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Acquisition. If you have a diverse customer base, attempting to retain the set of customer who have been impacted can be a lost cause.
Identify your set of customers who are thriving in this environment, survey and interview them to learn how to market to them, and go market in those channels.
I have the opposite view of how a lot of folks think, which is I think there’s a ton of focus on retaining customers right now (and that’s not wrong). I don’t think that’s a bad thing but I think empathy demands that we recognize that some people are affected very, very differently than others.
Although Carnival Cruises cannot afford to pay you right now. They don’t have the budget for it.
Your local restaurant does not have the budget for it.
Your local retail shop doesn’t have the budget.
So recognize that if you have a diverse set of customers, some of them are going to be massively affected.
Spending all your energy focusing on retaining the 20-40% of your customers who are like, “I have no money, nothing’s coming in,” trying to get them to keep paying you the same amount is a lost cause.
Instead I would focus on recognizing who are our best customers who are surviving and thriving in this environment.
Let’s go find more people like them that we can help — the people who are, I don’t want to say “easy to retain”, but easier to retain.
Use [the customers that are thriving] as a specific customer cohort, and identify more people like them. Go find the sources of influence and attention that reached them. Go do marketing in those places — maybe that’s search, social, paid, etc.
That’s where Casey and I are focusing our effort for Sparktoro. We basically recognized that we got punched in the mouth … half of the customers we thought we could get for Sparktoro, they’re never going to sign up. They just don’t have budget approval anymore — all their corporate cards have been pulled.
Bottom-line: They can’t go spend anymore.
Let’s go find the industries and people who are affected positively, whose demand is growing and they have to go get more online attention.
We’re going to market to them through the next three to six months.
You know what Fish, I wanted to disagree with you on that when you started off, but as usual, I was like, “dudes got a point”. It makes a lot of sense.
I think that’s the saddest part (outside of growing the business), it’s more about when you’re across from a client and they’re like, “I wish I could continue to work with you.” It’s just gut wrenching when someone’s like, “I love you, but I can either keep an extension of our team [the agency], or I can keep someone’s job on my team”.
You’re like, “I get it. I’d be like, I’d fire me too. Cut my budget, come back in the future.”
I don’t know if you saw this, but Buffer did a really smart thing around this.
They basically saw that a ton of their customers couldn’t afford to pay them and [offered] if you’re having trouble paying, here’s three months free. Stick with us and your same plan — we’re doing good anyway. I think that’s so awesome.
If I’m a Buffer customer, I’m not going to complain that someone who’s hard-hit is getting it for free and I’m not.
These are extraordinary times and so extraordinary measures have to get taken.
On the Moz board call a couple of weeks ago, Brad Feld (one of the investors in Moz) suggested that Moz do something. A bunch of software as a service companies have been doing this, which is essentially saying, “Right now if you have a contract with us and it’s a long term contract, we can do a very large prepayment discount”.
If you call us and are basically like, “Hey, we’re worried about if we can afford or if we can re-up”.
Just be like, “Okay, cool. If you want to pay whatever 15-30% of the normal price, we’ll grant your contract for the next quarter, six months, year, so you can stick with us”.
I was like, Oh yeah, I get it. That makes sense. It’s good for the business now. It saves the customer a bunch of money. The people who really need it can still get it, and it doesn’t create this problem.
I think a part of the sales team and a lot of SaaS companies are like, “yeah, don’t worry about paying us right now. You can pay us in 90 days.” And then in 90 days, our cash collections looks crazy and we’re not getting any of those dollars.