January 07, 2015

Quantity vs. Quality: Finding the Right Customers

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Before Contactually, I was running a software consulting firm. As we were starting to grow, a mentor gave me the sage advice that a great business is made by the clients you choose not to work with.




We designed Contactually from the ground up to be a user-centric company -- it's our very first core value. Most debates are usually capped off with deciding what is best for the user.




But that doesn't mean everyone should be a user of Contactually and this covers some of the basic criteria we look for in finding the right customers.






Examples of Criteria for Customers of Contactually



Need for Relationship Management



While everyone gives lip service to relationships being important, there's a subset of people that actually are at the top of their game or ambitious enough to practice good relationship management. There's a level of commitment necessary.


Habitual Commitment





Beyond desire, Contactually is a product that relies on habit. We regularly research how we can make our product easier to use, and have implemented numerous mechanisms to keep users engaged (the grade was not a "just for fun" invention!). That can only go so far -- the user has to be willing to invest the time repeatedly. Your gym may be fine with you paying and never showing up, but we aren't!


Time Investment



There's a level of time investment necessary. Contactually isn't a straightforward productivity tool that promises to shave hours off of your day. While we do that, our main focus is taking the time you'd be spending otherwise and making you more productive.


Basic Tech Savviness





As easy as our product is, there's a base level of tech savvy necessary. If you don't know how to turn on your computer, we may have a problem!




What happens if we have a customer that doesn't meet this criteria?




  1. Our sales team, if a user engages with them, will spend precious time on the phone trying to help coach on best practices, when they could be spending time focusing on users that would actually benefit from the advice.


  2. The customer may leave soon after upgrading -- that's churn. Too much churn makes a software business like ours look bad from the outside, which affects our ability to raise capital.


  3. Our rockstar support team may spend hours answering their issues, again, all for naught after a customer cancels.








Now you understand why some software business call these customers barnacles, and barnacles need to be scraped off the side of your beautiful ship!


Does that sound terrible? One of the basic tenets of sales is that not all leads are equal, and lead qualification is one of the core activities. Just as bad leads can sink a company, bad users could sink a company. Even though having a high quantity of customers sounds promising, finding the right customers is more important.


Think in your business -- be it a software, real estate brokerage, or DJ business -- who is your ideal customer, and who isn't?