Monday, January 28, 2008

Design the Perfect Customer

Complete this sentence: “My perfect customer is (fill in the bank) and spends gobs of money with me.” The right time to begin imagining your perfect customer is before you have any. Right now, you may define your ideal customer as anyone who is willing to pay you, which means you haven’t established many standards. It’s possible that some customers will actually be more trouble than they’re worth, no matter how much they pay. If you spend a little time now imagining your best customers, you can better identify them when they come along. Better yet, you can avoid the ones who don’t meet enough of your criteria.


Because your shriveling bank account is ever on your mind in the early going, it’s natural to accept and hang on to customers even if the hassles they create seem to outweigh their benefits. You’ll say to yourself, “We can stomach them as long as they pay.” Just don’t stomach them too long if they distract you from getting better customers.

Put your business plan to work
Your company’s business plan is supposed to serve a greater purpose than to help you obtain funding. It is supposed to serve as your road map to success, which should involve finding a paying customer or two. Take a fresh approach to your plan and begin to flesh out the description of your target customers. How would you define your ideal client? Even if you’ve never sold anything before, somewhere in your life you have had customer-vendor relationships, even if it goes back to selling lemonade when you were ten years old. Picture in your mind the best customer you’ve ever had and try to remember what made him so great to work with:

- Did he pay his bills on time?
- Did he trust that you knew what you were doing?
- Did he have the confidence of his boss, or was he the boss?
- Did he acknowledge the times you went to extraordinary measures to meet his needs and demands?
- Did you hurry to pick up the phone when you knew he was on hold?
- Would you find him likeable even if he weren’t helping to pay your mortgage?

Maybe it’s easier to form a picture of the worst customer and then to avoid him:
- Did your worst customer think he could do your job better than you could? (Makes you wonder why he was spending good money for your help.)
- Did you sometimes get the sense that you were talking to a brick wall, as if the words that came out of your mouth were not making it past the customer’s glazed look?
- Did he often seem unhappy with your work, even though he could never adequately explain why?
- Did he end the relationship with the equivalent of the boyfriend-girlfriend breakup: “It’s not you. It’s me”?

With such questions in mind, you can begin to look for important signs from prospects, such as:
- Does she clearly express her expectations?
- Does she answer your questions with, “Uh, let me think about that” or “you figure it out?”
- Does she recall promises you’re pretty sure you never made?
- Does she give a realistic timeline for you to develop a proposal or presentation on your product/service?
- Does she listen when you speak?
- Does she “get it” when you talk about your product/service?
- If you are not dealing with the top dog, do you sense that your prospect has the ear and the confidence of her boss?

Most customers will fall someplace in between the ideal and the worst case. Don't be ultra-selective when you are trying to sign up a customer—any customer. However, it would help if avoid a bad one as your first customer since you will have your hands full as it is. You should try to identify prospects who will help you validate your decision to give up the finer things in life like premium cable just so you could start your own company. It’s easier to cut someone loose when they’re a prospect than when they are already your customer.

As you begin to develop your customer base, you can periodically return to your list of ideal-customer characteristics. If you’re lucky, you may have one of two customers that come close to your ideal early on. Possibly, the concept of the perfect customer that you develop will change a lot once you have a few clients under your belt.

Don’t ask; don’t tell

Imagine that you are firmly ensconced in the prospect’s rust-colored vinyl visitor’s chair (design circa 1972) after having spent the past 30 minutes deftly explaining how wonderful your stuff is. By asking intelligent questions, you have collected a lot of good information to help capture the customer. You have also demonstrated a good understanding of the prospect’s challenges, answered her questions sufficiently, and have begun to develop a nice rapport. This could be the one, you think—the first customer. Then, just as you are putting your notes back in your genuine faux leather briefcase and discussing a follow-up appointment to go over the details of the multi-million dollar agreement, she asks, “How many customers do you have?”


