Why Your First Generation of Customers Are the Most Important
Every entrepreneur’s dream is to build a business and scale it to ridiculous heights. Google now sees more than 3.5 billion searches every day, but it started with almost zero. And while the idea of having billions of customers is appealing, most of us also realize it’s unrealistic. With luck, you can reasonably aim for hundreds, thousands, or even millions of customers, depending on what it is you’re actually selling. When most businesses think of customer service or customer retention, they think of these potential thousands or millions of customers.
However, there’s a flaw in this approach that leads many startups down a dangerous path. In reality, these thousands or millions of customers aren’t nearly as important as the handful you’ll start out with. Though they pale in comparison when it comes to sheer numbers, your first generation of customers are by far the most important you’ll have, and you need to treat them right if you want to succeed.
Proof of the Model
Despite all the great resources available for writing an effective business plan, everything you’ve researched, brainstormed, and hashed out is still just on paper. Your market research might suggest that you’ll kick up sufficient demand and that users will have a use for your product or service for years, but what real evidence do you have? Your first generation of customers will be putting your model to the test, while you still have the flexibility to make changes if necessary. If you find it nearly impossible to bring on or retain customers with your current plan, you know you need to go back to the drawing board.
Working Out the Kinks
Let’s assume your model is solid and you manage to attract a small group of clients to serve as your first generation. Again, no matter how extensively you’ve planned this, there are going to be flaws in your products and services. These customers will be pivotal in helping you uncover and address these flaws. Observe them closely; see how they use your products and services, and gather as much feedback as possible. This “beta test” of your business will help you learn which processes need further development or refinement, and allow you to build a more stable enterprise.
Customer Loyalty
Your first generation of customers may also have a stronger inherent sense of loyalty to your brand. Consider a scenario in which your client joins up with you during your early stages, then stays with you as you scale on multiple orders of magnitude. You’ll probably lock them in at lower pricing and do them favors, and they’ll be so used to doing business with you that they’ll never want to leave. Essentially, if you can keep your early clients through the rough initial stages, you’ll have a good shot at keeping them for life.
Testimonials and Brand Evangelism
One of the biggest influencers in consumer decision making is social proof. Basically, if people see that other people have used and enjoy a particular product or service, they’ll be more likely to buy it. When you start out, you’ll probably have zero social proof, which weighs heavily on your ability to attract new customers. When you have thousands, this isn’t really an issue. The pivotal stage then, is achieving your first few dozen testimonials and brand evangelists — and the only ones capable of stepping into these roles are your first generation of customers.
Decreasing Volatility
We may live in a “golden age” of entrepreneurship, but that doesn’t mean business ownership is any less volatile. During the first few months (and sometimes, years) of your business, you’ll be in a state of heavy flux — your products, team members, organizational structure, and brand are all likely to change. As a result, you can’t depend on these constructs to keep your customers around for you — you have to prioritize your customers above these items, and connect with them on a human level.
A More Positive Customer Experience
It doesn’t take much to give your first generation of customers a better overall experience, or to use them as guinea pigs for your business model. In fact, you can accomplish most of these goals by simply paying attention. Listen to them when they have feedback. Call them up to make sure things are going well. If something isn’t going well, fix it. Go above and beyond the call of duty to make sure they’re satisfied. These are basic principles that can help you impress and retain that all-too important first generation.
From there, scaling isn’t always easy, but it is relatively straightforward. With your first generation taken care of, you’ll have a suitable blueprint to use on your subsequent generations of customers. They’ll likely respond the same way your first generation did, and if you’re successful, you can repeat these processes for bigger and bigger circles, until your startup is no longer a startup.
For more content like this, be sure to check out my podcast, The Entrepreneur Cast! And be sure to check out my business, EmailAnalytics, which visualizes your email activity — or that of your team.
