How to Build Customer Connections When Starting Out

Paul Graham, best known as the founder of Y-Combinator, wrote a famous essay called “Do Things That Don’t Scale”.

According to him, contrary to the popular belief that startups either take off or they don’t, they take off because their founders make them take off. How? By doing things that don’t scale.

We would argue that this applies not just to startups but to new businesses in general, especially to the companies that sell products or services that already have a proven demand.

If there are businesses out there that are doing what you want to do, then it’s not a question of whether it’s possible to make it work, it’s a question of whether you will make it work.

Forget about “automation”, “building systems” and “scaling”. If you want to get your business off the ground, you need to be willing to do things that don’t scale.

Here are the nine best ways to build customer relationships in the early business stages…

#1: Acquire Customers Manually

In his essay, Graham explains that the most common unscalable thing that startup founders have to do is recruit users manually.

He provides several examples:

• Stripe founders would recruit users at Y-Combinator events
• Airbnb founders would recruit users by going door to door in New York
• Pinterest co-founder would recruit users at design conferences

Graham argues that one of the reasons why founders resist this approach is a combination of shyness and laziness.

They’d rather sit at home writing code than go where potential customers are, pitch their products to them, and get rejected by most of them.

Another reason is that they underestimate the power of compound growth: the numbers are so small at first that recruiting users manually doesn’t really seem worth the effort.

However, at Y-Combinator, Graham and his colleagues encourage startup founders to focus on the weekly growth rate as opposed to the absolute numbers.

If a startup grows by 10% each week, at first it may not seem like a big deal. Going from 100 users to 110 users is nothing to write home about.

However, if the founders can maintain that 10% weekly growth rate, they’ll have 14,000 users after a year. Now that is a big deal!

Graham’s target audience is startup founders but we would argue that his advice on acquiring customers manually can work well for all kinds of businesses.

In fact, depending on what you are selling, going door to door, attending industry events, and doing cold outreach may be the fastest way to get your business off the ground, especially if you can’t afford to spend money on ads!

#2: Be Social on Social Media

Typically, entrepreneurs who want to build a social media following understand that they need to publish high-quality content every day, though they might struggle with staying consistent.

However, they tend to overlook the importance of interacting with their followers and networking with larger accounts because that is something that takes time, cannot be automated, and doesn’t scale.

But you can’t expect to build a following on social media if you aren’t willing to actually be social on it!

What we recommend is setting aside time every day – maybe half an hour, maybe an hour – to just hang out on your chosen platform and interact with people there.

First of all, if someone leaves a comment under one of your posts or sends you a DM, you should reply to it unless that person is a troll, in which case you should block them.

In addition to that, you want to use the search function and popular hashtags to find posts relevant to your niche and leave thoughtful comments that add value to the conversation.

Finally, make sure to follow the main influencers in your niche, leave thoughtful comments under their posts, and share their content with your followers.

Hopefully, they will notice you eventually, follow you back, and start occasionally sharing your content with their followers.

We would like to point out that there’s this weird cargo cult thinking that entrepreneurs sometimes fall into:

They see that influencers with massive followings don’t interact with other people much on social media and somehow come to the conclusion that acting similarly aloof will help them build a massive following as well.

Presumably, it’s an attempt to game social dynamics with the hope that acting the same way as high-status individuals will increase their own perceived status.

But the problem with this line of reasoning is that everyone can see that you have 87 followers. If you ignore comments and DMs, you won’t come across as having a high status, you will come across as arrogant. What a great way to alienate potential customers!

We recommend being generous with your time instead. If someone sends you a DM with a question that relates to your area of expertise, hop on a call with them and help them solve that problem for free. What do you have to lose?

Remember, the more free value you provide, the more trust and goodwill you are going to build and the easier it will be for you to convert social media followers into paying customers!

#3: Offer a Free Service as Your Lead Magnet

Lead magnets are freebies that you offer to potential customers in exchange for their email addresses.

Typically, businesses use digital lead magnets such as free reports, eBooks, and online courses because that makes it easy to scale lead generation.

However, if you are just starting out, we recommend offering a free service instead because people tend to see services as more valuable than info products.

Here are some ideas:

Lead Magnet for a Service Business

If you are providing services, you can offer a setup service for free and then sell a core service package.

For example, if you are a personal trainer, you can offer potential customers a free consultation + a custom workout program and then sell them a 3-month coaching package.

Lead Magnet for an Ecommerce Business

If you are selling physical goods, you can offer a free consultation where you help customers choose the right products.

For example, if you have a clothing store, you can offer a free style consultation and help customers put together an outfit.

Lead Magnet for a Software Business

If you are selling software, you can offer a free consultation where you help potential customers create a strategy for getting the results that they want and then sell them your software so that they can implement that strategy.

