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Today on The Startup Chat, Steli and Hiten talk about identifying & focusing on growth customers.

In the startup world, it’s common to want to prioritize customers that pay higher for your products, however focusing on these customers might not be the best way to optimize your business, as this customers might not necessarily be growing.

In today’s episode of the show, Steli and Hiten talk about what a growth customer is, the 2 types of money that come into any business, what is negative churn and much more.

Time Stamped Show Notes:

00:00 About today’s topic

01:00 Why this topic was chosen.

01:15 Who is a growth customer?

03:45 What is negative churn.

03:54 The 2 types of money that come into any business.

04:09 Why you need to identify your growth customers.

04:40 Why growth is a really crucial criterion to measure.

06:45 How identifying a growth customer can help you prioritize.

07:43 What companies are truly trying to do with their business.

3 Key Points:

When most startups look at a customer, they just identify today’s needs

Negative churn is the amount of revenue that’s being lost that is made up for by the amount that comes in.

There are 2 kinds of customers that’s coming in - new money, and existing customers paying you more money.


Steli Efti.: Hey everybody, this is Steli Efti.


Hiten Shah: And this is Hiten Shah.


Steli Efti: And today on the Startup Chat, we wanna talk about identifying and focusing on growth customers. Here's the deal, in episode 399 we talked about how to create an ideal customer profile. The ICP, Ideal Customer. Today what I wanna briefly talk to you about and share with our listeners is the concept of a growth customer. And here's what prompted this. So I've heard and thought about this in the past multiple times and we went through a transition in our company of starting to think and focus and identify growth customers a lot more. But recently I was talking to a company, I can't quite discuss who they are, but their VP of sales had a much stronger focus on this than I've ever seen before and I felt that that was fascinating and interesting to dissect. What they're doing, they're building the sales organization. They're focusing on only selling to a specific type of customer. And one criteria that an Account Executive has to check off to even be allowed to sell to somebody is that they're going to be a growth, what they call a growth account. What that means is that whatever the needs is of the customer today is going to significantly grow within next 12 to 18 months. A simple example of this is today they have ... Whatever, let's say three people that work in their marketing team, would need seats or access to this product, but their hiring plans are so that the marketing team is gonna grow from three people to 11 people in the next 12 months, so they're gonna need 11 seats and they are a growing marketing organization. So, their criteria of selling, being able to close a contract and close a deal is that the customer, it doesn't matter how big the customer is. It can't stay still. It has to be a growth account. It has to be a customer that's gonna grow significantly over the next 12 months. I thought that that was very interesting, but I thought also that it related interestingly or usefully to our ideal customer profile episode of the, I think, this mindset that a lot of times, when startups look at a prospect or at a customer, they just identify today's needs, right? How big is the customer today? What is their use case today? What are the requirements today? One thing that a lot of startups don't do a good enough job is to identify how are these needs, these use cases and the potential revenue we can make with this customer? How is this going to change over the next 12 to 18 months and is this going to sta...

Key points in this episode

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