You pause for a second, looking at the prospect as if the issue had never occurred to you. You respond with something like, “ “None, yet. So, you’ll have our full attention. And I won’t have to go through 27 layers of management to get things done on your behalf.” You have just answered the question succinctly and reinforced it as a positive. Then you say, “Now, about that follow up appointment. How about next Wednesday?”

You may be surprised how seldom prospects ask about your company’s size and background. They are more interested in what you can do than how big you are. Should the question arise, try to emanate confidence that the size of your company matters only in that you will be ultra-responsive to the prospect when she becomes a customer. Your prospect will be more inclined to share your confidence at a result.

In cops and lawyers shows on TV, the hotshot attorney always prepares his witness by saying,
“Just answer the question. Never offer any more information than you have to.” You can use the same approach when the “How many customers do you have” question arises. Answer the question and then direct the conversation toward more important stuff.

This is the more important stuff: When you tell the prospect that she would be your first customer, make her feel comfortable about it. Let her see your confidence.

You: I will be just as dependable as anybody else you might choose as your provider for this service. In fact, I will be more reliable.”

Your prospect: Really? How so?

You: When I go to bed at night, I will dream about how my company can address your needs. I will think about it last thing at the end of the day and first thing in the morning, too. Now tell me more about your expectations so that I can explain how we will meet them…

Your prospect: That’s not necessary. You’ve dazzled me with your sincerity. Let me get my pen so that I can sign this agreement. In fact, I think I’ll take two of what you’re selling.

OK, it may not go exactly that way, but just because a prospect asks you how many customers you have doesn’t necessarily mean it is big issue for her. A prospect may be simply running through a mental list of questions she would normally ask in trying to separate the pretenders from the real thing. (Remember, you’re the real thing.) It’s also possible, if she’s not the ultimate decision maker, that she’s anticipating what her boss will ask her. She may have already made up her mind, and she’s ready to go to bat for you. Or, perhaps, she’s just leading up to what she feels are more important questions. Whether you have one or 100 customers wouldn’t break or seal the deal in her mind. It may just be one item in a litany of things she wants to note. If a prospect wants badly enough to buy what you have, she may even help you along in providing the right reasons to make it a smart decision.

If your lack of customers makes her decision a questionable move, she may probe further until she finds sufficient justification. Perhaps the newness of your company will be a bigger deal to you than it will be to her. Should such details be a concern to the prospect, however, they will probably come up relatively early in the conversation, which gives you plenty of time to address them.

In your company’s early days, you may occasionally have conversations like this one:

Prospect: How many employees work specifically on making improvements to your product?

You: One, give or take.

Prospect: Just one? Small companies make me a little nervous.

You: First, let me show you how the product works. If you think it offers a solution to your needs, I would like to discuss further how my company’s size could be your advantage.

Prospect: OK.

After the prospect sees the product, you can anticipate one of two results:
1) The prospect will worry less about the size of your staff because he really likes the product.
2) He wasn’t very impressed by what he saw, and so the size of your company would not matter anyway. His feelings about the actual product ultimately mattered more than the number of people working on it.

The prospect may not care so much if you have one or more persons working on a job, as long as you can demonstrate good results. You can devise ways to prove that the smallness of your company is no liability.

Tuesday, January 22, 2008

Breaking the news that you’re new

Now that you’ve begun to warm to the idea (I hope) that having no customers will not prevent you from lining up a few, you have to prepare yourself to share that fact with your prospects. I suggest two honest ways of addressing your newness. One is rather low-key and the other is head-on.

The pre-emptive strike
What if you told the prospect up front that you had no customers? Would the world suddenly come to an end? Would the prospect abruptly end the conversation and summon a couple of 300-pound security goons to remove you from his office? Would you be so embarrassed by your admission that you would suddenly shrink to the size of a bug and scurry away? Nine out of ten times or more, no physical harm would come to you. You would survive. If a prospect were to end the discussion immediately, that would just give you more time to find a more suitable prospect.

