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startup founders talking to potential customers

Strategies to Finding and Retaining Startup Customers

By Melissa Khasbagan

December 12, 2018

This article was written by Melissa Khasbagan, LaunchX UPenn alum and cofounder of Tailored.

During my summer at LaunchX @ UPenn, I co-founded a company called Tailored: a personalized online shopping platform for young men that offers them curated clothes based off style and price input. Since day one, we had to find people that were willing to try out our service.

Through the guidance we were given at Launch, we were able to gain a better understanding of our customers and learn how to appeal to them. This article goes over some of the tips that worked for us and I’d like to share them with YOU!

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The power of a customer should not be underestimated. Customers are the people who drive your business. Therefore, knowing your customers well is crucial. This also helps you build brand retention in the long run. Plus, it gives you a competitive edge as 80% of business don’t understand their customers beyond basic demographics.  

Here are 3 tips to finding the right customers:

1) Talk to People

LaunchX students talking and learning about customers

Before you start prototyping and creating an MVP, you must go on a journey of discovery with the customer. If you are in the early stages of your company, the most important thing is to talk to people. This can be done through conducting surveys or in person interviews. The goal is to share your idea with anyone who is willing to listen.  

Here are some tips for conducting a good interview:

  • Have a couple of main questions to initiate the conversation

  • Keep questions open ended to avoid bias (don’t ask yes/no questions)

  • Let the conversation flow naturally, ask them why, why, and why to find an underlying reason

  • Look for people who aren’t busy

  • Let them do most of the talking, your job is just to take notes

  • Write down key phrases to look back at

There’s not a certain amount of time you should have for each interview, but keep it more than 5-10 minutes. This allows you to really understand their perspective.

2) Know Your Exact Customer

After talking to people and looking over the interviews, you should have a good understanding of your customer’s frustrations.

Some questions you must be able to answer are:

  • What challenges do they face?
  • What stops them from overcoming those challenges?
  • What needs to be done to make their lives easier?
  • What tools are they currently using and why don’t they work?
  • What motivates them?

Really get inside the head of the customer. You should know them so well that you know their entire schedule, from the time they wake up to the time they sleep (well, maybe not this much!)

The next step is to build a target persona. The more specific you can get, the better.

founder pitching her startup

Examples of target personas:

  • Tailored: young men from 18-25 who hate shopping but care about their style, currently in school

  • Elderly women living in Austin, makes less than $50,000 a year

  • Single males in their thirties living in New York, love exercising and spending money on overpriced coffee

Since you are likely starting with little to no resources, focus on a very narrow customer persona so that you can differentiate yourself among a sea of competitors. Once you begin attracting more people, you can then expand your target market. Launch small then scale up.

Remember,

“Don't find customers for your products, find products for your customers.” -Seth Godin

3) Advertising and Marketing

Now that you know who you’re looking for, it’s time to put these tips into action!

Once you’ve been able to create a target persona, focus on different ways you can market your product or service to people.  
Here are some examples, if you’re interested in learning more, I recommend this article.  

startup team sharing their marketing materials

  • Social media

  • Personal selling

  • Partnerships

  • Word of mouth

  • Referrals

  • Networking

Experiment with all these different forms of marketing; there is not one right way to reach your customers! As Tailored is a clothing platform for young men, the first thing we focused on was social media marketing. Eventually, we started forming partnerships with clothing companies.

Donald Miller’s book, Building A StoryBrand, states that every person who finds your business must be able to answer these three questions:

  1. What do you offer?

  2. How will it make my life better?

  3. What do I need to do to buy it?

He also talks about the three things every human wants: to be seen, heard, and understood. The products and services you sell must be marketed as “an aid to helping people survive, thrive, be accepted, or achieve an aspirational identity.”

If you can’t solve your customers’ problems or concerns, they’ll just go to another company who can better suite them. People always want to know, “what’s in it for me?”

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You’ve now learned how to find customers, but that’s only half of it! It’s time to master the skills need to retain customers.

The key to retaining customers is to develop a relationship with them.

1) Continue Getting Feedback

Feedback. Feedback. Feedback. By making sure that your customer’s voice is always being heard, it lets them know that they are valued. This can be done through customer satisfaction surveys, phone calls, or interviews.

startup founders talking

Plus, it gives your company valuable insights! You can see how consumers interact with your product or service and how it could be better.

The most important thing is to never assume anything about the customer. For example, if you are adding new features, test it out first on a small scale to see what people think.

2) Reward your customers

Customer loyalty and satisfaction is directly linked to higher revenue. The good thing is that there are so many different ways to reward your customers. Amazon Prime, for example, gives you access to free two day shipping. Sephora’s Beauty Insiders program gives you a free gift on your birthday. Starbucks Rewards gives birthday drinks and free in-store refills.

More examples include:

  • Giving away items with a purchase

  • Special discounts

  • Inviting potential customers to try things for free

  • Creating a loyalty program

  • Celebrating them via social media or email

  • Early access to products or services

Beyond this, thank customers who take the time to write reviews, submit photos, or like your Facebook page. Not only will this build customer loyalty, but will ultimately increase your customer lifetime value.

“People don't care how much you know until they know how much you care.” ― Theodore Roosevelt

3) Word of mouth

If you’re creating something that addresses a specific market, meet the need of the customer so well that they share it with their family and friends. Those people share it with their friends- aka the snowball effect! Free advertising, who doesn’t love that?!

Still not convinced? Check out these stats about WOM!

Ways to improve your WOM strategy include:

  • Providing lots of value

  • Giving people reasons to talk

  • Engaging with consumers

  • Emotion appeal, Make-a-Wish is a great example of this

  • Making it easy to recieve reviews and feedback

  • Community involvement

  • Referral program

Above all, make sure that you always satisfy the needs of a customer.

“There is only one boss-the customer.” ― Sam Walton, Founder of Walmart

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Hopefully, this article has helped you become better at finding and keeping customers. Although you can’t please everyone, try soliciting their opinions for ways to improve your product or service. Understanding your customer well could be the difference between the failure and success of your company.

I encourage you to experiment with different strategies to see what works the best for your company!