How does a startup win its first customers?

Barbers in England reopen 12 April. I am starting to resemble an old English sheepdog. Two weeks to go. But should I get my haircut at the new barber in town, or stick with my existing bloke, who’s done a decent job for many years? Tried and tested, traditional barber’s shop, good chat and a decent brew, or time to switch and see if there’s something new and different on offer?

How can the new barber attract me away from my long-time relationship? This is the challenge all startups face, how to attract those early customers.

The new place has opened in the old fruit & veg shop on the high street. Nice job they’ve done on the refit, polished wooden floors, modern sinks, trendy lighting and décor. It looks like the kind of place where they might give you a choice of herbal teas, massage your scalp vigorously with spicy unguents, and soothe your face afterwards with a hot towel. They’ve pushed postcards through the door, opening offers after lockdown ends.

It’s about loyalty, though. I always use the barbers fifteen minutes walk down the hill from my house. It smells faintly of damp dog – because you can bring your dog in – and charges £6 for a standard trim. I took my son there for his first cut, and now we continue to go 30 years later. I wouldn’t think of getting my hair cut anywhere else, until now.

The new barber is part of a resurgence in our high street getting ready for reopening after lockdown, with a vibrant new artisan café, what looks to be a decent pizza restaurant, a microbrewery and as of this week, a new barber. All startups, entrepreneurs pushing themselves with passion, creativity and expertise.

My wife thinks I should try it. But then my wife thinks I should go almost anywhere other than my usual place. Though she agrees with me that £6 for a haircut does indeed represent great value for money, her feeling is that the quality of the work that my £6 buys is variable and can range from what she might merely describe as a bad haircut, all the way through to something more closely resembling a full-blown act of self-harm.

My wife thinks I should go to her hairdresser, who does blokes and ladies. I scoffed the first time she suggested this. Why would I spend £15 on a haircut? I asked. There was a slightly awkward pause. Apparently, £35 would barely get your hair combed, let alone cut, at my wife’s hairdresser.

But it’s about loyalty, as well as convenience and familiarity. At the barbershop favoured by my son and I, our hair gets cut by two men, known to us after close on three decades of custom, as ‘our bloke’ and ‘the other one’. We’re on first name terms with Dave and Ken, but James and I have our own routine: if ‘our bloke’ is busy when you go in, ‘the other one’ does it. Hence the typical exchange when one of us comes back with a haircut: Who did you get? Our bloke? No, the other one.

And the finale of each performance – because that what a haircut is – I always look forward to that moment when the barber applies the big fluffy brush on my neck like an archeologist dusting off an ancient artifact, removing any lose stray strands of cut hair, before the pointless ceremony with the mirror, showing me how the back of my head now looks. This is my opportunity to comment critically, but I think both of us know that’s not going to happen.

In thirty years of the ritual of being shown the back of my head by our bloke or the other one, I have only ever said: Smashing, just the job, that’s great. Thank you. You don’t want to appear difficult, especially if you don’t really have an opinion in any case. I tend to be perfectly happy with the haircut as given. Then I pay £6 and leave. See you next time.

But maybe it could all be different in this bright new emporium, a new groomer with whom I would have to cultivate a new relationship, and a whole new experience of lights and music and herbal tea. On the other hand, it would cost a lot more than £6 a throw – starting at £18 looking at his price on the postcard. For a haircut! And I miss our bloke. Not to mention the other one.

The challenge for the new barber in town is winning early adopters, and turning them into regular, paying customers – the goal of any startup. He has to provide an incentive for me to switch from my existing emporium and show that he has a different value proposition to connect with me – customer attraction, traction and retention is what turns a start-up into a high-growth business.

Related to my barber scenario, Michael Dubin, founder of Dollar Shave Club, is a great example. It’s some time ago now, but the lesson for startups remains valid. The disposable razor blades market was dominated by Procter & Gamble’s Gillette brand. Dubin launched his business of selling razors because he was fed up of paying for expensive disposable products, and was always running out of them. His new business would offer customers easy access to good-quality razors via a home-delivery subscription service.

Dubin tapped into consumer frustration with the existing solution with an amusing video. He touched a funny bone while generating demand for his razors. His video’s title was Our Blades Are F***ing Great – played well to men annoyed by the rising cost and myriad features of disposable blades, mocking the established brands while claiming to offer better value. The video has 27m views:

Dubin had a clear idea of where he wanted to go: men would be prepared to pay for his blades in advance, and that a delivery service would add value and convenience for his customers with his “SaaS” (‘shaving as a subscription’) model. Some brave and bold moves saw Dollar Shave Club elbow in to a mature, existing market, dominated by strong brands.

