Five Lessons Learned from Our First 500 Customers

January 12, 2015

A few months ago, we hit a major milestone: our first 500 paying customers.

It had taken us about 18 months to get to this point. It has been a long, hard journey to build out an entire payroll software solution that could handle direct deposit, automatic tax reporting, year-end reporting and everything else a small business owner needs.

The fact is that with a product like payroll, there isn’t an MVP phase – you get it right, or you’ve gotten it all wrong. Nobody will forgive if you screw up their payroll because so much depends on us getting that paycheck right; the happiness of our customers’ employees and keeping the government off our customers’ backs.

In the process of getting to our first 500 customers, we learned a few important lessons we’d like to share with you, so that you can learn from our smart decisions and some of our not-so-smart ones.

1. We are in the customer happiness business.

Most of our customers are small businesses and startups. This isn’t an accident of market, message or geography. This boils down to choosing who we want to work with every day. We love small business owners, because we can totally relate to their struggles and successes.

Being the newbie in an uber-competitive industry, we’ve seen a fair share of challenges, after all, what makes Wagepoint so special? Why should they pick us when they had safer choices like ADP, Paychex, etc.? Would we be around in the long-run?

So, instead of worrying about the competition, we just focused on the one thing we knew we could excel at – making our customers happy.

Customers are the friends you can’t let down. Ever.

This almost obsessive focus had us responding to customer emails within an hour, late-night ticket resolutions, gift baskets, e-cards for coffee, and the list goes on. If it was within our power to do, we did it.

And sure enough, we started to see the results come through. Our customers were raving about how we simplified their lives, made payroll so easy for them that they didn’t have to go through the rigmarole of calculating deductions or tax reporting.

We want to be nothing short of AWESOME for our customers. We think about how we would like to be treat, how we treat ourselves and then just apply that same treatment to our customers.

2. It pays to know your customer.

Early in the days, it was about getting anybody and everybody to sign up for our product – small business owners, office managers, accountants, HR managers and CFOs. We assumed that every single business would need payroll, and sure, this gave us breadth, but we lacked the focus to become successful with any one group.

Obviously, the benefits that motivate a small business owner to choose a product is very different from what motivates their HR manager or their accountant.

After numerous meetings and calls, we realized that:

Small business owners want an easy-to-use solution they can afford, a solution that won’t break their bank and will not take too much time out of their day so they can focus on growing their business instead. They also wanted to talk to the people in-charge – somebody who could relate to their challenges, somebody who could understand what it took to get them so far.

Accountants wanted a solution that would work within their current processes, and if possible, it created improvements that could help them service their clients better. Many of them are tired of dealing with old-school payroll firms who often let their clients down when it comes to service.

HR managers wanted a safe solution; it wasn’t about price but more about the legacy, the trustability of the company as a whole. HR managers would rather work with our larger competitors even if their customer service is shitty.

So, we came up with our final target list i.e. 1. Small Business Owners 2. Accountants. We decided that if we got it right with targets 1 and 2, we’d achieve the social validation that would attract our third, less trusting target.

Takeaway: Know your customer, and focus on going deep instead of spreading yourself too thin.

3. You need a process to scale.

Scaling a business all comes down to building processes around your customer service. If you want your customers to have the best possible experience, it has to be something you can deliver on with consistency.

And consistency only comes with streamlining the process.

We mapped out the entire customer journey and used a combination of tools and people along every step of the way to create a successful customer experience. Customers can request a demo or sign up to start a 30-day free trial, in either scenario, our Customer Success Managers reach out with a personalized email and offer assistance.

During the time between the account creation and our customers running their payroll, our Customer Success Managers will occasionally reach out to check-in on the set up. It’s also a good opportunity to remind customers of our free “Switch-it” service, where we take care of the entire set-up from start to finish so that our customers just have to log in and process their payroll.

Customers can also reach out via our in-app support, powered by Groove. Our Customer Success Managers respond to all queries within the first hour – in fact 85% of our tickets are resolved within an hour. If a ticket is going to take longer to resolve, we aim to have it taken care of in under 7 hours.

This process has helped our team and our customers greatly – our customers have come to rely on our speedy responses and our team know exactly what to do every step of the way.

4. Happy employees = happy customers.

Building a company people want to work for is the foundation necessary to deliver consistently great customer service. One can’t exist without the other, and neither can exist without processes that are independent of the people running the company.

As a young startup without the trappings that come from having raised a shitload of funding, we have to be creative in how we create and build a successful company culture.

It starts by maintaining open lines of communication, right from the moment we hire them. We don’t believe in negotiating over salary – if our employees give us a price and it’s in our budget, we don’t counter with a lower price. We just give them what they ask for. It sets the tone for the rest of our relationship.

Our employees have the freedom to share their opinions on anything – our product plans, our management style, or anything else we do. Employees can be a part of any project they want if it interests them. Employees are also encouraged to work on their projects – whether it’s starting a print store or building apps for their companies.

Because we give our employees this autonomy and empower them to make the right decisions, we have been able to create a successful structure around our customers.

Tony Hsieh, CEO of Zappos, the online shoe retailer, is all about creating a structure and culture around his customers. Zappos (an Amazon subsidiary) is known for outstanding service, which is why they even moved the whole firm to Las Vegas, Nevada, in 2004 in order to soak up some of that customers-as-guests mindset.

They don’t have a department or team for service: their whole company is customer-centric, so any staffer who interacts with a customer is trained and empowered to do all they can to resolve any problems.

5. Don’t be afraid of feedback.

Don’t be afraid to drill down on what went well, what didn’t, and learn from every experience so you can do better next time.

Sainsbury’s supermarket in the UK got some constructive feedback from a girl aged 3 and a half years old. She didn’t think tiger bread looked much like a tiger, so with her parent’s help she sent a letter.

Instead of ignoring it, a customer support manager, Chris King, sent a reply:

“I think renaming tiger bread giraffe bread is a brilliant idea – it looks much more like the blotches on a giraffe than the stripes on a tiger, doesn’t it? It is called tiger bread because the first baker who made it a loooong time ago thought it looked stripey like a tiger. Maybe they were a bit silly.”

Consequently, they renamed it giraffe bread and explained why on signs in stores across the country.