Regardless of what industry you are in, your customers are the most important aspect of your business. It is why you do what you do and the reason for your existence. The products, services and business value propositions your company provides are for customers and without foundational, lighthouse, flagship ones you’ll never scale.
In order to make sure your business is rock-solid before you double down to scale your startup, you need committed and loyal customers firmly in your tribe. Sure, the value of these engagements will provide you with a strong recurring revenue base that renews and expands, but more critical is how they also legitimize and evangelize your amazingness to others. I like to call these customers “strategic customers” and they are the lifeblood of any startup. A strategic customer is one who adds immense and diverse worth to your company (product, market and engagement feedback etc.) and will be your biggest advocate to the rest of the world (sing your praises from the rooftops, etc). They should be a sounding board and a launching pad when done right.
The Definition of a Strategic Customer
The definition of what makes a quality strategic customer can best be illustrated using a triangle view. I often call this the ‘Strategic Customer Trifecta.’
- The first point of the triangle is a brand we all know. You need a name brand you can market around that everyone has heard of, respects and wants to emulate.
- The next point is a company that is paying you real money for your service. You need a company that is paying you consistently at or above your expected average selling price. Too many companies give their products away just for a logo with no real revenue too.
- The third point is that they find strategic value in the capabilities you offer or said another way, they deeply engage with the product, need it, provide feedback, and see true business value for your solution with a proven and obvious ROI.
Why Strategic Customers Are Necessary for Startups
Strategic customers will become your referenceable customers if you focus your energy there as a founder or leader. These accounts need executive sponsorship and need to know they are appreciated, consistently, which gets increasingly difficult as you add more of them. They’ll reciprocate the love, I promise, and your business will soar. Remember, people buy from people they like and they keep doing businesses with companies they enjoy working with.
Strategic customers become the repeatability foundation you seek in other customers as you grow and define your go-to-market (GTM) motion. These customers will not only allow you to put a company logo on your webpage, but also will help attract new customers for you through their likeness and network. Referenceable customers will sit on your customer advisory boards, engage in prospect calls, take part in webinars, provide guest content, and collaborate with you and the company on co-marketing strategies. They’ll be your best eyes and ears to the market and provide invaluable insights on your competition while driving your product roadmap forward. You simply won’t scale without them, but you must create programs to stay engaged.
It can be hard landing and nurturing customers that fit in this trifecta model who check off all three points. They also aren’t the easiest customers as they can be the most demanding (rightfully so!). You may have a customer from a prominent brand who sees value in your capabilities but doesn’t pay you the appropriate corresponding amount. You also can get paid well, but can be viewed as a “nice to have” and not a “need to have” by the customer. You may also make a lot of money from clients no one has heard of or who won’t let you talk about them. It’s the trifecta that is the holy grail. Once you have it across a stable of great strategic customers, it’s time to hit the market hard and scale on their backs.
With that said, and if you’re struggling finding your footing, do not give up searching for strategic customers (you can never have enough!) because once you nail the trifecta and build your GTM strategy to support them, make it repeatable across market segments and industry verticals, and engage and empower them, your company will take off!