In Market Discovery, Market Research, Marketing, Sales, Startup Management

When I work with a new product or service I generally need market feedback, and one of the best ways of getting this is to go out and talk to people.  Often, I get positive feedback from them, and many of them will ask me to come back and give them more information, do a demo, eventually even run a pilot project.  Some of the people I meet will always be Uncustomers.  They will give you a lot of their time, may give invaluable feedback, and will be delighted with the attention you give them.

Uncustomers also have a darker side: they will never, ever pay for my product or service.

Here is the letter that an uncustomer might write if I could lace his or her coffee with truth serum…

Dear Founder,

When we first met a few months ago I was blown away by your product, which is why I got you to come back in and do a full demo.  The pilot project we ran after that has been an unqualified success, and has really helped me to deliver on my current project.  I am really grateful for all the time that you and the engineering team put into it.  I appreciate that you keep calling me, in fact your persistence is truly impressive. Let me explain why I haven’t called you back.

We’ve been doing things the way we are doing them now for a long time, and it’s worked out OK for me.  Sure, I know things could be better, but I still have a job and we’re making money.  I like your idea, I really do, but changing things is always a journey into the unknown, and what if something goes wrong? 

Even if I wanted to bring you in for something a bit bigger, you’re not on our preferred supplier list and purchasing always try to make me buy from a current supplier.  It would take months to get you into the system and even then it’s going to be a struggle because they like us to buy from Fortune 500 companies.  Plus they are going to argue about the price, which will make me feel bad because I said your price was OK before.

I can’t be sure your product is going to work with a bigger project anyway, or how well, until you’ve done the customisation work for our environment.  I know the pilot went well, but in a bigger project it’s going to look pretty bad on me if it doesn’t work whereas I inherited the current situation so I don’t get any blame for it. 

Actually, I owe you a pint next time in town because I talked to our current supplier about your solution and it convinced him to give us a discount – my boss is really pleased!

Thank you for your time, and I really think your product is great. I’ve had a lot of fun working with you, but I’m done now.

All the best,

An Uncustomer.

Sadly, very few uncustomers will ever write a letter like this, and even if they do eventually say some of these things, it is often only after weeks or months of work has gone into developing a relationship with them.

Most business plans anticipate the people that engage early and run pilot projects will turn into lead customers.  Very often a further tranche or new round of investment depends on this – and thus the future of the company does too.

When I am going to to find people to talk to, I try to be very clear on my objectives.  These usually fall into one of three categories:

a) Seeking Feedback

Sometimes I am looking for people in industry to tell me if the idea I am working with is good, and to help me refine it.  If this is the case, I am happy with the help of anyone with the relevant knowledge and experience.  This includes uncustomers.

b) Seeking Customers

If what I am really looking for is customers then, however friendly and helpful contacts might be, I work to qualify them as best I can.  There are plenty of frameworks out there for qualification of sales leads, and one of the simplest is “BANT”:

  • Budget: Does the person you are talking to have the budget to buy your product or service?  If not, who does, and are they involved in the project at all?  When might the budget become available?
  • Authority: Does the person you are talking to have the authority to buy your product?  Again, if not, who does?  What conditions would we have to meet to get them to exercise that authority and make a purchase?
  • Need: Change is risky.  Buying from a startup is risky.  Do they NEED your product?  Does it solve a problem they lie awake at night worrying about?
  • Timescale: When will they buy?  Is their timescale compatible with what you are looking for?

Here are a some warning signs that might point toward your contact being an uncustomer:

  • They are the only person you have contact with at the organisation.
  • They won’t introduce you to budget holders or those in authority “until the right time” with no committment on when that might be (or what conditions must be met).
  • You can’t get an NDA or license agreement of any sort signed because “it’s too hard to deal with legal”.
  • They talk about grand future plans to roll out your offering to the whole company, but won’t talk about budget or timescale.
  • Ask them if they are looking at other ways of addressing the problem your product or service solves.  If they aren’t looking at other solutions, they may not be serious about solving the problem.

c) Seeking feedback then customers 

This is the situation I usually find myself in.  The feedback stage is a great time to work on qualification to identify who the real potential customers are, but it can be really painful to “drop” a contact who has been helpful even if they are obviously an uncustomer.  I find it much easier if I have known all along this is the plan, and set appropriate expectations with them so they are not surprised or upset.  To do that, I need to qualify early, and by maintining a good relationship the “uncustomer” can be a “future customer” rather than a dead end. 

 

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