Growing your Customer Base: Diehards and Newcomers
Last year I started going to this new shawarma place by my work – it was great, they took the time to ask for what you wanted, made it in front of you, the place was clean to eat in AND it tasted great. All my criteria were satisfied, we had found our new shawarma shop. Fast forward a few months and we went back to this restaurant, but things had changed, word of mouth got out; the place was full and the line-ups long. But I didn’t mind, it was worth the wait and it was great to see they were doing so well. I got in line, placed my order and then watched as my lunch was literally thrown together, food bits flying everywhere, slopped on my plate, gone were the smiles and pleasantries that used to thank me for my business and the tables were a mess to boot.
I didn’t go back to this place for another two months until I was coaxed by a friend. Lo and behold things had changed again, it was still busy as before (which is good) but the people that took the time to prepare your meal and thank you for your business were back and everything was clean. It was great to see, a complete 180. Last month a similar restaurant opened right near my office and we decided to try it out. The story starts the same way as the above and having gone there just last week they are in the same phase as that other restaurant where it is way too busy and now I am getting served cold food!
And the Growth Cycle repeats itself… but why?
What does all of this have to do with software? Easy, your customers operate on the same wavelength – they see your software (its new on the street), they give it a try and are wowed by it – simple to use, sexy interface, very stable – these people are your diehards, if they like it they’ll stay, if they don’t they’ll move on. Now, let’s say your product takes off (not necessarily overnight, could be a yearlong stretch) but you start seeing a ton of traffic and lots of orders coming in. You need those orders so you can keep the lights on (it’s been a long haul) and you NEED to keep your existing client base happy. So what do you do? You keep doing what you were doing that got you to where you are today. The newcomers are coming to you because of the great things they have heard from the diehards AND they want more (which is always the hardest part, because you have been waiting for so long for your newcomer base to grow that you want to keep that curve going, you’ll do anything. But you can’t, if you start implementing strategies that counter to what made you successful with the DieHards in the past (sexiness, stability, simplicity) both groups will suffer.
Software is a very fickle business, there are many different models out there now and even in the Enterprise space there is ALWAYS another option, yours is not the only one (Never forget this, Never write off your competition). So how do you get through this surge in customer growth? Innovate, change the way you are doing things so that both groups benefit. You cannot lose the diehards, these are the people that are most likely the active people on your forums that are actually assisting other users (decreasing your support costs), they are your most dedicated group of loyal testers as they are more than happy (and probably feel privileged) to be trialing your beta software. And lastly, they are the people that brought in the newcomers that led to your increase in business. But you can’t ignore the Newcomers, so you need to create some breathing space, keep in contact with them, slow down the delivery to the middle of the road where both are happy, add additional personnel to help you through the transition. In the end, the Newcomers are looking for the same innovation that the DieHards bought into when they signed on because at the end of the day…
The objective is to turn Newcomers into Diehards.
You want your newcomers to become diehards; you need to build the base. You can’t treat each group differently (think of those great Ford ads where the salesman treats the new customers differently than the old ones), if you treat them differently the newcomers are going to whine to the diehards and the diehards are going to think twice about recommending newcomers to you.
For that new shawarma place, I hope things work out, I hope they get back to doing what made them so good, but if they lose their DieHards they will have a much harder time doing this.
Two Steps to a Successful Online Community
Everywhere you look now you are signing up for a service somewhere that will lump you in with a bunch of other like-minded individuals. Eventually (or maybe right off the bat), tools will be released by the owners of the community that will allow you to meet and greet with other users to discuss the merits and/or pitfalls of said service. At this point of time a community has developed and you are part of it. Communities such as Facebook, LinkedIn, Twitter and Quora (to name a few) have evolved this concept to allow for more sharing of information between its users than ever before but it still doesn’t change the fact that IT IS a community of people. These are the success stories.
But what about the failures?
I use to belong to a community of comic book enthusiasts (yup that’s me, love them) where writers, artists, inkers, etc would get together to bat around ideas, blog about scripts and submit contest entries in the hopes of one day becoming published. We’ll call this community DM (not their real name); today it is on life support, the vibrant and once heavily populated community that use to exist is little more than last month’s blog entry.
At its height DM’s had a great concept – create a forum for writers and artists to meet and critique each other’s work. To sweeten the pot, they posted contests where they would provide editorial support for winners of said contests to have their ideas published in the form of an electronic comic book. What does everyone want? Feedback on how they are doing. The best part was that the winners were either completely chosen by the community and/or a combination of community and Industry Experts. I always worried that DM could not survive without a legitimate contest, but the community itself proved to be quite self-sufficient often developing their own ideas that went beyond the site, finding free tools for chat to allow members to better converse and/or writing/drawing work for other members without the dangling carrot in front of us. In short, the community got by with what they had.
