About Me
• Over 10 years experience in manufacturing industries involved in producing consumer products, construction hardware, auto parts.
• Have worked in various positions from supervisor to Vice President
• Currently working as consultant and coach for business owners and startups
• Passionate about learning the art and science of startups
http://www.linkedin.com/in/viveknaik
http://goastartuplaunchpad.in
LIFECYCLE OF CUSTOMERS
Lifecycle of customers
KNOWING
GETTING
KEEPING
GROWING
http://goastartuplaunchpad.in
It all starts with knowing your customer!
Let me tell you a real life story…
It is a journey of parts supplier who went to become a full scale
manufacturer of his own products…
In the beginning
Number of Employees: OneProduct/Service : Driver Seats to freight companies
Sales representative for a big seat manufacturing company
Selling seats to top 10freight companies providedgood insight about theiroperation, challenges andalso got to interact withtheir people at all levels…
KNOWING
Customers needed seats, but they wanted to save money by extending
the life of their seats
Discovery
This knowledge lead to first attempt at manufacturing…
Rebuilt Existing Seats for a local Customer
GETTING
Lessons Learned
• Build a platform where you can interact with your customers
– You can interact with customers without selling anything too
– You can have a blog, organize events, join groups
– Our goal : to open a dialogue with future customers
http://goastartuplaunchpad.in
Lessons Learned
• Find out what the customer want beyond their need and provide it to them
– In the story customers just needed a seat but actually they wanted not to spend too much money buying new one every time
– Want is always a stronger motivator then need
http://goastartuplaunchpad.in
Lessons Learned
• Customers don’t always know what they want!
• Don’t wait for perfect solution, provide the minimum viable product that will solve your customers biggest issue and then iterate– The perfect solution in this case would have been
a robustly designed seat with long life
– Rebuilding old seat was technically less challenging yet it extended the life of the seat at very small cost
http://goastartuplaunchpad.in
Lessons Learned
• Don’t try to solve all the problems of all the customers
– Don’t loose your focus
– Focus on biggest issue of the customer of who is willing to try your solution and pay for it
– for this to happen the customer must desperately want the solution, he has suffered the problem for considerable amount of time with minimal or no success and has the budget
http://goastartuplaunchpad.in
Continuing the Story
Selling a product or service once is easy but to make your customers to buy on repeated basis is challenging
So they started offering an experience that was different than the major seat
suppliers
The new company was perceived as friendly neighbor whom you can call to
solve your problems
They realized that people did not only buy because of the products but also because of the experience that came along with it ….
KEEPING
There was no long waiting time, not too many people to deal with, getting the seat was just a phone call
away…
If the customer had a problem, somebody visited them in person to find the solution
Lessons Learned
• There are many opportunities to help your customers on their buying, usage, and maintenance processes of the products
• Buying experience and support during the lifecycle of the product is a big part that many companies neglect and can be your leverage against your competitors
• Human touch, goes a long way when maintaining relationship
http://goastartuplaunchpad.in
Lessons Learned
• Don’t see yourself as only person who sells a product , but as partner of your customer who solves their issues
• Metrics related to Quality, Delivery and cost needs to be measured and managed to provide value to the customer
• Customer focused philosophies like lean helps to align internal processes, people and products to the need of the customer
• Understand the funnel, feed the funnel
http://goastartuplaunchpad.in
Continuing the Story
Number of Employees: 8 -10Product/Service : Driver Seats and seat parts to freight companies
Seat Rebuilder , and parts supplier
Good relations and service helped to keep steady flow of orders …..
But you can only sell so many rebuilt seats …..
Cost of the company increases: as salaries , material cost and other costs increase every year…..
So how do they stay profitable in the future…..
They realized you have to grow to survive…
GROWING
One avenue for growth was to find new customers
Finding new customers has its own cost and it takes lot of time
Other way was to sell more products to the existing customers
• New seats were designed for vehicles like lift trucks used by the freight companies
• Rebuild kits were sold to remote locations who could not participate in rebuild program
• Replacement and repair kits were developed
• There was a failed attempt to design a advanced new driver seat
Surprisingly there was a steady flow of new customers who were referred by the existing customers….
This helped the company to enter into other industries - Bottling companies- Package delivery- Passenger bus
Lessons Learned
• Find other applications where your customers can use your product or service
• It is easier and faster to grow by selling more to your existing customers than finding new ones ( Though you have to find new customers)
• Next place to grow is finding industry similar to your current customers
http://goastartuplaunchpad.in
Lessons Learned
• Helping your customers grow can help you grow
• Do not grow faster than what your process and people can handle
• Find ways to fully penetrate the existing customer segments
• Tip the funnel, make your customers your brand ambassadors
http://goastartuplaunchpad.in
CONTINUING THE PROCESS
KNOWING
GETTING
KEEPING
GROWING
Back to the Beginning
• After growing your customers we need to revisit the first part of the cycle : knowing
• This time we want to know what different type of customers are hidden within our existing customers which are not fully satisfied
• The iterate the whole process
http://goastartuplaunchpad.in
Another Story of
Telephone company, grows from just providing phone service to internet provider
After knowing what different customers it served they realize there are certain customers who want a more
reliable and high speed internet connection
So they launch a product with high price tag which provides high speed internet
connection with dedicated line
Recommended
