Culture fit applies to customers as much as employees
In today's episode, Mattias talks about the difference between having many small customers and few big ones.
Beginning to find customers
It's quite usual for the founders of companies related to the service or agency business to bring in some customers at first. The founders usually have a background in the industry and convert previous contacts into those first customers. These are often relatively big.
Growing the business in a healthy way
In iGoMoon's case, no customers were brought in from the founders. They started at zero and spent a lot of time cold-calling and knocking on doors. This approach led to about 200 customers after the first two to three years. However, those customers were almost all one-time customers who purchased a prepackaged WordPress website deal. This meant that, once the website was built, they would only continue to pay for hosting, backups, and occasional support, but they wouldn't generate any more substantial income for iGoMoon. In addition, those companies were predominantly small businesses without much of a marketing budget.
However, in retrospect, this situation actually turned out to be positive for iGoMoon. The company did not rely on only a handful of big customers, which enabled them to thrive and grow their sales skills and generate new customers.
The risk of focusing on a few big customers
Having a single customer causing a big part of the revenue can be very negative once you lose them - this is an experience Mattias, unfortunately, had as well. Only having a handful of more significant customers generating the majority of a company's revenue is very likely also an unattractive trait if you're planning on selling your company at some point.
Another problem that Mattias sees when only working with bigger customers is that they might take advantage of you and your staff at some point. He explains that behind a company's logotype are real people, and while some of them have the best intentions, others may not. For example, a customer could be aware of how much you need them and will start to try getting lower prices, demand free services, or even mistreat your employees.
The last point makes Mattias emphasize once more how important a culture fit is not only when hiring employees but also when taking on new customers.
💡 EPISODE TAKE AWAY
Be careful that you don't depend too much on a handful of customers who might take advantage of you and your staff.
Do you know which customers to focus on? Let us know if you want to hear more about Mattias' journey of finding customers which are a good culture fit.