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Winning clients and the benefits for a startup
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Finding effective ways to identify, approach, and convert sales prospects into paying customers is pivotal for a startup early on. The first few clients that a startup wins will help refine the product and position the startup within the industry.
This article looks at 4 potential ways to win clients and the benefits of a first hire. We also share thoughts from Tom Lawrence, the founder and CEO of MVPR who recently spoke on the Techstory.fm podcast.
At the early stages, it is important to identify the ideal customer profile (ICP) and what their pain points are. Considering what problems the product or platform solves and who specifically has that issue will help to better carve out the ICP. For example, the ICP may be other startup founders or it may be Heads of People or Chief Operating Officers.
Startup founders may find it helpful to conduct market research to understand the target market and industry trends. It is helpful to pinpoint the business needs and challenges of potential prospects to confirm if they align with product offerings.
Identifying the ICP may not be a one-time process. As the business and market evolves, founders may need to revisit and refine their ICP based on factors such as revenue and retention potential.
Winning a first client may actually come from within a personal or professional network on LinkedIn or other platforms, if they qualify for the ICP. It may also bring in other possible prospects who may be a good fit.
Attending local networking groups or industry events relevant may be an additional way to find new prospects. Startups could have a booth at a trade show or conference, or generally network with other attendees. This could be helpful to build connections, and revisit the conversation online to pitch the product further.
Once a startup has identified a list of potential prospects, they will need to start approaching them. At the early stages, this is usually through outbound sales prospecting which will ensure those who are contacted have qualified as a fit.
Some possible outbound tactics may include:
Having a strong online presence is a possible way to attract potential inbound clients, this may include having an optimised website or social media accounts. Startup founders should allocate a certain budget to their marketing strategy to help drive traffic. This may include:
Securing the initial client(s) can help promote the growth of a startup. Undoubtedly, it generates revenue, but it also has additional benefits.
A satisfied first customer can provide valuable feedback and insights about the product or software. This can help refine the product and build out areas where necessary to serve the current and prospective clients. These changes may vary depending on the business needs of the customer.
Positive feedback may also serve as social proof which can be used in marketing efforts to build trust and attract more customers. It helps demonstrate that the product offering delivers value and can help establish credibility in the industry.
Tom highlighted when discussing how to deal with clients who complain:
“To be honest it's the bit that I like the most… I love it when customers complain about your product. If they didn't care they would just… unsubscribe and leave.”
“When they complain about the product, they're like, 'I really wish it would do this.' Or, they send me a bug request all the time… I'm like 'Tell me more, tell me more’... Bug feedback is my favourite kind of feedback.”
“Ultimately, your customers are only going to tell you how to build the product, and it's up to you how much you decide how much you listen to them versus the vision that you have in your mind.”
The first client may help shape a business’ growth. For example,a subscription for a certain product or software service may start at the lower end for the early adopters, but over time this may increase.
Increasing a subscription price will depend on certain strategic factors, such as:
As Tom discusses:
“My favourite moment so far, I mean the first customer is pretty special. We had our first customer [in April 2021], and we started building the product in April 2021. We charged them £40 a month… My second favourite moment came about a month after that when the founder messaged me and he was like, 'I don't think you're charging us enough for what we were receiving, we think you should double it… And so I doubled it to £80 a month, and yeah we obviously doubled our monthly revenue”
“It’s just crazy, it shows you how much you get wrong in the early days, but, you know, we were looking for customers at the time. Who knows, if they hadn't told us we should double our pricing, maybe, maybe we'd still be charging £40 a month.”
Securing a first client is a significant milestone for any startup. A first hire can help boost team morale, and provides a sense of accomplishment. It can mark the beginning of the startup’s journey of growth and success.
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