As the title of this blog post suggests, finding the first paying customer for your new business is not easy. This week (March 8th, 2020) is my first one spent working full-time on CarEdge. Since December, when I began working part-time on the business, to now, we have yet to attain one painstakingly important milestone — getting our first paying customer.
That’s not to say we haven’t tested our service and validated its legitimacy. Since December, CarEdge has assisted four people in their car buying process.
The results have been inspiring, and have proved the effectiveness of our service. We’ve also researched and determined that the market size is sufficiently big to pursue. Where we’ve run into trouble is finding someone to be the first paying customer.
It’s deflating to start a company, know your services help people, and still not have a true customer. These are the joys of entrepreneurship though, and trials and tribulations of starting a company while working another job full-time.
Now that I am working full-time on CarEdge, I anticipate we’ll get our first paying customer sometime soon, but I’d be foolish to suggest I know exactly who it will be or when that will happen.
If you are anything like me, you Google search for answers to your questions. Type into Google, “how to get your first customer in b2c” and you’ll see myriad results. Too many. It’s overwhelming.
After reading through the first page of suggestions you’ll begin to notice a theme, at least I did.
The articles, albeit long, well thought out, and detailed, lack legitimate insight into how startups found their first customers. Instead, most of the results talk about the importance of “building your brand,” or “talking to customers.” Yes, I get it, those are things we should do, but tell me how you did it, was the thought that repeatedly went through my mind.
That was the impetus for today’s blog post. I’d like to share with you the tactics (not strategies or theories) I have employed over the past three months in an attempt to get our first paying customer at CarEdge. This may be less of a “guide to getting your first customer,” and more of a “learn from our struggles” type of post, yet either way I trust you’ll find it interesting and valuable.
I’ve broken out our tactics into two categories; short-term and long-term. Bear in mind that generating sales is nothing more than helping people move through a sales process, commonly referred to as the “funnel.”
At the end of the day, every tactic you read below is in an attempt to get someone into the funnel at one of those four stages, and then help them move themselves towards taking action.
Let’s dive in.
Short-term tactics to get your first customer
Some tactics are designed for “quick wins.” In sales and marketing there are (generally speaking) no silver bullets. If someone could flip a switch and generate hundreds, thousands, tens of thousands of dollars of revenue, they’d be worth their weight in gold.
Unfortunately, such people don’t exist. Although the thought of a marketing “genius” coming up with a master plan to generate instant revenue is “sexy” and portrayed in the aggrandizement of Silicon Valley super heros, the reality is that getting your first customer comes from “grinding it out,” not finding the elusive silver bullet.
Bear in mind that I have only had the capacity (up until this week) to work on generating leads and sales on a part-time basis. With that in mind, here are the three short-term tactics I have tested since December:
- Scouring reddit and other online forums;
- Sharing with family and friends;
- Offering our services for free to get referrals, press, etc.
Reddit and online forums
Online communities exist to connect like minded individuals. When it comes to online communities, no website is more robust and trafficked than Reddit.
Broken into subreddits that focus on specific themes, Reddit is home to millions of users, and is a prime target to find your first customer. There is a subreddit for anything and everything, and if your business targets consumers, then you should be able to find a community of people who may be interested in your product or service.
You may be thinking to yourself, “Great! I just found the community that should be interested in my product. Let me submit a post about my company!” DON’T!
You might also enjoy this article if you haven’t read it already: Why I Quit My Multi-six Figure Job at 24 to Go into Business with My Dad
Similarly to how no one wants to be pitched or sold in the real world, people don’t want to be sold your product on reddit. There is a minuscule chance you’ll have success posting to a subreddit to promote your product. There’s a better chance you’ll end up getting banned.
