Is every customer a good customer?

Answered by: Jason Pressman, Managing Director

Category: Marketing and Sales

The startup mentality is all about growth — acquiring as many customers as fast as possible. Customer growth matters, but not every customer is a good customer. That becomes abundantly clear as a company gets bigger. The type of customers that got you to the first 50 customers may not be the type of customers to get you to 3000. And that’s okay. To get from 50 to 3000 customers, it may be that half of the original 50 don’t survive. Not all the customers that get you through a phase are the customers you need to grow the business profitably. In some stages of a company’s growth any dollar may be the right dollar because it’s forcing you to refine your product, it’s forcing you to build out the capabilities you need. With time, you move on from those customers.

One thing to note, there can be a phase where the ideal customer profile is any customer. Or, over time, that ideal customer may change, moving from small customers to mid-size or even big customers. Anaplan realized it needed to relentlessly focus on the Global 2,000 to drive profitable growth. Once that became abundantly clear, the company aligned its marketing, sales, business development and customer success to achieve this. As an entrepreneur, you have to understand which customers will help you build a healthy business model as you continue to scale. It takes courage to accept that you may need to fire, or at least stop closing, a certain category of customers in order to achieve long-term success.