Importance of ‘Influencers’ as Startup Customers
Guest article by Soumitra Sharma, IDG Ventures IndiaAs a young venture, getting the first customers is hard. As one can imagine, getting the first ‘right’ customers is even harder. For bootstrapped entrepreneurs, any dollars that come their way are literally worth their weight in gold. However, from the perspective of revenue sustainability, it’s important that ventures choose their first set of customers extremely carefully. Ideally, their first set of customers should include an optimal number of ‘Influencers’. Though the term is quite self-explanatory, it’s important to understand all its facets – who are Influencers, what do they comprise of, why are they important to a young company, and how should entrepreneurs be targeting them.
Who are Influencers?
In a nutshell, Influencers are a set of individuals or entities that significantly influence decision making, either directly or indirectly, in a particular eco-system they are most active in. They carry a high-quality reputation and track record, command widespread respect in their domain, and have enough credibility that everyone listens when they speak. In addition, they often create standards in a particular industry; provide a definitive vision regarding the next-generation of products and services, and are often the first ones to work towards resolving inefficiencies in a particular market.
Types of Influencers can vary immensely across domains. They could range from industry veterans and big-brother companies, to rising business stalwarts and disruptive innovators. For instance, in case of a medical devices company, it could be a set of nationally renowned doctors and specialists while for a software products company, it could be a large global bank. For a venture providing offerings to the digital media industry, Google, Facebook and LinkedIn are critical Influencers in the Silicon Valley while for an engineering company, it could be a major Public Sector unit or a Government department. The variation is tremendous and therefore, it’s critical for entrepreneurs to correctly identify the Influencers most relevant for them.
Why are Influencers important?
Though there are obvious reasons why an entrepreneur would love to have Influencers in the customer portfolio, there are several non-intuitive benefits that impart that much more importance to this category.
The Obvious: Influencers spread the word
Influencers are excellent early adopters as they are quick to spread the word. The industry gives importance to both their words and actions, which works perfectly for entrepreneurs. As a young company, the toughest part is to move beyond the first set of 2-3 customers. Having Influencers in this set dramatically improves the probability of having follow-on customers either through formal referrals or word-of-mouth.
Influencer testimonials and case studies matter
Customer testimonials are a standard industry practice to create credibility and traction in the market. But have you ever wondered whether your test cases and testimonials are actually being taken seriously by potential customers? Having an Influencer give you a testimonial indeed makes a difference, and significantly improves the efficacy of marketing collaterals.
They save you precious marketing dollars
As a bootstrapped entrepreneur, your customer acquisition cost can make or break the business. A quick word by the Influencer over phone or email will get you that elusive meeting with the top decision maker in a potential customer, eliminating numerous cold calls by your sales person. A nonchalant discussion by them in a gathering can save you expenditure on the booth you were about to set up in an exhibition. Nutshell – they become your sales guy, your CMO and your ad-person.
On top of all this, Influencers also provide valuable feedback!!
Due to their inherent vision and knowledge about a domain, Influencers also end up becoming a valuable sounding board for entrepreneurs and provide critical feedback about potential refinements and improvement areas for your offering. As a high-potential startup, your vision is to create a large, high-impact and sustainable business. In this context, nothing can be worse than early customers who don’t provide feedback – it can easily set you back in the learning curve by a few years. Influencers will ensure that ventures not only sell more, but learn even more.
Of course, VCs love Influencers as early adopters
Last, but not the least, VC investors adore Influencers. To them, it’s a great signaling mechanism about the offering’s quality and validates the market need it’s trying to solve. Having them as customers automatically answers several questions that VCs might take weeks to probe deeper into. It also eliminates concerns about early traction and scalability of the venture – again a pain point for VCs. Essentially, if there are names of Influencers on your ‘Existing ‘Customers’ Power Point slide, rest assured that several funds will sit up and take notice.
How to identify and reach out to Influencers?
I like to classify Influencers into 2 categories – Primary Influencers, which are obvious domain experts, industry stalwarts and category leader entities; and Secondary Influencers, which are not-so-obvious yet equally influential.
Reach Primary Influencers through Friends, Family…..and even In-laws
Your existing network is the best way to access Primary Influencers – even the networks of your in-laws. Yes, this is that important! Identifying Primary Influencers in a sense is quite straightforward, since they are obvious candidates for your venture. The important thing is to access them by utilizing your existing networks effectively.
Be creative to identify and target Secondary Influencers
Did you know that the Sales and Marketing Managers in FMCG companies have very intricate b-school networks and rely immensely on trusted referrals? Or that retired senior executives of the Software Industry continue to exert significant influence on active senior IT leaders? Or that SMEs in the same geographical cluster or SEZ often make critical procurement decisions together? In each of these cases lie embedded Secondary Influencers.
As an entrepreneur, creativity is required in identifying and targeting Secondary Influencers in your own area of operation. Maybe these Influencers attend particular events, or are part of specific groups or associations. These can then be used to effectively network with them. The effectiveness of just walking up to someone and starting a conversation can never be under-estimated.
To conclude, Influencers are a great way of providing a traction and credibility kicker to young ventures. It requires immense persistence, patience and creativity, but the upside is well worth it.
The views and opinions expressed in this column are strictly personal, and not those of any organization/institution the author is or has been a part of, nor is made in any official capacity of such organization/institution, unless explicitly stated otherwise. None of the information, views and opinions in the column should be construed as business or legal advice.