Instead, what I would suggest, and what I have tested for the past few months, is reaching out to people via direct message. For example, for CarEdge, we help people buy cars. So, every morning I review the latest posts on:
- r/whatcarshouldibuy
- r/carbuying
- r/usedcars
Within each of these subreddits I identify 10-20 people who are looking for help buying their next car. They’re literally posting to reddit to ask for help. Since our service could alleviate the pain that they’re in, I reach out to them, one by one with a personalized message.
Over the months I have tested three different types of messages. Two have been effective, and one has fallen flat.
Asking for general feedback about our new service has worked well. Here is an example from the forums at Edmunds.com.
Offering our services for free in exchange for a Google and Yelp review has worked well. Within a few days of sending this style of message we had helped one customer get their new car. They’re ecstatic, and so were we
What didn’t work was offering our services for a discount. In retrospect, this makes plenty of sense. For the same reasons I outlined above (no one wants to be “sold”), this message I sent was me “selling,” but at a discount. Not only was I not providing value to the prospective customer (I was selling), I was also undermining the value of the service we provide. I sent out dozens of these messages, and no one responded. I don’t blame them.
Sharing with family and friends
As far as “no-brainer” short-term tactics go, this one is at the top of the list. Unfortunately, for us, with CarEdge, we need to be talking to people who are considering buying a car sometime in the near future. As I engaged friends and family about my new business there was some interest, but primarily in the future. I can’t force my family and friends to want to buy a car right now, and that’s something you come to accept!
Just because this has not proved effective for us is not to say that you shouldn’t engage with family and friends and make them aware of your new startup. From posting on LinkedIn, to simply having conversations with my peers, we’ve been able to get a lot of value from our network.
Offering our services for free
This tactic has been painful, but beneficial. Like I mentioned above when discussing reddit, this was the “offer” in one of the messages I’ve been testing. This tactic is painful because it’s hard to justify trading your time for no money, however, it’s incredibly beneficial, because it has already yielded evangelists for our service.
The idea here is to delight your free customers so much that they refer you to other paying customers in the future. Although we have yet to get our first paying customer, this tactic has generated a lot of optimism amongst our team.
For example, one family that we recently helped in Savannah, GA shared this email with us:
By helping this family for free, we’ve created one of our first “evangelists,” and the value of that cannot be understated. However, just like we discussed at the outset of this blog post, what we need are people who are interested in buying a car today. Yes, having an evangelist, and someone who sings our praises is valuable, but no, that doesn’t actually get us any closer to finding more people who are interested in buying a car right now.
You see the predicament, don’t you?
One of the additional tactics we’ve tested in conjunction with offering the service for free, is to be proactive in requesting press outreach from the people we help.
For example, for this family that we assisted in Georgia, I researched all of the local reporters in their area and identified those who I thought would be most interested in running a story about our services. I then drafted an email template for our evangelist and sent the list of reporters and the template to her. My request was simple, if you feel comfortable, please reach out to the reporters and cc me on the email.
At the end of the day, our job is to make it as easy as possible for evangelists to spread the word about the work we are doing. I refer back to the book, Don’t Make Me Think by Steve Krug in situations like these. The book is for web design, however its concepts hold true across a breadth of topics. Your responsibility is to “tee up” the next step after you help someone for free. Don’t make them think, just give them what they need to spread the word.
These are the three short-term tactics we have deployed. The process is a grind. In conjunction with these short-term initiatives, there are long-term tactics we are working on as well.
Long-term tactics to get your first customer
Unlike their short-term counterparts, long-term tactics to generate your first paying customer are less stressful, make more “common sense,” and are worthwhile distractions from the pressure to find someone to pay right now.
You might also enjoy this article if you haven’t read it already: Something to Be Thankful For: Learning to Play the Long Game
When starting a new company there is a lot of pressure to get a paying customer, and with good reason. If you can’t find people to pay you for your product or your service it’s a strong indicator your business won’t have much of a future.
However, when you execute long-term tactics to build your sales and marketing funnel you find yourself (at least I do) having more fun, feeling less stressed, but also not directly affecting your number one priority (getting a customer yesterday).
