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Disrupting loyalty: How start-ups are hacking customer acquisition and retention

Customers no longer have to stay with brands they don’t love, and no amount of clever marketing can overcome this simple truth. More and more, people are comparing your brand less to your competitors, and more to the best of the best brands in the world.

Successful start-ups are often customer acquisition experts out of necessity. Most start-ups have a limited runway to quickly find product-market fit and so it’s critical that their relationship with customers is more than just a transaction. For a start-up, you rely on your customers to give you candid feedback, to champion your product, and to help evolve it. Start-ups grow quickly because they are in constant dialogue with their customers and using the feedback to build better product experiences.

There are four common techniques that start-ups use to drive acquisition and retention.

1. Find early adopters who love your product

Start-ups learn quickly that you can’t be all things to all people. They’ll often sacrifice early revenue in order to attract the right customers, because while customers are useful, what you really want are people who love your product. It’s often hard for businesses to accept that the first people who discover your product can be incredibly unrepresentative of the broader market your product fits. Without customers who love your product, the data you receive in the early days of product launches can be ambiguous and contradictory, leading you to focus on the wrong features and pricing models. When Google launches beta products, they hand select their customers for launch, based on the audience they think will benefit most from the product, be tolerant of teething problems, and have the reach to get others excited about it.

2. Make it easy for customers to discover you

It’s easy to put a lot of work into understanding how a product will meet the needs of hypothetical customers, but relatively little thought into how actual customers are actually going to discover the product even exists. A laundry list of features and benefits rarely works, and relies on potential customers to care enough in the early stages to bother matching your features to their needs. Customers are loyal to the job they need done, not the product that helps them do it, so focus your marketing on the one specific benefit your product delivers. Make sure this benefit is reflected in everything from your website to advertising keywords.

3. Don’t be afraid to create relationships that feel personal

Everyone likes to feel important, but it’s easy to forget that B2B or B2C really means human to human.

When you sign up for HotelQuickly, you get an email within a few minutes from the co-founder and CTO, welcoming you to the App and offering you a $15 voucher for your first booking. Start-ups know that while breaking up with companies is easy; breaking up with people is hard – so they engineer their customer support flows to create a personal relationship as quickly as possible.

The team at Sidekicker have built an on-boarding workflow that combines emails, phone calls and on-screen help to personally guide new users through creating their first job post. This not only helps them retain a large percentage of new signups, but also establishes a relationship between their team and customers that help us evolve and grow the product.

4. Create an ecosystem around your product that attracts new users.

The most successful products build an eco-system that fuels word of mouth growth. Virality isn’t just for funny cat videos; you can bake virality into your product by building in features that drive your users to want to get their friends or family on board to share it with them.

For business products, this includes looking at people who don’t actively use your product but benefit from its use up or down the chain. Basecamp, the project management tool by 37Signals does this incredibly well – they have a set of features that make it super easy for users to share information to “non-users”, so that even if you’re just receiving a daily report, you’re in no doubt that the project is being run on Basecamp.

Dropbox fuelled its growth in a similar way, they weren’t the first cloud storage service, but they realised early that their users wanted to be able to share their files with non-users. Several of their competitors required non-users to sign up to view files that had been shared with them, which created friction that forced their users to find a better way to share. Dropbox made sharing easy, and incentived their users with bonus storage for every person they helped sign up. Uber has done the same thing with bonus rides.

This approach creates an ecosystem that’s hooked on your product, they might not be paying members yet, but the next time they need a product like yours, you’ll be top of mind. In short, think about the value your product is creating beyond just the user who’s paying you for the service.


About the Author:

Ben Beath, Head of Digital at Loud & Clear.

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