Putting together a startup is not easy. You need to come up with a great idea, validate it, build a solution, and then, quite inevitably, sell it. That last part is where things get complicated. Acquiring first customers is a dreaded nightmare for most entrepreneurs. The rules for early customer acquisition in Fortune 500 companies don’t necessarily apply to early-stage startups. Often, for young startups, early believers of the idea become the first 10 customers who pay for the finished product.
But for founders, the question still remains, “How to find someone who pays for this?”
The picture is often of three or four twentysomethings working out of a garage on a not-so-perfect product that doesn’t look hugely sellable. Especially when the startup is on a shoestring budget and a dedicated sales team is out of the question.
Nowadays, investors expect startups to acquire customers and generate revenue before you approach them for funding. Today, just having a big idea is not enough. Real results matter. Besides, by acquiring early customers, you reduce the risk your startup faces as an early-stage company.
8 Actionable Ways of Acquiring First Customers For Startups is a collection of highly actionable methods to go about acquiring first customers for your startup. We have insights from our own experiences combined with expert advice and curated blog posts from all over the web.
How to get early adopters? How to reach out to your ideal target market and close sales? Especially among founders inexperienced in sales and marketing, there is room for confusion about acquiring first customers. So how do you overcome the insecurities and take the leap?
Acquiring First Customers: Step 1 – Customer Acquisition
The customer acquisition phase is where customers learn about a product before they make a decision about a purchase. The landing page is more or less the company’s front door; with web/mobile apps, customer acquisition is all about bringing customers there. At the landing page, they can try or purchase the product.
At this stage, your marketing strategy need not be organised, scalable or anything conventional. It’s also important to remember that these marketing tactics might apply only to early-stage startups. These might not even be useful in the next steps of your company’s growth. However, don’t let the anxiety gnaw away at your confidence. The most important job is to get your first customers on board. If you listen to them and deliver, that success can fuel your next steps.
Acquiring First Customers: Step 2 – Customer Activation
We say a customer is activated when they show interest through a purchase or a free download. Even if the customer hasn’t made a purchase or registered, we still consider them activated, provided they have left contact information wilfully and wish to be kept informed about the product.
Customer acquisition uses free or paid tactics. Free tactics include public relations, viral marketing, search engine optimisation, social networking and contextual link building service.
Once the free customer acquisition programs are set rolling, it’s time to get those paid tactics out. This includes pay-per-click advertising, affiliate marketing, online or traditional media advertising, and online lead generation.
Activation is exceptionally relevant to online businesses. It decides whether the customers are interested, just want to check out the product or actually make a move.
In 8 Actionable Ways of Acquiring First 10 Customers for Startups, we will look at some highly valued steps for getting your first 10 customers.
How To Get Your First 10 Customers Onboard?
Getting the first 10 customers for your startup should happen in the earliest stage of your growth. That’s where fast, low-cost marketing efforts come in. The goal of early-stage customer acquisition is to bring in users and make them paying customers.
1. Identify the need
Most startups do not automatically launch with the perfect product. Although your product is your baby, it’s not wise to become too attached to it. At every stage, looking for the need is essential. Your initial product might need several tweaks and sometimes, overhauls to fit in with the real need. So, how do you validate the need for your product?
Look at what your potential early customers want.
One quick tip: If you’re creating an alternative for Uber, you should research the shortcomings of the existing service. For example, run a google search for complaints about Uber. Or search Twitter for “Uber problems”: it connects you directly to the person who tweeted it. Reaching out to them and talking to other disgruntled customers will give you an impression of what the customers really need.
Back when the founders of Zapier.com were looking for first customers for their platform integration software, they googled various combinations of apps that could be integrated. That’s when they came across this question posted on StackExchange:
This question opened up the way to them building a solution, and Andrew Warner, the host of Mixergy Podcast becoming their first customer. With such tailor-made solutions, the team was able to quickly escalate to their first 10 customers and beyond. Read the Zapier story here.
2. Identify your market
Once the need is clearly established, the next step is to know who you are selling to. A customer acquisition strategy doesn’t work out if you don’t know your target audience.
Getting your first 10 customers can happen through various channels, but if those early customers are not part of your ideal target market, scaling becomes difficult. Try this to know your customers better: Make a list of all your products and identify their value. Next, figure out who would benefit the most from the value offered by your product. That would be your market.
One mistake entrepreneurs make is trying to make their product something for everyone. It’s always better to start with a niche of customers. Instead of defining your customer base as all readers of Indiehackers, you could boil it down to developers who read Indiehackers. This is a niche that you can work on dedicatedly. Take, for instance, Facebook. Their early adopters were from elite colleges. SoundCloud started with producers for sound sharing globally. Airbnb began with spare bedrooms.
So by narrowing it down, (in the beginning) your product becomes more comfortable to explain. Also, you get to convince early users better.
3. Position your Product as the Answer
So far, we have identified the need and the needy. Next is the crucial decision of how you position your product in the market. Remember that you are pulling the customer towards your product, and not pushing your product at them.
The concept of positioning strategy caught on in the 1970s, thanks to Al Ries and Jack Trout. There is a problem that you have identified. There is also a definite target group that faces this problem. Now, all we need is a solution. So, the next important step is to position your product as the answer.
