That means two things. First, you need to be very careful about how you set and track expectations. We’ve talked before about the value of customer research before kicking a business off, but now you need to start diving into existing customer research.
Second, you need to be nice to that first customer. Like, nicer than you think you need to be generally speaking. They’re going to be providing you with a ton of great data, but only if you keep being nice. Again, even if you’re just selling them a piece of clothing, you’re going to want to keep in touch.
What you get from that customer is a roadmap on how to make future customers happy. They’re going to tell you what you did right, what they want changed, and why they made the purchase from you and not your competitor.
Your first customer brings with them a huge amount of value.
If you pay attention to what that first customer tells you, you’ll be able to find your second customer. In an ideal world, the first customer is going to be the warm introduction to the second customer. They’ll love what you’re doing so much that they’ll tell everyone they know to come give you money.
If that doesn’t happen, you’ll still get a good plan from the research you do with that first customer. HubSpot has an excellent piece on running customer research on a budget. One of the nice little questions they suggest asking customers is “How would you describe this product to a boss or client? How would you describe it to your mother?”
These sorts of questions will help you figure out why that customer made the purchase. Once you know that, you can start thinking about where someone would go to solve that problem.
Think about American Giant, for a second. Here’s a business that makes hoodies and charges $89 for them. That’s not how I’d describe it to my mother, though, that’s a cynical description. I’d say, “They make really rugged hoodies in the US and I can wear them in almost any weather.”
Now, the company has some real insight to help it find another customer. People who want American-made goods, people who want flexibility in their wardrobe, and people who want durable goods. These are all leads to new sales. The more you talk to me about my experience, the more you’ll find out about your other customers.
Once you’ve tweaked that initial research with the new research you’ve gotten from that first customer, you blend the two together to iterate on your plans. Each new piece of the market you understand expands your potential reach.
It is very, very easy to go too heavy into promotion and marketing after seeing a small amount of success. Your first customer, first ten customers, maybe even your first hundred customers shouldn’t change the fundamentals of your product or your market.
If you did your market research well at the beginning of this whole process, you’ve already got a good handle on who you’re selling to and what you’re selling them. You can take over the Asian market some other time. Having a single customer in Tokyo doesn’t mean that you’re ready to cross the Pacific.
To keep yourself in line, I like to draw up an investment thesis. An investment thesis explains why you’re spending the money that you’re spending, what you expect to gain from that investment, and what would have to change for that thesis to be nullified.
In the HBR example I linked, the discussion revolves around buying another business. You can just as easily build a thesis for investing in your product or marketing. If the basics of the thesis don’t change, then you don’t veer off course.
Change for the sake of change is waste.
While you don’t want to spread yourself too thin, you do need to think about the future. Getting that first customer is one of the biggest milestones for any business. Go into the local sandwich shop and look for a dollar pinned to the wall – that’s the first buck the place made.
Having customers lined up means that you do need to think about the future. You’ll iterate on your offering, expand your promotional plans, and maybe even start some related businesses on the side.
If you’re going to branch out, make sure you have a plan in place. Make that investment thesis for your new plan and stick to the thesis. It’s the old “know when to hold, know when to fold” system.
Inc. posted an interesting article on scaling businesses that includes, I think, the most important point to keep in mind when your grow – “Nothing makes scaling more manageable than a simplified business model.” If you focus on that foundation, you’ll continue to have a strong base to expand off from.
To sum it all up:
I’d love to hear how you found those first few customers. Please drop a line in the comments below or shoot me an email. Good luck.