Why You Don't Need A Million Customers
Updated: Oct 16, 2020
Big businesses always put emphasis on building a huge customer base and reaching as many people as possible. However, simply put, you don't need to!
Many small businesses are wildly successful on a few really strong customers, not only is it a hugely cost effective model to have fewer customers but also you can build your relationship with that customer and potentially provide a better, more customised service.
An author called Kevin Kelly pioneered an approach to creator marketing back in 2008 called 1,000 True Fans. This concept was created before crowdfunding platforms like Patron or Kickstarter but outlined how businesses or digital creators can create a sustainable business model without garnering a large following or a huge reach over social media.
Now this may come as a shock to managers and business owners alike. What do you mean I don't need to reach as many people as possible on social media? That is the whole point of social media right? Wrong!
What is the 1,000 True Fans Concept?
The 1,000 True Fans theory can help businesses and creators generate sustainable income without spending time, effort and most importantly money on targeting the masses.
To be a successful business or creator you only need 1,000 true fans. A true fan is someone who will buy everything you sell, whether it is a book, a t-shirt, an online course, or even come to an event of yours. If you have roughly a thousand of these true fans or super fans you will earn enough to make a living.
Say you are a content creator with 1,000 true fans and you get each of your true fans to earn a profit for you of £100 by buying merchandise in a year. That is £100,000 profit over the year, and broken down that is a very sustainable business model for an individual.
The same can be said for businesses trying to grow their network. If they can get 1,000 fans or followers to attend your live event or buy your ebook and make £500 profit for each fan, that is £500,000 profit a year. For small businesses, again this is a sustainable business model. Then this can be scalable to larger and larger businesses too.
This math only works on two pretences though. The first being you need to earn that level of profit with each true fan. For some businesses this is easier than others, especially those with the adaptability to offer new packages, products or services quickly and with low cost, hence why this model lends itself to smaller businesses, individuals or creators. It is easier and cheaper however to offer your existing customers more, than trying to reach new ones.
The second pretence being that you have a direct relationship with your true fans. Not only will this make it easier to make your £100 in the year, but without other services taking a cut of your sales. Intermediates like music labels, publishers, studios, retailers etc will all charge you for their services and to avoid this, having a direct relationship with your fans in every channel is essential.
Why 1,000 True Fans?
1,000 paying customers or true fans is a lot easier to obtain than a million fans, especially when starting out. You may push for more and more followers on your social channels but actually it is much easier and more cost efficient to focus on the 1,000 paying customers, build your relationship with them, and market to them.
The reason why the number is 1,000 is purely based on how many true fans it would take to sustain your business model.
For example, if you were a Personal Coaching consultant who visited businesses to deliver coaching on a variety of topics, and you have 10 true fans or paying customers that were larger companies and each customer bought each training session you could deliver over the year and spent £10,000 per year, that again is £100,000.
Alternatively, if you were an artist wanting to sell your work with each piece costing £500, you would only need 200 true fans to make that £100,000.
The point I am trying to make is that the number of true fans will depend on your goals and your business offering. You need to ensure you can keep a close relationship with these true fans as well as offering them more and more that they can purchase.
I have worked for businesses who all they want is 10,000 Instagram followers because that's what everyone deems as a success on social media. However, the main areas of success will be focussing on the current followers they have and building the relationship with them and making them more profitable.
Especially with smaller businesses, this model can help understand why we use social media and how we market to customers and fans. Really understanding why we use social networks can help build relationships with our customers because after all, we are just people working with people, even today in such a digital landscape.
If you'd like to learn more about the 1,000 True Fans concept by Kevin Kelly check out his article here.
If you need help with your social media, marketing and sales or digital marketing then reach out to me here.