New Page 1

By Stefania Aulicino

YouTube, Twitter, Groupon, and Zynga are members of a new club– “fastest from founding to $1B valuation” club, — Zynga, the social gaming pioneer, earned its membership in just 19 months.

Explosive growth is not confined to social media companies.
Costco (the membership warehouse retailer chain was the first company to grow from zero to $3 billion in sales in less than six years and today is $78 B in revenue.

Think of other fast growing companies you admire.
Disney, Four Seasons Hotel, Patagonia, South West Airlines, Harley Davidson, Green Mountain Coffee, Target, Legos

Why do all these companies grow so fast?
My interpretation is that successful fast growing companies leverage cheap customer acquisition models!
To be a sustainable growth company in the 21st century you need to build a cheap, scalable, automatic model to acquire customers

Please note: customer acquisition is NOT the same as sales acquisition.
• sales and marketing strategies are about how to get people to buy what you have to sell today
• customer acquisition is building a continuous pipeline of people who will buy
anything you can sell them today and in the future at, at higher prices, with accelerating frequency.

This distinction is a fundamental business model shift:
if the 20th century was product centric
then the 21st century is customer centric-
• In the old days, since companies created a product and attracted customers, to get more customers it was natural they developed more products.
• In the 21st century, companies create a community of like-minded people.
This community provides insights into what products they want to buy.

This is NOT at all limited to social media or on-line businesses. It’s a shift in consumer behavior in the 21st century that effects on line and Off-line business.

Think of Apple. Apple started as a little computer company. But it’s not a computer company now.
It’s the creator of the Apple community of raving fans.

Apple leverages a cheap customer acquisition models to make the sales process irrelevant!
Because Fans buy what Apple offers…today and in the FUTURE!

We can learn a lot from these fast growing companies about how to build a cheap, predicable, scalable customer acquisition model because they all share 3 common keys:
1. DEFINE your community
2. SHARE your passion
3. ENGAGE your customers
Let’s look at each building block

The 1st Key is DEFINE your community
Think of your circle of friends. The better people know you, the more valuable you are to them. Value, like beauty, is in the eye of the beholder

Value grows inside a community

Successful fast growth companies take advantage of the fact that creating Friends is Free.
DEFINING your community is the 1st KEY because a community unique to you contributes the “CHEAP” part of our client acquisition model; a pipeline of buyers.

Consider Whole Foods Market (which had $9 billion in revenue in 2010).
Here are a few ways Whole Foods creates their unique community:
• informs consumers about healthy food
• influences legislation on organic certification/labeling
• sales staff educate each store visitors
And here are a few ways Whole Food’s unique community is a source of cheap customer acquisition:
• redefines the problem to its strengths
• clear differentiation from competitors
• supports rationale for premium prices

The 2nd key is SHARE your passion.
There is currency in your passion

Share who you really are; be multi dimensional; be authentic; be passionate because that is what makes you special. Your passion is your unique intellectual property! No one thinks like you do!

When you pump your IP into your unique community as a passionate thought leader, you create an informed community of friends capable of providing critical market intelligent to help you define your best future and build your brand

Successful fast growth companies let an informed community of friends help package your passion for them to buy.
SHARING your passion is the 2nd Key.
An informed community of friends contributes “PREDICTABILITY” to your customer acquisition model; predicable because new products are what prospects want to buy which supports escalating price points and increased frequency purchase.

Consider Zappos (which was purchased by Amazon for 1.2 billion in 2009).
Here are a few ways Zappos shares its PASSION inside their unique community:
• authentic passion of “extreme” customer service
• culture of high human touch
• fun loving, WOW outrageous
• free 2 way delivery overnight with 1 year return policy and 24/7 call center
Here are a few ways sharing PASSION provide ZAPPOS a source of predicable customer acquisition:
• prioritize a proliferating product offering the market is ready to buy- from shoes to suits to handbags to sunglasses even kids’ merchandize
• reputation spread virally, through blogosphere
• 75%+ revenue from repeat buyers and word of mouth referrals- an “automatic” customer acquisition process

The 3rd KEY is ENGAGE your customer.
Know your customers like you know your best friends.
Customer concerns exist at 3 levels
1. known, spoken
2. known, unspoken
3. unknown, unspoken- secret fear
When you know your customer concerns at all 3 levels, customers experience that you understand them intimately.

I’ll use my own firm as an example to provide an example. Initially, prospects will share their KNOWN and SPOKEN concern. I often hear clients say:
“I’m not sure how to best grow my company”

Under that, I hear something else: the known, but UNSPOKEN concern prospect keep close to their breast:
“I have a fear of making a mistake.” A fear of making the wrong financial decision or a fear of pursuing the wrong growth strategy.

The most interesting concern I have learned about my clients is their UNSPOKEN, UNKNOWN—the SECRET FEAR.
“AM I REALLY ENOUGH TO GROW MY DREAM COMPANY?” This is a fear of success; a fear of the unknowns.

When you know the 3 levels of concerns your customers have, you can close the gap between your costumer’s wants and your solution

Successful fast growth companies treat Customers as Friends they know intimately.
ENGAGE your customers is the 3rd Key.
ENGAGING customers contributes the “scalability” to the customer acquisition model because customers sell themselves, and want their friends to have the same experience.

Consider AMAZON (with its $34 billion 2010 revenue):
Here are a few ways AMAZON knows its customers:
• knows what you purchased yesterday (customer’s spoken concern)
• relationship between purchases (customer’s unspoken intimate desires/fears):
o you are going on vacation
o looking for a job
o having a baby
• patented “one-click” buy now button
• Confidence-bolstering buying experience via consumer reviews, “look inside” books, guarantees
And here are some ways Amazon’s ability to engage customers as friends contributes scalability to its customer acquisition model:
• up-sales are fast, easy and lucrative
• 80% customer retention: customers share their satisfied experience with lots of word of mouth/ extremely high referral
• member discounts/super saver mailing/affinity group
• Amazon chooses how to expand its product portfolio based on buying patterns of existing customers, who keep coming back to buy different needs.

Fast growth companies in the 21st century are leveraging a cheap, predicable and scalable customer action model. These successful companies share 3 key insights we get to use too:
1st DEFINE your community
Because creating friends is free, and that contributes CHEAP.
2nd SHARE your passion
Because your informed community of friends tell you how to package your passion for them to buy, and that contributes PREDICTABILITY for customers today and in the future.
3rd ENGAGE your customers
Because customers deserve to be friends. And that contributes SCALABILITY.

It’s time to irradiate the need to SALE!
Instead, invest in a cheap, predicable, scalable pipeline for customer ready and willing to buy all your products today and tomorrow at higher prices and escalating frequency.

What is your experience? Tell me your story. I’d love to hear what you think.

Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: