One of my (many) problems with the glorified startup culture is the mindset of grow, grow, grow. Everyone seems to be focused growth. Traffic, signups, downloads, paying users,etc., If you’re not growing ____, then you’re failing as a business.
While yes, this is a healthy mindset to have (the goal is always to grow your business and make money), it’s also a slippery slope that can cause you to make mistakes.
It’s a trap that can lead to neglecting your current customers in search of new ones.
At least that’s what happened to me…
A few years ago I was running my startup BrainGain – a job platform that helped people find jobs abroad.
One of my KPI’s was the number of new signups and applications on a week to week basis. I was trying to raise money, and this is what VC’s wanted to see.
I could see that the numbers were stagnating and I was becoming frustrated. We needed a new channel to recruit talent from or we would soon dry up our other sources.
I became obsessed with trying to grow the number of signups on a weekly basis. I hired freelance recruiters, I sent 100’s of messages on linkedin, I created new partnerships with universities, I hustled my ass off.
A few months later though I noticed that, while we were indeed generating new signups and resumes submit, most of these people simply signed up, applied for 1-2 jobs, and then never visited the website again.
Here I was hustling my ass off trying to find people to apply for the jobs, but then once they got into the funnel I sat on them and did nothing.
I had talent in the pipeline waiting to be talked to, waiting to be nurtured, that I was simply ignoring. Instead of reaching out to the people who had ALREADY signed up and applied for jobs, I was chasing new people around.
I realized that I was also doing the same on the Company recruitment side. Companies would sign up with us, post a job description, receive a few candidates, and then the conversation would taper off. Candidate applications would slow to a trickle and then eventually we would be sitting on a dud of a JD.
Rather than trying to find new candidates, what could we do to better engage with our existing ones?
Rather than trying to find new companies, how could we fill our existing roles?
We could do all of this for free, with people who have already expressed interest in our services.
We eventually took this approach and saw a huge increase in the number of applications to jobs as well as overall placements. It didn’t have a revolutionary effect as a business, but it was a powerful reminder in the traps to avoid while building a business.
I learned an important lesson from all of this – In my desire to get new customers, I neglected my current ones.
This is a common mistake I see a lot of businesses (especially startups) make. Instead of re-engaging people who have already signed up, they try to go find new people. Instead of finding ways to up-sell and create new products with an existing user base, they chase after new customers with their same old products.
Many assume that in order to grow you need NEW customers, when IMO the key to growth is your existing customers.
Sure enough when I consulted for my father’s business last year – same problem.
He wanted to grow his business and find new customers. But when we looked at his database of customers, his sales reps were only speaking to about 20% of their total customer base. 80% of their EXISTING customers were being neglected!
Rather than reaching out for new business, the re-established contact with old customers they lost touch with. They eventually revived accounts that led to hundreds of thousands of dollars in revenues.
Same exact thing happened with the client I’m consulting for right now. My first day I was told that the goal is to find new business. Generate new leads. Add new customers.
Within 2 weeks I discovered that out of 4k total leads, over half of them were sitting in the “nurturing” part of the pipeline aka “interested in buying but not right now”. There was no system in place for following up with those people in the nurturing stage, thus they were destined to remain neglected.
I also discovered that in the last quarter over 70% of deals came from single users who became a leader in their organization and added the rest of their team. Our best B2B efforts were coming from single users who enjoyed the product and then told others about it, and it was happening without our influence.
But when I looked at our lifecycle emails, we didn’t have many for our paid single users other than the traditional “thanks for buying!” and “your plan is expiring!”. No emails about referring a friend or giving a review or adding teammates. Nothing.
No wonder we’re lacking on the sales efforts! We weren’t paying attention to the right people. Our users were buying and signing up on their own right in front of our eyes and we couldn’t see the patterns.
Now we’ve wised up. Now we’re implementing all of these drip emails. It’s still early so results are yet to be seen, but these are essential practices to have in place nonetheless.
We’re putting our best effort forward to know we’re making an honest attempt to connect with our existing customers consistently throughout their lifecycle.
There’s no excuse for not doing these things. If you’re asking about lead generation and how to grow your business, but you’re clearly neglecting the people who have ALREADY signed up and expressed interest, you’ve already failed due to lack of preparation.
Set up the systems to bring people into your funnel and then MAINTAIN contact with them throughout their lifecycle. Leave no person un-contacted. Develop as many relationships as you can.
Time and time again I see the example and will probably continue to for the rest of my life. Don’t chase after new business unless you’re already taking care of your existing customers.
What I love about this concept is that this applies to life at large as well. So often we’re so focused on the future we forget what we already have.
We focus on buying new things instead of learning to appreciate what we already have.
We search for new books, movies, and TV instead of re-reading/watching the media that has made the biggest impact on our lives.
We seek new experiences in new places instead of appreciating what we already have in front of us where we currently are.
We focus on who we want to be in the future instead of loving ourselves NOW.
Nurture what you already have before you go look for something new. Focus on building a stable foundation before building new floors. Stop trying to get new customers if you’re neglecting your current ones 😉
Also published on Medium.