It's likely your prospect, unless it’s his first day on the job, will have encountered new companies before. You will not be forging new ground in that regard. Certainly, some companies will think twice about doing business with you because you have no customers. In fact, there will always be plenty of people who don’t want to be your first customer, and for a multitude of reasons.
Your newness may be low on the list. It may not be on the list at all. There is no need to imagine obstacles to the sale when plenty of real ones already exist. You also don’t need to carry the fact of your newness around like a deep family secret, particularly if you do not know how the prospect will react.

This does not mean that you must stride into your prospect’s office with your jaw set tight and, even before shaking his hand, say, “I’m the only guy who works for the company. I have no customers. You would be my first. What do you think about that, Mister?” No need for True Confessions. However, if you regard your newness and eagerness as advantages (they really can be), then consider making those qualities part of your marketing strategy. If you think your newness will be an issue, get in front of it before it gets in front of you and blocks the prospect from seeing your many qualities.

Position yourself on your web site, literature and other marketing vehicles as a new, different kind of company. When you make an introductory call, you might start with, “I’m Reginald Rookie with Fresh Off The Farm Technologies. We formed out company to distribute an exciting new cure for eyebrow baldness…” Then you’re on your way without causing the world to end. As the prospect listens to you from that point forward, words liked “innovative” and “fresh ideas” will float around the back of his mind because you put them there.

When you say, “We are a new company,” you are not admitting to something. You’re simply stating a fact. Even better, you are stating an advantage. You are using it as a selling point. In the case of your company, newness is synonymous with innovation and flexibility. You are a company with a fresh approach to a particular product or service. Or maybe your product or service didn’t even exist until you thought of it. You are starting a company because you identified a need that no one else is meeting quite the way you can. You are so passionate about the wonderful world of widgets and solving age-old widget problems that no other company but your own could contain your ideas and energy. That is a heckuva marketing differentiator.

Let’s say you detect a bit of concern by the prospect regarding your newness. Acknowledge her anxiety and then suggest ways to alleviate it. For example, you can take small steps in the first stages of your relationship that give her chances to opt out before her budget or image take a big hit. You’ll never let your relationship get to that point, but you can provide the prospect a little peace of mind:

You: Two weeks from today, I will present detailed plans showing how we will double your magna-diode output. The plans represent ten percent of the first year cost of our program.

Your prospect: What if I don’t like the plan.

You: I’m confident you’ll love the plan, but we would welcome your revisions. If it happens that we can’t please you, however, you won’t owe us anything beyond the first ten percent of the program.

Your prospect: Let’s say I approve the plan. What happens next?

You: You’ll get to sign off on every stage of the process. You can tell us to take a hike at any time before we make a full commitment to each other.

Your prospect: You are an incredible company. I think I love you.

Next time, we'll talk about the Don't-ask-don't-tell approach.

Monday, January 14, 2008

Compelling Reason #2: Your First Customer

Because I lack the ability to see into the future, I can tell you little about your first customer, except this: She is no dummy. Let’s say you are introducing the shiny new ultra-sleek TrashSmasher 3000, which competes directly with the well-known but less-sophisticated TrashCrumpler made by Humongous Conglomerate, Incorporated (popularly known as Humco, Inc.). Your first customer knows you will treat her as though she is the only customer in the world, because that's what she'll be for a while. If she has a problem, you will address it before her phone hits the receiver. Conversely, she knows that the highfalutin powers-that-be at Humco, Inc. will respond to her requests at a glacial pace. That gives you an advantage. And she knows your advantage is to her advantage.

Your soon-to-be first customer wants you to succeed, partly for business reasons, because you can make her look good to her boss or customers. But she also wants to see you succeed for emotional reasons. Everybody wants the chance to say, “I gave that successful guy his first break.” Everybody likes to pull for the little guy. Right now, there is nobody smaller than you. If you establish a good relationship with a prospect-cum-customer, she will root for you to become the best in your industry. She will say that she knew you back when, and that she was prescient enough to take a chance on you.