This is the super “unsexy” side of startups and entrepreneurship. It’s the daily struggle to focus on short-term “quick win” tactics that provide validation that you aren’t crazy for going into business, while wanting to spend your time working on long-term tactics that feel a heck of a lot more “kosher.”
With that preamble out of the way, it’s time I share which long-term tactics we have invested in to generate sales opportunities for CarEdge.
Engaging with people
It shouldn’t come as too much of a surprise that you need to feel comfortable engaging with people to get your first (or second, or third, actually, all of your) customers. Engaging with people in your industry is one of the most foolproof activities you can take to build your sales pipeline. What does that actually look like?
There are two primary resources I draw on to identify potential high-value relationships for CarEdge. The first resource is Help a reporter out.
Help a reporter out (commonly abbreviated to HARO) is a matchmaking service for journalists and their sources. I have had a registered account with HARO for years, and have always wanted to become an active participant. With CarEdge in full swing, I have made a habit of searching each of their three daily emails to see if I could provide value for any of the journalists looking for help.. I search each topic for anything relating to cars, trucks, suvs, or automobiles.
This outreach has yet to lead to anything substantial, however the potential is there.
The second resource I look to is Google Alerts. No matter what industry you’re in, Google Alerts can help you stay on top of relevant news. Currently, for CarEdge I have two alerts set, one for “car buying help” and the other for “how to buy a car.” I receive an email from Google (two actually, one for each keyword) with relevant news associated with the key phrase.
This has proved highly valuable.
By getting the alerts directly to my email inbox at 6am each morning, I am able to connect with journalists that are writing relevant content in my industry. If it weren’t for these resources I otherwise wouldn’t be able to proactively engage as many people.
Content marketing & search engine optimization
If you start a startup in 2020 and you aren’t focusing on “content marketing and SEO,” did you really start a start up at all?
All jokes aside, content marketing is incredibly valuable. Join me in a brief thought experiment…
If you had an infinite advertising budget, and your boss tasked you with “figure out which google search ads make us the most money,” which keywords would you target? Keep in mind you have that infinite budget, so money isn’t a factor — you can simply outbid your competitors for the first spot in the search result every time.
Do you have your keywords in mind? For CarEdge we would target; car buying help, car buying consultant, car buying service, etc.
With your infinite budget, you could easily spend tens of thousands, if not hundreds of thousands of dollars on ads to rank first for your “best” keywords each month.
This is the value of content marketing and SEO. Instead of spending hundreds of thousands of dollars on ads that cost you per click, you spend hundreds of thousands of dollars to create the highest quality content so that Google places you on the first page (preferably the top spot!) for the keywords that are most meaningful for your business (the same ones you would spend your infinite budget on to drive revenues).
There are two primary benefits, and one major drawback of content marketing and SEO when compared to buying search advertisements.
The two benefits are; your cost does not increase on a “per click” basis, and you can position your company as being “customer centric” by teaching your audience what you know. The downside? It takes a long time to reach the first page, let alone the first spot on Google.
With CarEdge we don’t have an infinite budget. Actually, we don’t have much of anything allocated to spend on advertisements. That means we’re investing our time heavily into content marketing and SEO.
So far the results have been promising. For a brand new website it can take anywhere from three to six months to truly get on Google’s radar. At the three month mark, we’re certainly on their radar, and we’re already ranking for quite a few keywords.
As you can see, organic search traffic has been rising steadily since the website was created. You can even tell when Google first started to recognize that our website was worth indexing.
The increase in organic search traffic is thanks to our consistent publication of guides on the CarEdge blog (each of which is focused on a particular keyword). In addition to the content, we’ve made an effort to optimize each page for the best user experience (and ultimately the best chance to rank higher with Google), thanks to Google Lighthouse page audit.
