For years when mentoring early-stage B2C startups, one of my key takeaways for the founders is start building a community. It's something that should start day one. If building a B2C company (not a social media app), the most likely reason you will be acquired in the future is community and brand. Raving fans that passionately talk about you and your brand everywhere they can. The acquirer wants your raving fans, not the product. They want those fans to now evangelize the rest of the products in their portfolio/platform.
So as a founder and startup you need to start building those relationships with your users. In this post I'm going to cover 2 topics. Personal conversations & freebies. We'll talk about how each develops the connection and dedication to the brand. And how it helps drive future sales, and virility.
The motivation for this post came from lunch I had the other day with a friend in Jerusalem. Israel has amazing food. There are few better things to eat than hummus. Yet, as an American sometimes I have that craving for good ol' 'Murican food. Burgers, hot dogs, fried chicken, pancakes, etc. There's an artisan hot dog shop called Zalman's that I've wanted to try for a couple of years. I finally got my chance this week.
The hot dogs were excellent. Homemade buns and homemade relish reminds me of those summer BBQs back in America. It was good enough that I'd come back again when in that neighborhood. Of course, a great product sells itself (product led growth). Most startups sadly don't do even this, but many of the ones that do stop here. Provide a great product and stay hands off.
But here's where the real opportunity comes into play....
Zalman (the purveyor of the shop) came out to speak with my friend and I. Asking where we from, how'd we hear about the place, what type of food do we like, etc. Opening the conversation to create opportunities for connection and personalization. For example, when he saw my excitement after telling me the relish was homemade he instructed his colleague to cover the entire hot dog in relish. Normally, it's a limited topping but he saw the opportunity for me to get excited and get more enjoyment. He then spoke more about how some of the products were made. Pulling us into the narrative of his business, and reinforcing that passion for his mission.
The same goes for your startup. If you're creating a family sharing app, it's all about asking questions about the user's family. Getting to know more about them and how they intend to use your product and why. It's then crafting the conversations to pull them in and involve them in your mission to help families share things securely. Because as the founder you have a family you love that you want to protect. The conversations help create relationships with the team & brand. Users that invest their time are more engaged and happier with your product.
Zalman came to our table twice. The first time stating that we were probably hungry. What young guys aren't?!?! He asked if we had ever eaten a corn dog, which neither of us has. I'm actually surprised I hadn't eaten one to date. He then walked into the kitchen and brought us two hot corn dogs on the house. He chatted with us for another minute and went back into the shop.
A few minutes later he returned with a dish of hot french fries. Telling us that the dogs go great with fries. Those too were on the house.
Each corndog costs diners 13 shekels (~$4.00). The fries go for 9 shekels (~$2.75). Let's assume that the cost to the restaurant for each corn dog is $1 and the fries $0.50. So in total Zalman gave us $2.50 worth of free food. Look at it as an investment. For his investment of $2.50, he could deepen our connection to his restaurant & brand. Meaning we have a wonderful first experience. Not sure how important this is? Think about some app or product you tried out that you weren't so crazy about the first time. How many times have you ended up using it again? Next, that investment will help drive us to come back to eat there again (and again and again). Best yet, we tell our friends on social media or write a blog post about it to help teach startup founders some critical lessons. What great food, what a great experience, what a friendly guy. That's worth its weight in gold (trust me).
So what's the ROI and how does it compare to what you could be spending the money on. That $2.50 ensured we had an amazing first experience with the product. Next, it deepened our connection to the brand. I wanted to go there for 2 years, and now that I have I'm very happy I did. Next, I want to go back there again. So he's driving future revenue from me at the cost $1.25. That's pretty good! Finally, I'm promoting his business in various forms. Of the 10s/100s/1000s of people that will read any of the social media posts, blog post, etc a certain percentage will take up my recommendation and passion and try out the restaurant too. Bringing him additional revenue from others.
So as a founder or growth hacker/marketer how is this relevant to you? You don't sell hotdogs. For you, it can be free plans, SWAG, or any other small type gifts. You have a user that signed up for your free plan. They're using it extensively and enjoying the experience. You know this because they respond to your onboarding mails (you better be doing this), they are sending in a number of support tickets asking about use cases, workflows, and sharing feature requests, or they're on social media saying they just found this great new app they are loving so far. As you're engaging in regular conversations with them and hear their passion, offer them a free plan or long extended free trial. The more they use the product, the more they'll fall in love with it and the more they'll share it with others. Plus it didn't cost you a penny!
You could also use SWAG (you definitely should). It costs roughly $1.50 to create and package a custom envelope with a custom sticker, postcard, and a couple little things like this. Just be sure to include a handwritten note. We used this tactic at InVision with a lot of success in the first couple of years. Again, for $1.50 you give a user something for free they didn't expect. You delighted them and you engrain the brand deeper into their heart.
Let's end off with ROI. For $1.50 in free food or SWAG my hope is for brand dedication but more so social media engagement. I'm hoping the recipient shares a picture on social media promoting my brand. This creates envy of other users wanting it and driving traffic and signups. Let's assume you spend $1.50 for CPC doing FB/Linkedin/etc ads. Of course, in reality it would be significantly higher, but let's pretend for this case. For $1.50 someone new sees your brand via ad. What's the conversion rate here? Alternatively, you see a friend or social media connection 1) sharing a picture of something 2) passionately advocating for that brand. Which $1.50 spent do you think would have a higher ROI?