So when I say “how to acquire customers like Arnold Schwarzenegger” what do I mean?

I would like to show you a real-life example of how a business (ours) is breaking down the way we get customers into actionable chunks. Whether you’re a realtor, a consultant or you manufacture widgets you can do exactly the same.

Originally, I was going to call this post “how to acquire customers by activating them” and for some reason this made me think of some robot like machine in a sci-fi flick, hence the Arnie reference.

“Activating” people sounds very scientific but when applied to the flow of taking potential customers and turning them in to paying customers it’s a useful way to look at things.

The one thing that your business has in common with everyone else’s business is that you start with people who could potentially give you money (aka prospects) and you want to convert them into people who actually give you money (aka customers).

I’ve found it’s not enough to leap from “prospect” to “sale”. By understanding the part in the middle I can increase the number of people paying for my software and so can you for your business.

 

So what is this missing link?

Asking one simple question gets you the answer you need on how to acquire customers.

“What one thing does EVERY paying customer do with you or your product prior to becoming a paying customer?”

This is your “ACTIVATION” point and knowing this is essential because it shifts the focus of your efforts to acquire customers. If you don’t have activation you don’t have customers. 

You should not be asking yourself “what can I do to increase my customer acquisition rate”, instead you should be asking “what must I do to activate my prospects“.

So, identifying your Arnold Schwarzenegger is important.

 

 

Here’s how I’m handling an example with Flashissue.

Just to set the scene. We’ve just launched a new version of our email marketing tool for Gmail with a 100 or so customers to get some early feedback. While the general feedback has been good, the activation part can be better.

(If you are someone who already uses Flashissue to create and track your emails just substitute your name for Arnold’s name below).

Step 1: Create your customer acquisition funnel

Prior to thinking in terms of User Activation, I used to think, yippee we have a new user when someone like Arnold sign up and installed in Flashissue (i.e. #1 below) but that isn’t the best way to acquire customers.

This yippee turned into a “so what” once I identified our funnel because I realized that prospects stuck in #1 and #2 don’t pay the bills. Here’s our funnel:

  1. Arnold installs Flashissue
  2. Arnold creates a quick email and sends himself a test
  3. Arnold creates a mailing list and sends a real email campaign
  4. Arnold repeats step 3 and becomes a happy trial/free user
  5. Arnold pays for the product ($$$)

You can see that Arnold goes through 4 mini steps prior to becoming a paying customer.

 

Step 2: Find your point of User Activation

When I looked at our data and asked the question “What one thing does EVERY paying customer do with Flashissue prior to becoming a paying customer?”, the answer was obvious; they create a mailing list and send an email.

  1. Arnold installs Flashissue
  2. Arnold creates quick email and sends a test
  3. Arnold creates a mailing list and sends email  <==== USER ACTIVATION
  4. Arnold repeats step 3 and becomes a happy trial/free user
  5. Arnold pays for product <==== CUSTOMER ACQUISITION

While Arnold is at 1 and 2 in the funnel he is not going to become a paying customer. A lot of people remain 1 and 2’s and never make it to being a 3; they will therefore NEVER become a paying customer. Nice people but i need revenues.

When Arnold creates his first mailing list and sends an email he is Activated and now I know he stands a good chance of converting to a paying customer and saving civilization.

 

Step 3: Focus on tangible Activation plans

My goal is to now focus on getting Arnold to #3. My focus at this stage IS NOT to seek a paying customer. I put #5 out of my mind which sounds counter intuitive.

View it like this hypothetical example. Asking my prospective wife to have a child with me before I’ve even met her is weird. Meeting my wife-to-be first for dinner and doing the courtship thing (activation) is more conducive to getting the family off the ground than saying “hey let’s have a baby right now” when I first talk to her on the phone (acquisition).

I realized that unless we *activated* Arnold first we’d have no chance of getting him to pay for Flashissue, so this has become our hyper focus in the immediate term (yes, it’s work in progress and it’s iterative).

Having talked to 100 or so of our first time users I realized that we are doing some parts well and some parts poorly.

The way we let Arnold create his mailing list from his Goggle Contacts gets good feedback; he tells us that it’s intuitive and fast BUT other parts do not work so well.

It’s become pretty clear that Arnold will never even get to #3 because he gets confused at #2 i.e. he’s having problems creating a basic email and doing a test send to themselves.

Here’s the plan that we’re putting in place to fix the issue and increase Activation.

The test send part in #2 needs to happen lightening fast. During this step Arnold wants to see a sent email, click on it and view the report before he commits anything else.

He’s wants the warm fuzzy’s and to feel secure with Flashissue so he has enough trust in us to send an email a larger group of people he knows in the Alliance (aka Create list).

His current experience is poor:

  • Once he sends his test email he has no idea if it’s been sent because our sending reports are inaccurate and hard to understand.
  • Since we push Arnold to these reports to see if his email has been sent it would make sense to create a good experience.
  • We’re also taking too long to deliver the test email to his inbox – if it takes more than a few seconds he thinks its lost or never been sent and it’s hasta la vista to Arnie. He bails to go and do something more interesting like killing bad people and never becomes an Activated user.

Here’s the fixes we’re implementing:

  1. The send of a test email has to be instantaneous and should take a few seconds (a few code changes will do this).
  2. As a general improvement to our report screens we’ll be giving Arnie better feedback on the status of his emails. Instead of saying we sent zero emails so far, we’ll say “Sending in progress (10/230)”.
  3. Reports have to auto refresh so whenever Arnie takes a peek they are up to date.
  4. After a test send if Arnie has not created a mailing list we will ask him if he wants to create his first one. This will nudge him towards creating a mailing list and move him towards activation.

I’d like to be able to provide more actual data on all this but our data set is small at the moment.

What we do now have is our ACTIVATION GOAL which is key to getting Arnie activated and showing him the path to enlightenment by becoming a paying user. It also starts to answer the question “how to acquire customers?”.

I’ll report back with real data as we get it. Feel free to get involved yourself; i’ll be interested to get feedback – click here for Flashissue for Gmail.

 

 

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