Having worked with startups of all stages, I came across the claim especially in B2B-oriented companies quite often “We need to hire a salesperson and then we can start acquiring our first customers”. I can see that not everybody is used to talking to strangers and exciting them about a trade. But as a founder, you have this natural spark as you are the creator, inventor and driver of your product or solution, which is exactly needed for acquiring customers. So here are 5 common myths about customer acquisition in B2B startups, I want to bust.
1. The Sales Department does Customer Acquisition
Not quite. Of course, over time as a founding team, you will have to build up a sales department with qualified commercially trained people that come at a price. This doesn’t mean you should wait with your customer acquisition until you can afford this. As a founding team, everybody should feel responsible and enjoy customer conversations that in the end will help you to build successful products – even before they are launched. The most successful customer-centered organizations make it a habit for everyone to have close customer contact and not lose track of their most valuable resource: their target market. Also, don’t underestimate the power of the founders in the first customer touchpoints. You are the face of the company, the experts and many cases the most knowledgeable people for solving your customer’s problem. Training external sales people to do this job, will be the step two but use the momentum in the beginning and get used to talking to as many customers early on as possible.
2. You have to win every Customer
If you manage to do this – amazing! But we all know, only a fraction of your first prospects convert into paying customers. You can be distracted by time-consuming first contacts that seem to be interested in your solution but do they fulfill the BANT (Budget – Authority – Need – Timeframe) criteria? If not, consider if you are talking to the right people. Also as Dr. Matthias Meyer mentioned in our recent Gründer Guide podcast – the right people might not necessarily mean the highest ranked individuals in the organization. Find those who really have that problem that you are offering to solve. Having a large lead pipeline of interested maybe-customers needs to be qualified thoroughly and identified, what is needed to win them as your customer. Sorting out the ones who are not the right fit for you, will help you to prioritize your valuable time as founders.
3. The cheapest Solution wins
Pricing is a complex topic and you might think that selling at the lowest price will guarantee you the first customers. The reality is that we associate higher prices with quality. So if you set your prices too low, odds are high you are perceived as “not there yet”. On the other hand, overselling without delivering especially in B2B markets when you are trying to convince corporates isn’t recommended as they will realize quickly what you are really capable of. How can you solve this dilemma? Field testing even without a ready-built solution (can be just a click dummy) will validate your assumptions of the willingness to pay of your customer. A waiting list is a good indication of demand for your product. Following the MVP approach of the lean startup (link to Eric Ries’ book: The lean Startup) you build what is really needed first and add more and more features over time. That way, you maintain quality of your first product but don’t undersell, either.
4. CRM systems are built for large Companies
Customer relationship management is a comprehensive approach and not just an IT system for data management. Before you start acquiring customers get familiar with their customer journey. What are their touch points, what is their need and pain and what is the knowledge they acquired before talking to somebody from your team or you as a founder? Tailored content will help you to generate leads by asking for permission to contact these first contacts and use the power of social media to generate buzz. Building awareness and traction is crucial for successful customer acquisition. Consequently, state-of-the art CRM solutions help you to keep track of your opportunities (so in sales terms: pre-qualified leads with a certain probability to buy) and develop them over the different stage of the sales funnel. Once your team is growing, a structured CRM system will also make things easier to hand over customer to further departments such as customer care or account management or tackle a large customer base with targeted online marketing campaigns. In essence, data management is paramount for growing your company even in the beginning. Almost all CRM tools have a free trial, so figure out if its’ Hubspot, Salesforce, Pipedrive or any other software tool that helps you to convert your leads into paying customers. They have payment plans suitable for startups as well, and spoiler: the earlier you implement it the easier. Later migrations from complex excel spreadsheets are super painful.
5. If it works for one Customer, it works for all
I wish it would. You will always be in the discrepancy of what the customers want, what they are willing to pay for and what you can deliver in a realistic time horizon. If you are aiming for a scalable startup, incorporate customer feedback and aggregate to take the standardization vs. customization decisions. In the early days of your startup, you might want to make sure your customer gets what they want but catering for every feature a customer ever asks for, will not be economical. Before you go for it, get data from various customers. Is the customer strategic enough because their customer lifetime value will be worth the investment of customization or does it hinder you to scale in the future? Looking at the potential outlook of a customer even in the early stage will help you to steer your product decisions. Last take-away, turning down a customer is part of the game as well and with the right data you can acquire those that are beneficial for your startup’s growth in the long run.