Unilever bought Dollar Shave Club for $1bn – hardly a steal! From nothing, Dollar Shave Club had a 1% market share in just three years, connecting directly to the consumer with irreverent marketing and a sense of purpose, with a back-to-basics approach.

The lessons for startups from Dollar Shave Club is simple: the primary focal point is to constantly emphasise the need to be famous for something – why would customers buy from you? A mindset embedded with discipline, clarity and focus on being different, if not unique.

Nurturing relationships with your new customers is a crucial part of growing a startup. In this age of automation and innovation, caring for your customers has never been more important. At any moment, an unhappy customer can share their opinion through social media and negatively affect your business, so create an excellent experience for your customers to help develop your startup’s relationship with them into a lasting one.

Walt Disney said it best, Do what you do so well that they will want to see it again and bring their friends. Creating a customer-focused culture should be a priority.

So what are the key actions for your startup customer encounters? It’s all about being thoughtful, and having the right mindset. It’s about creating a relationship., not just a transaction or simply about the price – price is the value of the relationship, it is not the metric for an immediate transaction, so don’t focus on that. The aim is to find, win and keep customers, develop a horizon for future, ongoing work, and not just an immediate invoice.

So, here are my thoughts about how to go about generating a series of long-term relationships, and a sustainable stream of sales revenues:

Set the scene Frame the first encounter in the first 60 seconds, be a psychologist, shape how the ‘feel-think-feel’ experience happens. This three-stage process hugely influences how the customer anticipates the rest of the experience.

Be curious, take their agenda, not yours live in your customer’s world, be counter intuitive, taking a ‘sales agenda’ will kill the opportunity. Identify some immediate needs and quick wins and be helpful, add value from the outset – look at the bigger picture and longer term, not just the transaction.

Don’t come on too strong, too soon Join the dots for the customer’s thinking. It’s like jazz, learn the harmony and improvise over the top, give them a feeling of assurance and excitement, the art of the possible from working with you. Wow them!

Always listen Playback their words to create a connection: ‘So, if I’ve heard you correctly…’ – reflect back – shows listening skills, validates where you’re at, and helps you to understand how they are feeling. Build intimacy and engagement in the conversation.

Have insight Be prepared to directly describe a real problem and your solution from experience, be able to demonstrate the value you bring. Serve as a sounding board, facilitate discussion by providing an answer that stimulates the conversation. Listen with curiosity and interest to make an authentic connection.

Watch their watch, mind your mindset. Help them simplify, clarify and focus on their issue, help identify the critical factors in their decision. Be a collaborator, focus on being a helpful in the decision-making process, not the decision itself. And don’t eat up all their time.

Ensure your conversations have energy Be alert, engage sincerely, show interest. Create empathy – we are in this together, identify the common ground and create win-win scenarios. See yourself sat the client’s side of the conversation – how you see it is how you sell it. Your energy creates empathy.

Build trust Make yourself relevant to the customer’s personal goals, agenda and aspirations. Be able to have a meaningful dialogue in their language, understanding their drivers – all client buying decisions relate to this information. Let them see you are investing time in them as a person and the relationship, from their perspective not just you own.

Understand what is not being said What are they thinking now? Use contrast to change the mindset – what’s the most important message you want to leave? Develop your ‘points of view’ – offer a perspective developed from experience – medals and scars – offer advice, guidance, thoughts – create a personal impact of your credentials.

We all want to make the best first impression, showing the authentic and real person that we are. With so many competitors challenging for your customer’s attention, you need to invest time and creativity engaging with customers, with knowledge, expertise and empathy to show you can help them and get on their radar.

Spend time understanding their problems from their perspective, showing the potential value you can bring before you even start to think about selling to them. Remember, you want a relationship not a transaction.

My hair has grown out long and shaggy, not in that sexy-young-rock-star kind of way but in that time-to-take-the-dog-to-the-groomer kind of way. I can’t wait for 12 April. Will I stick or twist with my choice of barber for my next haircut? Dollar Shave Club shows how you can reinvent an existing business model in a traditional, stable sector, so I’m curious about the new shop to see if they can out do our bloke or the other one.

When I sit in the chair, will they start at the front or back? Top or bottom? Swivel the chair or walk around? One thing for sure, he won’t greet me with Our Blades Are F***ing Great!

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