What Is A Strategic Customer, Why It’s Critical For Your Business + Case Studies

A comics of Superman holding an iPhone. Showing a comical Strategic Customer Example.

Working with startup CEOs and business development execs I’m often asked what is a strategic customer, what are the differences between strategic customers and normal customers, and why is it important to invest specifically in locating and engaging with them.

As with anything in business development, It’s not exact science and (unfortunately) strategic customers don’t wear t-shirts saying “I’m strategic”. Usually, a strategic customer is a game-changer for a startup in terms of their ability to grow, raise more money, etc. But they have other significant contributions. Here are four with examples.

1 – Reputation and Trust

A strategic customer is a company that can be a super valuable reference for your business. It’s the case study you’ll be bragging about on your website/pitches/pr/etc. It will help to build trust and reputation in your industry.

For startups this is extremely important, especially when trying to enter a new market. Being a cyber-security startup with the Pentagon as a customer means a lot for anyone who considers purchasing your product or investing in your company.

A good example is Shopify who is a strategic customer of Zendesk. They use Zendesk’s solutions for customer care and has been open about their excellent experiences with Zendesk, serving as a reference and helping Zendesk gain trust and reputation in the industry. Case study here. Chris Wilson, Shopify’s Director of Technical Support talks about the importance of trust in the video, and you can imagine the effect this have on potential customers who are hesitant.

2 – Long-Term Value – Money and Partnership

A strategic customer is someone who brings long-term value to your business. This can be in a clear form of recurrent purchases (vs. regular customer that may only make one-time purchases). But another important aspect is the ability to grow into a strategic partnership later in the game and have a mutual offering.

Salesforce started as an AWS customer and today they have a mutual offering – read here.

3 – Scalability

Strategic customers often have the potential to grow with your business, making them an important part of your growth strategy. It can be with growing number of users, or buying additional products / services.

Following on the above example, here’s another strategic customer of AWS – Netflix. Case study here.

4 – Feedback and Collaboration

Last but not least, and very important for startups in my opinion, are customers who are invested in your product/service and that provide valuable feedback. These customers are willing to collaborate with you to help improve your offering. Most regular customers may not be as invested or interested in providing feedback.

This is a tough one because there’s a thin line between getting feedback that leads to a better offering for more customers and one that leads to tailoring your product just for this customer.

But I’m a startup…

Now, you might think “but I’m not Amazon/SalesForce/hubSpot etc. so it’s not relevant for me”. Wrong. Just define your target strategic customers, realistically, in fit with your capabilities, and you’ll see that there’re many companies who will have a mutual benefit from being your customer (and the key-word here is mutual). I did it many times for clients at The Business Development Agency.

Getting strategic customers requires an investment and planning. It often costs more and takes more time to acquire a strategic customer than a regular customer, and so does engaging with them, but the long-term benefits make it worth the investment. The benefits are definitely significant.

I focused here mainly on B2B SaaS but if other examples from different markets can help you, drop me a line at lagon [at] bizdevagency [dot] com. I’ll be happy to assist.

#startups #StrategicCustomer #growth #amazon #salesforce #hubspot #netflix #shopify #zendesk #partnership #trust #reputation #scaleup #B2B #SaaS