The path from zero to a million customers can be a difficult and unpredictable journey. Hitting the one million mark is a big deal no matter what your market segment. It is even more significant for B2B products and services that might not have the sizzle of a sexy consumer offering or as broad of an audience.
At the same time, you don’t need excessive resources and an endless well of cash. You just need to make the effort, build the connection and reach out to customers, influencers and your team and find the growth strategies that can really accelerate your growth. As your startup works to build a product and a company that will last, here are the strategies for getting to your first million – and beyond.
Facebook, now a billion-user behemoth, hit the milestone in 10 months. Pocket, which lets you save web articles to read later, hit 20 million users when it had just 20 employees. Live-video streaming apps Meerkat and Periscope (now part of the Twitter nest) zipped to the million mark quickly after breaking out at SXSW 2015.
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The First Thousand Customers
In the early stages it is better to gain a thousand customers who love you than a million who don’t like you enough to stick around. Word-of-mouth is extremely valuable and will help drive new customer acquisition. Get to know your customers, talk to them and establish a feedback loop. Start measuring early. How do you put a yard stick on customer love? Net Promoter scores, surveys, reviews, and other tools can help.
At fashion marketplace Poshmark, cofounder Tracy Sun Tu says she personally recruited the first 500 fashion bloggers who she knew would be critical for the social component of the site.
Earning Loyal Customers
Your customers are the best soldiers in your marketing army: The best case scenario is that your product has a viral loop – think about how LinkedIn and Facebook members refer others to the site as they build out their own connections. With a viral loop, when you drive more usage from your current customer base, you drive more new customer acquisition. DocuSign’s viral loop is an organic part of the product: sending documents to others to sign using DocuSign introduces tens of thousands of new users to DocuSign every day.
Customer Connections – Identify your advocates and develop clear strategies to help them spread the word for you. Intuit cofounder Scott Cook famously said, “A brand is no longer what we tell the consumer it is – it is what consumers tell each other it is.” Intuit leverages accountants as brand ambassadors, enabling and encouraging them to connect small businesses with QuickBooks in a personal way.
Everyone enjoys being a VIP – Someone who is in the inner circle and has something that no one else has. Smart businesses use this feeling to their advantage, as a reward to encourage the first trove of users to sign up. Pinterest, Spotify, Facebook were initially invite only and that only made them more attractive. It generated amazing amounts of buzz. People wanted in. They wanted to be part the privileged few.
About.me used Exclusively create a sense of scarcity and urgency. About Me experienced an amazing reaction as they gained 400,000 users within a few months of launching. People clamoured to ensure they got their own URL before anyone else. The hype said “act now or miss out”…. and users acted! Does your product have a scarce aspect that benefits users on a first come, first serve basis? If not, can you craft one?
New Growth Channels
Don’t be afraid to invest time and money in customer acquisition. Understand these costs and plan wisely so you don’t blow your budget. Here are a few tactics and strategies:
Referral and affiliate programs – customers giving away discount codes to friends – have helped fuel tremendous growth for companies like Lyft and Uber. Essentially, you’re giving people incentives to refer others to become your customers and use your product more.
Business Development Relationships – Business development partnerships can be very valuable in driving exposure and new user acquisition – Pocket, for instance, is available on 500 apps. But proceed with care as business development partnerships can drain time and development resources, particularly if you’re trying to partner with a behemoth.
While some lucky startups sprint to a million users, for most the climb to the million milestone is a marathon. What’s important is to build a strong foundation that will help as you scale. Test, measure, and iterate to determine the best approach for your product and your customers. Importantly, the strategies that make the companies successful starting out will not necessarily take them to the next level.