For example, if you run an email marketing startup, you can help potential customers create an email marketing strategy that they can then implement using your software.

Yes, this approach to lead magnets is time-consuming, requires a ton of work, and doesn’t scale.

But the more valuable your free offer, the more leads you are going to generate and the more sales you are going to make.

And what can be more valuable than working with potential customers one-on-one to help them solve problems that they are struggling with?

#4: Personally Welcome New Customers

The exact way this is going to look will depend on your business model but the key here is to make new customers feel appreciated.

For example, in his essay, Graham mentions that Wufoo sent every new user a handwritten thank you note for as long as they could.

Simple gestures like that can do wonders for customer retention!

#5: Personally Onboard New Customers

You might learn that some people who are interested in your product or service don’t have the mental bandwidth to set everything up so that they can start using it.

There’s an easy solution to this: simply set up everything for them so that they won’t have to worry about it!

For example, in his essay, Graham mentions how the founders of Airbnb would help their users take photos of their properties.

Meanwhile, Stripe founders would ask their fellow entrepreneurs at startup events if they would like to try a beta version of Stripe.

If the answer was “yes”, the founders would ask for their laptops and set up Stripe accounts for them then and there. Apparently, this approach came to be known as the “Collinson installation”.

Sure, this approach to onboarding isn’t scalable, but it can help you get your first customers. After all, it worked for Airbnb and Stripe!

#6: Send Your Customers Progress Reports

Once you are done with the onboarding, make sure to send your customers regular progress reports.

Here are some ideas:

• If you provide services, keep your customers updated every step of the way so that they would know what’s going on at all times.
• If you sell coaching, send your customers monthly reports that showcase the progress that they have made toward the results that they want.
• If you sell software, send them monthly reports that showcase the results that they have achieved with your software.
• If you sell online courses, send them weekly reports that showcase how much progress they have made towards completing the course.
• If you run an e-commerce store, let the customers know that you have received their order, prepared it for shipping, shipped it, etc. Send them an email at each step.

These reports can be automated but we recommend doing them manually at first because that can help you better understand your customers, spot various issues that need to be addressed and streamline your business processes.

Keep in mind that people tend to be wary of new companies that lack social proof so if they don’t hear from you immediately after buying your product or service, they might get sketched out and ask for a refund.

That’s why it’s better to err on the side of overcommunicating rather than undercommunicating!

#7: Reach Out to Inactive Customers

If you sell subscriptions of any kind, you will notice that when some customers stop using your product or service, they don’t cancel their subscriptions.

You have two options when it comes to these inactive customers:

1. Let them continue paying the subscription despite the fact that they are not using your product or service.
2. Reach out to them, say that you have noticed that they are not using your product or service, and ask them if there’s anything you can help them with. Also, offer to cancel their subscription if they are not getting value out of it anymore.

It’s probably safe to say that most subscription businesses choose the former option because it makes more sense financially, at least from the short-term perspective.

However, we would argue that from the long-term perspective, you’d be better off going with the latter option because that will help you build goodwill with your customers.

It might turn out that there’s some problem that you can help them fix, or maybe they want to pause their subscription temporarily, or maybe they would like to cancel it altogether.

Whatever the case may be, the fact that you brought this to their attention will leave a good impression because no one likes finding some long-forgotten subscription on their bank statement!

#8: Do Customer Support Yourself

Business owners tend to hire a customer support representative or outsource customer support to an agency as soon as they can afford to.

But we want to encourage you to do customer support yourself for as long as you possibly can. Why?

Because handling support tickets can give you ground-level insights on what needs to be improved to make your product or service better.

Plus, nowadays people are so used to dealing with chatbots that merely getting a reply from a human can be a pleasant surprise, so you as the business owner answering customer support queries yourself is a surefire way to leave a good impression!

#9: Conduct Customer Exit Interviews

Finally, if you have a subscription business, churn is inevitable. It doesn’t matter how amazing your product or service is, some people are going to cancel their subscriptions.

We recommend reaching out to the customers who churn and asking them for feedback on what your company could be doing better.

If they send you some feedback, here’s what you want to do next:

1. Thank them for their feedback and tell them that you would love to hear more.
2. Ask them if they would be willing to hop on a 15-minute call with you.
3. Send them a link to your calendar so that they can book the call at a time that’s most convenient for them.

People want to feel heard so getting customers to agree to do exit interviews might be easier than you think.

After the interview, give them a discount code in case they ever decide to come back, and wish them all the best.

Also, if they mention something specific that they want you to address, make sure to let them know once you do.

This will show them that you took their feedback seriously and left a good impression, increasing the likelihood of them coming back!

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