There are entire blogs, forums, and books on content marketing and SEO, and at the end of the day, you can read, watch, and listen to every voice in the space and still come away with the same realization — you need to give people valuable content that is engaging, useful, and helpful. If users click through on a search result, spend actual time on your website, and occasionally share your content, you’ll rank well on Google. That’s SEO for dummies.
We will get customers from our SEO and content marketing efforts. I envision that this marketing channel will be the primary driver of revenues in the future (12 to 18 months from now). There is no reason we can’t out rank the current #1 results for the keywords we are targeting.
Youtube content marketing
Part of the fun (and struggle) of being an entrepreneur is the constant nag to try something new and to feel challenged. For me, Youtube represents that challenge right now.
Inspired by the hundreds (if not thousands) of videos I have watched over the years, and the appreciation I have for individual Youtube personalities, I convinced my father, Ray, that we need to film him talking about the car business. After some initial reluctance, he was on board.
As a long-term tactic to generate sales opportunities, we see a lot of promise. As of writing this we have 140 subscribers to the channel, and nearly 200 hours of “watch time.” Ray is bewildered (the number of times I’ve heard him say “I don’t know why people watch this shit, but damn is that neat!” has to be more than fifty at this point), and it appears there is a lot of potential growth. I feel confident there is.
Some automotive youtube channels have over one million subscribers, and although our ambitions are not that high, I envision a world where the CarEdge Youtube channel has thousands, if not tens of thousands of subscribers.
Ray represents an “insider” and that persona on Youtube has the potential to be a big hit. There are Youtube channels for airline pilots that have hundreds of thousands of subscribers and their video content is relatively simple — they talk about things only airline pilots know.
We’re doing the same thing with Ray. He is “pulling back the curtain” on the retail car business and giving viewers insight into how car dealerships operate.
It’s exciting to see people comment, like, and subscribe to the channel. Plus (and this is just a hunch, I have no backing for this assumption), I think there are positive SEO implications for having a Youtube channel and embedding our videos on our website’s blog posts.
Youtube is owned by Google, and it’s my presumption that they can figure out that our website is associated with our Youtube channel, and that by having “rich media” (videos) on our website we increase the amount of time someone spends on our site, thus increasing Google’s perception that we should rank higher.
This is all conjecture, but it is part of the long-term sales and marketing strategy.
What we’re going to try next
So there you go, that’s what three months of part-time work on a startup looks like (in terms of sales and marketing). In an effort to get your first paying customer you need to be willing to grind it out, engage with people in a value oriented way, and test some long-term tactics too.
At the end of the day though, we’re still looking for people who are actively interested in buying a car. Where are they? The tactics listed above are all great, but three months in and they have yet to yield our first paying customer. What gives?
Well, no matter how quickly I want something to happen, I have to respect the timelines of other people. I have no doubt that our efforts from the past quarter will yield customers in the future, just not right now. This does bring to mind the need to test other tactics and there are two I plan to introduce into our marketing mix.
One of those short-term tactics is to get business cards and put them at restaurants, golf clubs, etc. I have no clue if this offline marketing will work, but it feels productive and will force me to engage with local business owners, which certainly isn’t a bad thing. CarEdge offers national service, however taking a regional approach to get our first customer is a concept that resonates with me.
The other short-term tactic I’ll be working on is contacting employers, wealth management firms, and professional associations to see if they are interested in underwriting our service as a perk for their employees and clients. There are a lot of unknowns with this tactic, however it feels worthy enough to investigate further.
Remember the sales and marketing funnel
Finding your first customer is arduous, stressful, and fun. Don’t have fear! Remember to trust the funnel!
As we navigate this process with CarEdge I am reminded of how challenging starting a company is. The last time I did this I was a freshman in college, and my naivety guided me. This time, I feel a bit more confident, yet that confidence brings an added layer of pressure.
If you have any ideas or suggestions for how you think we could possibly find our first customer, or you want to be our first customer (more power to you!), please don’t hesitate to contact me.
Thanks for reading.
-Zach