The day your first customer chooses to do business with you will be the luckiest day of her life, because you will treat her like the center of the universe. You will name your first child after her, even if your child is already in college. You will speak dreamingly of her to your spouse or to your pet. You will love your first customer as you have loved no near stranger before. She knows it.

Realize your advantages
To say you can use your size and newness to your advantage is not just a bunch of hooey. You really do have advantages. Let’s say your first customer calls you with a problem. How long would it take for you to respond? A split second? Less? Think how many times you’ve called someone, as a customer, and waited for what seemed like an eternity for someone to get back to you. You are resolved not to let that happen to your prospects and customers. You are going to do things the right way. Express that resolve to your soon-to-be first customer at every opportunity.

Tuesday, January 1, 2008

Compelling Reason #1 that Being a New Business is an Asset: You

Your main advantage over your competitors—an asset they can never offer—is YOU. You’re not starting a company because you want to be second best. You're doing it because of something that distinguishes you from any other venture in your industry. Maybe you have a great idea. Or maybe you know how to provide a particular product or service in a way no one else is. It may be that your experience or level of expertise is unique. Perhaps you have a knack for finding solutions to tough problems.

Was your previous employer getting the job done the way you knew it should be? Perhaps you were the reason your previous employer was successful. Maybe you left your former company just so you could build a better mousetrap. And now here you are, ready to show your future customers how to catch mice. Perhaps you have lots of great ideas about how to better serve customers, ideas that languished at your old company because they had to be filtered through too many levels of bureaucracy filled with people who lacked your vision. Unless you have a lot of split personalities, your ideas will get implemented in warp time at your new company. Whatever your reason for going into business, it should make a compelling story for your prospects. One of your first jobs is to identify that story to help you turn a prospect into your first customer.

Even when your business is 20 years old and you are able to take three-week vacations to Acapulco, one thing will never change: Your new customers will buy you more than they will buy the thing you're selling. All the gadgets and gizmos in the world will not make them want to do business with you if they don't think they can count on you. You will convince them that you can listen and react to their needs in a timely fashion. They know you will pay attention.
You are selling them a relationship with you. Sure, it sounds like a cliché, but it’s true. Even if you are the sum total of your company, you amount to a lot. You are the most important part of your company. Embrace that fact even if you set up shop in your utility shed and use the riding lawn mower as your conference table.

If honesty isn’t the best policy, it is a close second.

OK, I lied. Honesty is the best policy when you try to land your first customer. Telling the truth may seem like such a simple thing, but it's often overlooked. You’ll hear lots of advice about working hard, working smart, never giving up, and so on. But a commitment to the truth often gets left out.

We all want to be truthful in our business, but honesty can become an early casualty as we try to persuade a teetering prospect to commit. We start hedging the length of time we’ve been in business. We count our spouse and children as staff. We include the UPS guy as an employee. We set steaming mugs of coffee at empty desks when visitors come. We suddenly have phantom customers. I mention honesty at the beginning of this blog for a good reason. The integrity of your venture will color everything else you do. If that’s not enough reason, truthfulness can also help you land Customer #1.

Before you call on your first prospect, make a pact with yourself to accurately represent the depth of your company. This does not mean you have to loop a sign around your neck that says “We are a tiny company.” In fact, you should always present your story in the best possible light. The best possible light is the truth: You’re new and you’re small. Being a small, new company does not have to be a liability. More than a half million new businesses open their doors each year in America. If the rest of us were afraid to become their customers, commerce in this country would grind to a halt.

If you convince yourself that your company’s size is one of its strengths, and in fact may be one of your greatest assets, many of your prospects will believe it, too. No, not all prospects will want to do business with a company that's just two minutes old, but many will be open to it. And why not? By golly, your size is your strength. If you need convincing, I can give you two compelling reasons without having met you. More on that next time.