What Mailchimp taught me about saying no to potential customers

Around 2012 I saw something really interesting on Mailchimp’s web site. I can’t remember it word-for-word, but they basically said something like this:

If you want a simple, beautiful DIY email marketing product, use us. If you need your hand held and want lots of support, go use Constant Contact.

They even linked you to Constant Contact’s web site.

Stroke of genius or pure madness? Why would any sane company link directly to a competitor and send them free customers?

If you look at Constant Contact and Mailchimp today, they’ve become really different companies. Yes they’re technically still competitors, but I’d say they’re more different than similar. I know the space well because I used to compete with both companies between 2006 and 2011, but I’ll save that story for another time.

Constant Contact is a $1B public company with a suite of products that includes email marketing, surveys, social media tools and more. Last time I checked they had about 700,000 customers.

Mailchimp, however, is a multi-billion dollar email marketing behemoth that’s private and funded from profit. They never raised one cent of capital.

They stuck to their guns, built an amazing email marketing platform full of sophisticated features that every day folks can use and launched a free plan that lets anyone send a few thousand emails every month.

Last time I checked, they had about 4,000,000 users. Yep, four million.

Even back in 2012 Mailchimp knew the exact kind of customer they wanted, but more importantly the ones they didn’t want. And they were happy to hand those potential customers off to Constant Contact.

So why am I even writing about this? Well, today I “pulled a Mailchimp” and referred a large (hundreds of employees) potential customer over to a competitor. They were interested in PeopleSpark, but I knew we weren’t a good fit for them. They were too big and I knew in my gut they weren’t the kind of company I wanted as a customer.

They would’ve happily paid us $36,000 per year for our product. But I couldn’t do it. I politely emailed them back and recommended another product for them. It’s in our best interest, but also theirs.

Sometimes even if you can hook “the big fish”, you end up regretting it. They generally need more hand holding. More support. They demand more features. And they can take your product, support team and stress levels where you don’t want them to go.

The lesson here is that all customers aren’t created equally and all revenue isn’t the same. Mailchimp knew that amazingly well from day one.

The next time it doesn’t feel quite right bringing on a new customer, think of the long term impact they could have on your business. If you don’t think they’re a fit, refer them to a competitor who can do a better job helping them be successful and explain why.

They’ll remember it and tell 10 potential customers about you anyway, so you still come out on top. But you’ll have a customer base that you adore. And they’ll adore you too.

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