Smart investors are looking for big, scalable investment opportunities. Embedding viral growth at the core of your company is a powerful way of building this future.
During my years building PlusNet we achieved true virality. Maximising operating profit while producing market leading NPS. These are the principles that I’ve followed ever since.
- The first principle is transparency: being open with data
Your data is your brand. It is your most powerful marketing lever. Published data drives your operations more effectively. Customers know a startup is loss making, but want to know the product is sustainable. They truly value being able to see inside.
> Your customer wants to be your fan and trust you. Transparency is the key. When someone refers you they put their reputation on the line, embolden them with honesty and inclusivity.
> It’s important to share unit economics at product level. Customers are smart, they need to know your product or service is sustainable.
> Transparency is key to maximising operational excellence. Whether its transparent CRM records which keep you honest or external deadlines keeping your team on task
> A commitment to transparency around your data will put you on the front foot in terms of product management. It enables you to make sure your products or services are hitting the mark
> Recognising there is a natural dialogue about your product amongst users is important. You need to engage in that dialogue as a contributor, the more open the better
- Once your customers are engaged in your company through transparency, you should focus on empowerment: customer self-service
Your customer might love your product but they won’t love going through you to access it. Whenever they do it costs you time and energy. Creating a delightful customer experience means putting your customer in control of the product administration. You should also treat partners as customers.
> Building network effects means putting network building in the hands of your users. Giving them tools to onboard their immediate social or business circle is key
> Hosting the dialogue across your customer base in an open community way will result in shared learnings
> Customer self service is critical to unleashing the full power of your product. People are naturally curious, some are fast adopters and some will take time. It doesn’t cost you anything to let your customers experiment with your tech
> Customer self service results in CRM issues being understood and resolved without you doing unneccessary work. This leads to a better internal focus, putting the customer at the heart of everything you do
> In order to scale effectively you should build common self serve functionality for all customer types
> Empowerment of this kind manifests in better informed products and service development. You know what your customers are doing and what they want. Your customers are an actively engaged part of your product development
- Finally and arguably most importantly, you need to bring your customers on the journey through alignment: sharing upside
If you have the transparency and empowerment building blocks in place, you can then take the final step. Sharing an appropriate amount of your gross profit on a recurring basis reinforces customer loyalty. This applies in either usage-based business models or subscription models.
> Any customer who brings more customers is worthy of an appropriate amount of your gross profit. Having your customers open up their network creates the ultimate stickiness and scalability.
> Building a scalable tech company is the mission. Doing so sustainably will realise the greatest amount of long term value. Therefore creating the opportunity to be economically aligned with your customers is smart
> Financially incentivising referrals will give you meaningful insights on which products or services are most appealing to customers
> It makes much more economical sense than the approach of ‘paying for churn’, which is the usual result of one time ‘bounty-based incentives’
We find this is best delivered as a workshop with founding teams. We’re always open to feedback and love to see startups putting this approach to the test. Any company wishing to engage with ADV should check out our founders page to see how.