Once you’re assured of how you want your product to be recognised in the market, you will be able to communicate the value of your product to customers. Articulating the benefits of the product and the problems that it solves is at the heart of your marketing strategy. That way, you don’t stray from the main idea and vision of your product. Besides, your customers also understand and are reminded why your product is the best option to meet their needs.
J. Walter Thompson ad agency’s positioning of 7Up as “Uncola”, using the oppositional energy is one of the oldest yet best examples. The campaign positioned the product as an alternative drink for alternative people (for those who did not want to drink Pepsi or Coca-Cola).
4. Identify your first customers
This is not the same as identifying the market. Identifying your first customers is a series of steps to hit the right target audience. Take for instance, what we learnt at Datahut from this experience:
A few years ago, Datahut launched a startup partner program. The team was working closely with startups building B2B and B2C products. One of the partner companies had a prototype of a business intelligence product. They were struggling to acquire early customers, and the complementary technology approach wasn’t clearly working for them.
Here’s what happened during one of our brainstorming sessions. One of our marketing interns proposed an idea to acquire early customers for the product. I’ll give you a quick walkthrough of the process. If you’d like to read the whole story, follow this link.
Build an ideal buyer profile –
Build an ideal customer profile. Keep in mind that this person derives the highest value from your product. To build their profile, refer to their industry type, number of employees, annual revenue, technologies used etc.
- Aggregate and Compare data –
Obtain profiles of companies from startup directories and contrast them against the ideal profile. You will be able to narrow down the list.
- Get Additional Information –
Obtain additional information required to get in touch with the prospects, like email addresses.
- Leveraging networks to Reach out to Prospects-
The company used LinkedIn to reach out to the profiles, with tremendous success. The founders directly did all the contacting after getting an introduction from mutual connections. They acquired their first 10 customers in less than a month.
And all this, before they even had their public launch.
5. Use your Network for Acquiring First Customers
When you’re acquiring first customers, the first 10 customers could very well be your own friends. Or friends of your friends. Or their friends.
There could also be networks in your family that could be leveraged. Ask them about their pain points. Use the data to validate your idea. And once you’re prepared, don’t shy away from introducing your product/service at appropriate occasions. When you’re in the shoes of a founder, you need to be a natural at pitching. And what better way than to try selling it to people you already know?
After a few conversations, you will be able to anticipate the types of questions real prospects will ask you. Also, direct your efforts to expand your network. Ask your circle to introduce you to their circles.
You might already know influencers or investors. Reach out and connect with them. Two kinds of people are significant:
- Other business owners with a customer base you can tap into
- Your investor who might have a vast network: You can always ask him to spread the word in his community
6. Founders do the marketing
It’s okay to not have an enormous budget allocated for marketing when your company is still young. Often, startups start with no money, to begin with. When you can’t afford a marketing agency to do your work, just do the best possible thing: Earn your early users yourself.
According to David Skok, General Partner at Matrix Partners, “Try using the founders of the company on as many sales calls as possible. After all, they can change the messaging, change the product, and react to what they’re discovering in failed sales calls.”
Acquiring your first 10 customers might look like an uphill climb when you’re not inherently a sales and marketing person, but that’s something you need to learn to be. After all, there’s not a lot of time in a fast-paced startup environment, and the results need to be achieved quickly.
7. Acquiring your first 10 customers through a Private Mailing List
When you’re reaching out to your friends and family, also ask them if they’d like to be added to a private mailing list. This list is where you’ll be sharing updates of the product you’re building. If they consent, and you keep them informed, chances are they might later turn into some of your first 10 customers.
Hiten Shah from TheStartupChat recommends this course of action:
- Set up a landing page
- Collect email addresses using any convenient tool
- Drive traffic to your site or blog if there’s no regular audience otherwise
8. Listen to Your First Customers and Follow Up
Your first customers are the most important. There’s a huge deal to be learnt from them. Since they were the first ones to understand the solution, their feedback is critical to your product’s success. Listen to them. As far as possible, maintain a one-to-one relationship with them. Wherever reasonable, try to include tailor-made solutions and features for your first 10 customers and earn their loyalty.
Early adopters are people who have a good sense of the market. They can also give smart advice and honest opinion on your product. After all, there’s a reason they became your first customer. So by paying attention to them, not only will you get more insights about your product, but they’ll also become early promoters of your brand.
The more the number of first customers, the more the number of feedbacks and the better the product.
Summing Up: Customer Acquisition is Continuous
Customer acquisition is not a one-time task. The process requires constant work and continuous review. When it comes to acquiring first customers for startups, many companies use the same channels and tactics. But any strategy, to be genuinely fruitful, must be reworked to accommodate the customers’ mindset and the industry your startup is working in.
One of the most important things to remember for customer acquisition and retention is that you shouldn’t lie about the risks or leave them unacknowledged. At Datahut, we promise our customers clean data from the web. If unsatisfied, we refund their money. Remember that your first 10 customers can also be your loyal brand ambassadors if treated satisfactorily. Staying honest and strong builds trust among our customers, and that’s one of the reasons why we have been able to keep our first customers happy from day one.
You can check out our services here.