✅ Happy customers are a startup’s #1 asset to acquire more customers. Period. ✅

Yet… how do founders activate this asset?

As an investor, I often feel that founders I speak to don’t have a clue. Maybe this article will help…

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I once spoke to a startup whose customers are over the moon happy with the software. One of the founders told me that one of their users said to him, “If you ever go out of business and I can no longer use this software, I am going to have to retire.” 

Whoa!

Now that’s a happy customer. The great news is that this startup has hundreds to thousands more users like this. 

But the startup’s growth wasn’t what one would expect. 

But that’s actually to be expected…

Happy customers does not automatically equal more happy customers.

Product stickiness does not automatically equal product growth. 

Furthermore, as an investor, I realized something - that the phrase startup “growth” tends to assume something very subtle:

✅ It tends to assume what matters most in acquiring customers is the efforts of the startup. 

But what if the most important asset in acquiring customers is actually the efforts of your existing, happy customers… if activated and empowered properly. ✅

Neither founders, nor investors, tend to discuss how to activate existing customers in the effort towards acquiring more customers. 

It may because I don’t know if they know how to activate happy customers. I aim to give tactical clarity to that in this article.

Three Truths about Happy Customers

There are three truths about happy customers 👇

✅ Happy customers are already convinced that your startup’s product is awesome.

Happy customers know others just like them and know where to find them.

Happy customers connect your product value to their specific situation. ✅

My Personal Example

At one point, I felt this unfold right in front of my eyes. 

Two Tundra Angels members had invited me to present Tundra Angels to their Vistage group. For context, a Vistage group is a group of about 10-12 CEOs of companies in a geographical area.

I was especially excited because the two investors were happy and proud of being in Tundra Angels. After finishing my presentation, I asked the two investors to add onto anything I shared or share their experiences. I just shut up and listened as I handed the floor to these two investors.

The two investors enthusiastically shared their glowing experiences in Tundra Angels, as well as fielded a lot of the Q&A from the group. They even responded to me when hard and theoretical questions came up from different individuals.

In that moment, for that 10-15 stretch of time, they were acting as an asset of Tundra Angels.

Let’s think about this for a minute.

30 minutes prior to this very moment, the 10 other CEOs in the group had never met me nor hardly knew I existed. But through the Vistage group, the 10 CEOs had known these two Tundra Angels members for years. The two Tundra Angels investors had embedded trust with everyone else in their group.

Furthermore, these two Tundra Angels members are already convinced that the Tundra Angels experience is awesome. They know others just like them and know where to find them. And in that moment, they connected the value of Tundra Angels to their specific situation.

There is no better person to communicate the value of Tundra Angels to a CEO than another CEO who has already experienced the value and has existing embedded trust.

Yet, that’s what happy customers do… but typically not naturally. But almost always when activated…

So, Why Are You Talking so Much?

Potential customers need to hear from your existing, happy customers. 

Most empowerment of existing customers feels forced. 98% of word of mouth referrals are not sustainable because they are one-off favors. Thus, word of mouth referrals become sporadic, highly variable, and not predictable.

✅ Startups can’t win on one-off favors and introductions. They need a word of mouth flywheel where happy customers continue to evangelize the message of your startup. ✅ 

The fundamental question is how does a startup activate the customers so that they reach potential customers out of their own self-interests?

3 Tactics to Activating Your Happy Customers

Maybe instead of the startup doing all the talking, startups should instead build a platform and give the customers a microphone 🎤, a message 💬, or an incentive 💵.

1. Give your customers the microphone 🎤

Give them a context to talk about your startup and the great things they like about it.

This is what I did off the cuff in the Vistage Group presentation when I asked these two Tundra Angels investors to comment on their experience with Tundra Angels. I didn’t plan it. But I saw how it worked incredibly well. 

If you are giving your customers the proverbial microphone, then founders should make sure then taking the microphone is worth their mutual time. 

There are various tactics that could work here, but I’d encourage you to get creative: 

It could be: 

An interview series with your existing customer base. 

Focus the questions around the problems that they are trying to solve in the market. Ask how your startup product has helped them solve their problem(s). Edit this conversation into 3-5 clips that can be posted on social media, shared on your website, etc. This is better for more educational related content, not as much closing a deal.

Interviews with key opinion leaders in your space. 

If they are customers, then the conversation will naturally turn towards how your solution has helped them.

A customer testimonial/review video.

One startup founder, Carter Brown, CEO of GoGuide, a startup in the outdoors industry, put together this great video featuring reviews from their customer base. It drives home the emotional part of why the product is awesome. A video like this is a perfect tuck-in for a potential customer that is on the fence about using your product. Video example below 👇

2. Give your customers the message 💬

Sometimes, when I want to introduce a startup founder to a potential investor or a potential customer, I ask them to send me an email with a summary on the company and attached a deck that I can forward along.

This isn’t laziness - this is increasing the likelihood of success.

Because I don’t feel adequately empowered with the startup’s message to articulate in in my own words by myself.

I want them to give me the words, the message, in their own brand way, so that I just need to ping the person in my network.

Almost always, the dynamic is that the startup needs to empower their customers with the message and not assume the customers know the message.

And yet, how often do we ask, “Let me know if you know anyone that could benefit from this too!”

Really? Talk about leaving the message up to chance.

For some startups, perhaps activating your happy customers is no harder than empowering them with the message on an ongoing basis? 

HINT: This works well when the customers have a predictable place to go to access your collateral so there isn’t any friction in them asking you for it. Provide them the context and platform to access it themselves.

3. Give your customers the incentive 💵 👍

At one point, I was made aware of an email exchange between a customer and a startup company. It went like this…

Customer: “Question - what's the thought around not doing anything with referral-based relationships? That hinders the GTM strategy considerably if your existing customers cannot be activated and incentivized to tell others…”

Startup: “I really appreciate the note. We see tremendous value in referrals driven by our customers and partners - we are proud to say that close to 50% of our new customers come from WOM or a direct referral. We may explore a formal, incentive-based referral program in the future once we have the bandwidth and infrastructure to support it.”

What This Startup Failed to See

This was a laughable response for one reason - apparently the startup is completely content with 50% of their new customers coming from referrals or word of mouth.

But the other 50% happens via other means that probably incur a ton of time and high touches.

Here is what bothered me about their answer…

“Why can’t the 50% referrals be more like 90%?”

Sometimes an incentive referral can change word of mouth behavior drastically. The startup’s job is to figure out what your customers want to receive as an incentive. 

Then, unlike this startup above, for the love of winning the market, make it happen.

Closing Thoughts

To gain an asymmetric edge in the market, it’s table stakes to have happy customers.

Happy customers need to be mobilized. 

So, I’d ask the following questions:

• Which of your customers are thrilled out of their mind with your product?

• Do they need a microphone, a message, or an incentive?

• How do you provide that platform to them?

A startup will only tip the market in their favor if their happy customers become mobilized customers, repeatedly.

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