Everyone is searching for the magic recipe for acquiring and retaining customers. I’m here to tell you, one does not exist. In all actuality, it’s becoming increasingly difficult to influence consumers’ buying decisions (as a company). Rather, you have to establish and nurture relationships with your prospects and customers—which isn’t an easy feat.
The first step is to gain the trust of these prospects and customers. To be frank, no one is ever going to buy from a person, let alone a company, he or she doesn’t trust. There are a number of ways to gain the trust of your customers, one of which is transparency.
By sharing problems you may be facing, or even financial numbers (whether good or bad), you can build a large following of loyal customers. Let’s take a look at two companies who chose to be radically transparent, and how it’s helped them achieve rapid growth.
Buffer: Gaining Customer Trust to Improve on Acquisition Rates
Buffer is notably one of the most transparent companies today. A social-media-management tool, Buffer is dedicated to helping people publish, schedule and analyze their posts on social media. Coming off another round of funding (around $60 million to be exact), the company continues to gain more registered and active users. It owes much of its success to its value of “default to transparency,” a commitment to making nearly everything the team does as open as possible, both inwardly and outwardly.
It all began when Buffer disclosed employee salaries and equity on its website. Although terrified to embrace radical transparency, founders Joel Gascoigne and Leo Widrich saw a unique potential to empower and inspire a team (and that excited them more than any fear could stop them).
You may be asking yourself, “How does company and employee transparency influence customer acquisition?” For one, by being open about everything—seriously everything—they rapidly gained the trust of prospects as current users. “Being open and transparent about how we compensate our team breeds trust amongst all people involved,” Widrich said to Fast Company, nothing that this included “other team members, users, partners."
What’s more, their adoption of transparency has become the company's competitive advantage. While their social-management tool attracts various individuals and businesses, their content is what helps onboard users. Buffer’s bread and butter are lean startups and small businesses—many of which find its tool because they’re looking for an inexpensive (or free) social-management solution. But many companies stop there. By providing transparent information on how Buffer operates its business from salaries, revenue, pricing, books their reading and code they use, it provides lessons and plays dealing with tangible business growth.
Buffer’s transparency isn’t just building trust, it’s building companies.
Groove: Improving on the Nurture Process to Grow Customer Retention
Another software company dedicated to providing a scalable solution for startups and small businesses, Groove creates help-desk software that helps teams provide personal customer support. While Buffer’s blog and transparency values extend more toward providing the context and foundation for businesses, Groove’s is a journey that keeps readers, and customers coming back for me.
In what began as a goal of $100,000 in monthly recurring revenue, Groove chose to share its journey from “aha” to “oh shit” moments that nurtured growth. According to its CEO and founder, Alex Turnbull, “[Groove's blog covers] the lessons we learn from our own experiences, including our tests, outs wins and our fails, backed up with real numbers. By sharing every intimate detail of success and failure, Groove has surpassed its $100,000 in MRR and is on the road to $500,000 in MRR.
Although customer acquisition and education continues to be a main focus of Groove, the company has recently added a third vertical to its blogging strategy: customer retention. To achieve this, back in February the team launched another blog, The Groove Report, dedicated to pulling the curtain back on what it's working on.
In the past, the company had a good deal of push-back from customers regarding a number of instances reflecting issues such as product updates and feature retirements. While I’m not positive if it was a direct result, the Groove team now details every product update, integration, enhancement and overall product-status updates.
Additionally, Groove provides the opportunity for customers to share what the company could do to the make the product better and stronger for them. Turnbull attributes relationship nurturing as key to the success of a business. “Your product matters. Your customer relationship matters more. When your product fails, your relationships will save the business,” he says. “Focus on building great relationships with your customers, so that they’ll be understanding and forgiving when you need it most.”
By adopting transparency and honesty, Groove has been able to nurture incredible relationships with understanding customers who keep coming back for more. In fact, Groove’s openness is not only retaining customers, but also helping them build better and stronger software.
What is your take on radical transparency for business growth? Leave us a comment below.
Topics: Growth Acquisition