Many businesses hope to garner big customers. Often, however, it’s a “chicken and egg” problem. You can’t get big customers unless you are large and already have big customers. As founder and CEO of three Silicon Valley companies bringing innovations to conservative industries like financial services and healthcare, I faced this challenge multiple times. Here’s what I learned.
Understandably, big companies want assurances that you can deliver and don’t want to risk their reputations on a small business. They worry that if they become dependent upon a small business, then they might be on the hook to bail it out of financial difficulties. That’s why there’s the old saying, “No one ever lost his job buying from IBM.” Risk-averse managers in big companies will avoid buying from a small business unless you can convince them otherwise. Here’s how.
- Deliver big time.
Nothing substitutes for performance. Show how your product or service stands out. Demonstrate a 50 percent or better improvement in performance or cost-effectiveness for what you offer compared to your larger competitors. You must offer a big benefit to overcome the perceived risk of working with you.
For example, a Silicon Valley startup developed a faster way to transfer information across the Internet. It was proud of a 30 percent improvement. Unfortunately, the big companies it wanted to attract wouldn’t buy. In that market, customers wanted to see a doubling of performance before they’d consider switching systems and working with a smaller provider.
- Get testimonials from big players.
Big companies want to see that other big companies have purchased. So, when I’m marketing to a Fortune 500 business, I make sure that I have a slide that shows the corporate logos and testimonials from other Fortune 500 businesses.
If you don’t have big customers already, you can get endorsements from third parties that the big customers respect. For example, trade magazines often review and rank new products. Submit yours and make your case for why you’re the best. You can also contact editors to be sure that they mention your firm in feature articles. Writers particularly value concrete case examples where they can interview your customers and get specifics on how the product or service made a difference.
- Partner with big players.
One way to look big is to surround yourself with big players. For example, Microsoft, Oracle, and other big software vendors certify solution providers. When a small company shows one of these big names on its brochures, prospects perceive added credibility.
Look for big name suppliers who can add credibility to you. Include photos of you with their executives in your newsletters and brochures. This is a win-win opportunity.
- Prove your financial strength.
This is a tough issue for many small businesses, especially if they are closely held companies. Big customers want financial security. Small business owners don’t want to reveal their finances.
One approach is to secure a standby line of credit from your bank. Rather than having each prospect check out your financial viability, a large line of credit assures them of your financial strength.
- Market to the top decision makers.
Buyers who are at the lower levels of an organization don’t have the authority or don’t want to take the risk to buy from a small firm no matter how innovative it is. So, don’t waste your time at that level. Connect with decision makers as high in the organization as possible. Find connections through LinkedIn, alumni associations, and conferences to get a warm introduction and make your pitch.
Once you gain several big customers, the momentum will accelerate your growth.
Copyright © 2018 Don Maruska