The power of the Internet makes many startups think they can just put their information online and let the customers find them. But this is like being a wallflower at a school dance, watching everyone else pair up.
Unless you have the leading SEO expert working on your team, there’s a good chance your startup will run out of money before your customers discover you. Decision makers are inundated with LinkedIn invites and emails. It’s nearly impossible to get your message heard.
In today’s noisy, overcrowded marketplace, you can’t hope to be discovered. The best way to grow your business is to handpick your perfect customers and give them a call. In “Predictable Revenue,” Aaron Ross calls this “cold calls 2.0.” In the book, he shares how Salesforce targeted customer lists and doubled its pipeline – even in a non-small business market. Succeeding with this method comes down to several factors.
For one thing, when you seek out and target the exact customers you exist to serve, you can focus your resources on leads that will result in more conversions. Focusing only on prospects with the potential to turn into paying customers is especially important when you’re in the startup phase, but it remains effective as your company grows.
Targeting your customers also helps reduce the conflict between sales and product engineering. According to Dave Kellogg, CEO of Host Analytics, post-sale “deficiencies” often occur because salespeople don’t have well-defined criteria for matching customers to products. When this happens, they’re likely to sell to customers who may not be a good fit for the product to begin with.
Avoiding this conflict is critical for scaling your business because these first customers will define your brand and attract your next set of customers. In fact, Edelman found that 84 percent of all B2B deals stem from referrals from existing customers.
Once you understand the benefits of picking your customers (and the risks of waiting for them to find you), you need to take action. Here are five strategies for picking your customers:
1. Qualify, qualify, qualify.
Think of customers as long-term investments. You want to know that a year from now, they’ll really need your product and you’ll still be adding value for them. This is especially true if your business is SaaS-based.
2. Analyze their network.
Don’t just determine what companies do and how you can sell to them. Look at their networks – their partners, competitors and customers – to determine their potential for referrals. Companies with large networks have the potential to present you with more business opportunities.
3. Focus on growing companies.
Theoretically, your product can help a losing company. But unless you’re a company that makes huge profits investing in sick businesses, focus on businesses with a future of growth because that’s your future, too. IBM and Oracle didn’t become successful by focusing on dying markets.
One trick for figuring out whether a company is growing is to go to the career section of its website. If the company is hiring at a higher rate than its peers, that’s a great sign.
4. Pick customers who close.
It’s great to aim high, but don’t waste time on unrealistic customers who will never convert. Some salespeople have prospect lists that are all Fortune 500 companies even though they’re still selling to startups. It’s good to have two or three aspirational accounts, but 80 percent of your list should be companies that will actually do business with you.
5. Don’t be fooled by engagement.
Unless you’re Facebook, engagement doesn’t equal revenue. Placing too much emphasis on engagement just wastes resources on people who find your product valuable, but not valuable enough to pay for it.
If you want to build a strong customer base that will continue to bring in revenue for years to come, be proactive about seeking out the customers you want. Some startups seem to think they’re the star quarterbacks who will naturally attract everyone, but in reality, they’re the wallflowers standing around awkwardly waiting to be noticed.
Don’t be the wallflower. Get out there, and find the people who want to dance with you.