By spending money with you, customers become investors. Here's why customers are your best shareholders and your biggest advocates.
Each interview I've had in the past two weeks has asked a question about how some companies or outsiders believe that having a large pool of investors is not good for a company and is distracting.
I pondered my response on a number of occasions and then I reflected on comments from the founders of the JOBS Act (Sherwood Neis, Jason Best and Douglas Ellenoff) that crowdfunding is the democratization of capital and the publification of private companies.
They went on to state that when investors invest into companies through these equity crowdfunding portals, the investors become the best ambassadors to the company.
So the creators of the JOBS Act envisioned what really was going to happen, and for it to work, the relationship between the company and its shareholders would change. Since the entire world is being disrupted by this new crowdfunding sector, it makes sense that even the roles of companies and the relationships they have with shareholders would fundamentally change.
Attributes of the “Customer” From a Company Perspective
A company cannot survive without any customers. In fact, it’s often said the first customer the company receives is really investing in the company. Wow, “investing.”
So how does the company go about getting this customer, attracting new ones and managing them? The company employs a sales and marketing team to attract and maintain customers, and will also provide customers support. At my company KoreConX, we have invested heavily on attracting the best for each of these roles.
These individuals are responsible for learning about the needs of the customers today and tomorrow. Understanding what customers are looking for in a company and where the customers can be found is crucial to effectively marketing to them. It is important to demonstrate your thought leadership in your sector and why your product or service is better or unique.
It is truly amazing all the work we do to attract customers and maintain them. All of these activities are being managed by a number of tools such as HubSpot, Salesforce, and Lynkos that can manage all your activities with the customers and documents you sent, tracking tools to see if they read it, etc.. Companies around the world spend billions in this area because they understand that the more automation we add the better we are at serving our customers.
The justification for the cost or investment by the company is simple. Companies do all this so the customers will keep buying, and in essence re-investing in the company.
Great companies like Google have shown the world that every person is a customer and a shareholder that can eventually become your ambassador, and that is priceless to your brand and company.
Related Article: Co-Opetition: Cooperating with Competitors for Best Results
The New View of a “Shareholder”
The first investor in a company is often a customer who sees the great opportunity and the vision the company is building.
The problem is that companies see shareholders as a burden, and make no effort to apply the same logic or business sense as they do for their customer acquisition and maintenance. In reality, shareholders are even bigger brand ambassadors than customers, and should be afforded the same care and consideration. Since shareholders identified the company as being worthy of investment, and they have a vested interest in the success of the business, they will always be the best brand ambassadors.
Think of a time when you have either heard from a friend or told a friend the following: “Wow, Apple iPhone iWatch is a great combo and see all the great things it does, so often and talk about it so much you must own shares.” This implies that if you are a true brand ambassador you must be a shareholder.
Equity Crowdfunding and the Growth of Your Brand Ambassadors
In today’s social media-driven world, people are connecting on a much more personal level to businesses and/or products they are interested in. The emergence of equity crowdfunding presents an amazing opportunity for companies to capitalize by turning their loyal and dedicated ambassadors into shareholders and vice versus.
Because in today’s world they will be connected with you and your company and your team using all the social media properties that they can find you in so they can feel connected, they want to be cheerleaders for your company because they believe in what you are doing.
The interesting thing that companies have severely overlooked with shareholders is that these individuals invested in their company and did not receive a product, and that these individuals will sell more of your products/services than any new customer you attract to your business.
Companies need to apply the same principles they have for operating the front lines of their business to the way they deal with their shareholders. Spending time cultivating, converting, empowering and managing shareholders will yield exponential returns.
Which means you need to see them both customers and shareholders as equally vital to the company’s success and be vigorous in using tools like KoreConX. KoreConX provides you with the missing piece to efficiently and effectively bring the companies together with their shareholders, to manage them, empower them, connect them, and make them the best ambassadors of your company.
Equity Crowdfunding is about disrupting how things have been done, not just for raising capital, but for the creation of legal documents, due diligence processes, and most importantly how you manage those valuable new shareholders/ambassadors.
Related Article: Does Crowdfunding for Startups Actually Work?
So embrace the 50,100, 1000, or 4000 new shareholders! I’ve never known any company who does not want customers to help them grow their business. What is great about equity crowdfunding is that the more shareholders you have, the more Ambassadors for your brand, and the more new customers they will drive to you to help you grow your business.
I say welcome and embrace equity crowdfunding and make it work to your advantage.