As fifth employee and head of Customer Success in my previous startup, I learned a few tips about growing a company and making customers happy, while keeping everyone's sanity. The story I'm sharing isn't about all the perfect things we did to grow the startup from seed stage to 60+ employee Series B (it was far from perfect); this article focuses on lessons learned from what brought our team to its knees, and how we adjusted our strategy to scale our growth. I will share my experience in a two-part series on how to bend over backwards for customers without breaking your back.
Never work for free
While this seems like a no-brainer to grow business revenue, we were actually giving out free pilots left and right during our early days. As a small startup focusing on growth, we thought about ways to get more customers using our product. While giving out the software for free was great to get product feedback, it was terrible to get customers. Hence, pricing had been something we always talked about even during later stages of the company: Should the pilots be free? Are we charging too much? Can we raise our price during renewal?"Free pilot" seemed like a great idea to lower the barrier for our prospects to try our product risk-free; however, there were strings attached. The obvious disadvantage of free is the fact that we were actually working for free - burning the hard-raised money from our investors. We justified it as an investment and put in a ton of time to make the free pilots successful, in hopes they would convert to real customers. Who doesn't love free product? Assuming the chances of customers buying after the pilot is the same despite free or paid, we were willing make them free in order to lower their barrier of entry to try our product. The result? Total disaster.Looking back and summing up all the free pilots we did, none of them converted. On the contrary, our most successful pilots were all paid ones, and the chances of conversion was much higher as well. The main reason why "free" was terrible for both us and the customer was that we blindly assumed all customers love free products. "Free" basically meant that customers were actually not committed to spend the time and resources to make the pilot successful. "Free" also meant that they didn't perceive our product as something valuable. In fact, it almost felt like they were forced into trying our product, because it was "free anyway". And for us, spending a lot of endless nights at work without much appreciation was a counter-productive effort.
It's okay to ask dumb questions
Building a relationship with customers require open and frequent communication. What may seem like "dumb" questions could potentially be eye-opening. Below are some examples:
- What do you want to get out of our product?
- Can you clarify how you're currently doing [something painful that you're trying to solve]
- Who is the solution for?
These questions may seem "dumb" at first because you know exactly the answers to them, which is why your customers bought your solution in the first place. But no, do not assuming anything until you get clear answers from them.One mistake we made early on during our customer onboarding process was that we did everything for the customers without asking for clarifications or feedback; not that we assumed we knew what the customers wanted, but our thought was that taking up customer's time meant our product wasn't as easy to setup as we pitched it. I remember there were a few occasions which the audience were executives from a specific department. Even though we had a good idea what they'd like to see, the demo actually turned into a completely different conversation about an use case we had never thought of. Lesson learned here was that it was okay to ask for clarification and frequent feedback. Remember that customers want to be successful with their investment, and it goes without saying that delivering a targeted solution is much better than presenting something that the customers don't care about.This customer journey also has the IKEA effect, which states that "consumers place a disproportionately high value on products they partially created." From my experience, all of the customers who invested time and resources helping us help them had been successful. The fact that the customers were willing to spend time and money on the pilot meant that they were serious about building a relationship together.Do these lined up with your experiences? I'd love to hear other stories, and share more about my experience growing the Customer Success team in the previous startup. Stay tuned for part 2!