So what went wrong?
Whether you have 100, 1,000 or 100,000 they are only two things that can go wrong in an online community; no listening and no communication.
Listening
Like any fresh site, DM listened and solicited feedback from its community in the early stages of growth. When the blog engine first launched it was alright, but when the upgrade was coming they solicited feedback (and acted on it) from the community before rolling out to everyone. That was cool, you got the whole “I’m part of something” feeling. Many times, community members wrote blogs (or directly messaged Admins) about updated community tools or suggestions for new features (over a reasonable period of time). In one case, when there was no response to the community, users gave up on the forums and secured their own IRC chat on another site so they could get to know each other better then was possible through the forums. The low point came last year when some spammers created their own accounts and started peppering the blogs with SPAM, making a mess of the blogs and for many being the final straw. Users were begging for the problem to be fixed (which was not difficult, it just took some focussed attention).
At the end of the day, if you want people to sign up to your community and invest their time (because they will) in your site, you better be prepared to listen to what they have to say and act on it.
Communication
When DM first started, every month I’d get an email from the Administrator telling me what was going on, what changes were coming, allay some worries of the community. Nothing huge, nothing fancy, BUT – it was enough to reel me back on if I had not been there for a while. It showed me what some of my “buddies” were up to, what was coming up and why I should get back in the game. It was email; it took traffic from inboxes and translated it into hits. And it was the medium that drove people to blogs on contests and changes. If even 100 people sign up to your site, they are doing it because they want to be a part of something, so talk to them and make them feel like they are part of something. An email is not complicated, you can craft something decent in 20 minutes, want to get it reviewed and put some fancy graphics on it, okay 2 hours, over a period of a month… its pocket change.
Listening and Communication, not back-end servers, not redundancy and failover, not PHP vs .NET, not MySQL vs SQL that is what creates and drives a successful online community. So if you’re going to build one, focus on those two concepts, everything else will fall into place from there.
Building Great Customer Relationships
The roles have been reversed and I am the customer. I'm going through a renovation to my house right now. I'm not managing the project, I'm not coordinating users, I'm asking questions, trying to learn the process and paying for work being done.
I am the customer and its a wierd feeling. I feel control slipping away from me.
For the most part, its been pretty smooth but I'm finding myself drawing parallels between my own experiences in working directly with customers and wondering how you get to that really great customer/developer relationship we all yearn for. Here are my thoughts;
Expectations - What are they? Do you have any? Does your customer have any? How do you know if you don't ask? They won't just come and tell you so first off, you need to set the bar - what do you expect from your customer, what do they expect from you (if you think of about, this is really what should be in those Terms and Conditions that you check that box to on every website all the time). This goes beyond the contract you sign, set the paperwork assign and talk to them, really figure out what they need and want and key in on what is going to be important to them in the project.
Communication - Who is in charge? What happens when an issue arises? Is it on Email? Phone? Twitter? What? Make it easy for your customer to reach you. I'm not advocating for giving out your cellphone, but let them know who they can contact, when and how. Are you a big company? Don't design some complicated IVR (Interactive Voice Response) System that is so confusing the guy who programs can't even understand it. The absolute worst, WORST thing you can do is ask for a customer to provide you information via one Medium (Email, IVR, Twitter) and than when you speak to them ask them for all that information all over again. This shows you didn't listen. They played your game, gave you their info, now you need to show that you listened and move the ball forward.
Integrity - I'm sorry, but its not all about Dollars and Cents. I've taken many a custom development gig and done more than what was quoted in the project (not to the point of being obscene losses and hemoraging money) but it was work I could have charged for. I looked at the bigger picture, will they stay on, could they be a long-term customer, will they recommend me to another potential client, is this a matter of pride that I want to do this job right? In most cases I would say it was the latter, I take pride in my work, and want my customers to be impressed with the job I have done for them. And at the same time I can't leave a job done in a poor state and won't ship a half-assed product to a customer. The little things always, always stand out in people's minds - building a massive "Enterprisey" application was delivered and it works, but it actual makes the user's job 5x harder because the UI doesn't scale properly.
Expectations, Communication, Integrity - that sets the bar to create a great relationship with you and your customers and keep them coming back for more.