Introduction

What our students and customers tell me is that we have more to offer than “just” amazing distillation technology, education, and recipe development. Whenever I speak to them about iStill’s journey into becoming a very successful company, and my personal learnings as an inventor and entrepreneur, the feedback I get is that – as they are also starting a company and becoming entrepreneurs – they’d love me to share what I learned and tell what decisions or policies we made at iStill to become so successful.

So here we go. I’ll attempt to create a few iStill Blog posts on the iStill Way of Doing Things. The decisions and policies we put in place, that not just helped create our success, but that proved to be essential for us finding our way forward. I’ll also try and add a few more personal articles on my personal journey as an inventor and entrepreneur.

Today, I want to start with an iStill policy we developed to select the right customers. Essential to us and – we expect – essential to any company. Please, let me know if you find it helpful or uninteresting, so that I can manage my time and your time accordingly.

The right customers: who are they and why they matter

What we learned at iStill – one of the most valuable things actually – is that we want to do business with the right customers. What the right customers are? The ones that are happy and able to do business with us for all the right reasons. And the ones that we are happy to do business with, as we enjoy being in a relationship with ‘m.

Why this is important? Because if you select customers that are not appreciating what you offer, you preselect for customers that will choose you for the wrong reasons. The result? Those customers will be unhappy. Unhappy customers – even if they are unhappy for all the wrong reasons – drain energy and are a threat to a company building up a good reputation.

The reverse is also true. If you dislike doing business with a party, be aware that you are entering into a longterm supplier-customer relationship. You need to be able to work with the other party. To communicate with them. To discuss things, issues, opportunities. If that is not possible at the beginning, walk away. Because if you don’t, you are setting yourself up for failure. Look for shared values. And if you don’t find ‘m, ask yourself: “can I bring value to a company that does not value what we have to offer?” or “can this organization bring value to my company, even though we do not have the most important values in common?” I’d say the answer to both questions is a sound “No!”

In summary, a lead can only become a customer if we are able to empower him with our technology and education, and with our attempts at establishing a long-term, reciprocal relationship. If the lead is able to empower us back by understanding how valuable that is and how much he is on board with our approach and offerings, we are all set to go ahead and move forward and create a customer out of him.

How we learned this

As a starting entreprise a company needs customers. As a starting inventor, I wanted to help create a strong, empowered, and vibrant craft distilling industry. The original approach? We sold our first iStills at cost price and only made money on the returning annual software fee. The thinking was that this would help the craft distillers get their hands on our revolutionary distillation equipment at as low a cost price as possible – further strengthening their position – while iStill would be so lean and mean that it could live on the small, yet returning income from our software conscription model.

Where we expected the industry to react with applause and appreciation, what we got was a relative surplus of nagging customers. Mind you: most customers were great and we still have amazing relationships with them, often spanning a decade or more, but somehow iStill, in its early days, was not good at always selecting the right customers. So we ended up with a few really bad ones.

When the iStill MT analyzed the situation, this is what we learned: by introducing revolutionary technology at cut-throat prices, one overly selects for price-sensitive customers. What our policy had done was help us select a substantial minority of craft distillers that were underfunded and not interested in our technology for the versatility and longevity it offers. Part of our initial customer base was insufficiently invested financially as well as personally.

This small yet vocal group did not really have the funds to start a craft distillery. They choose us for our low prices and not because of our technology and education facilities. Often, they were not invested personally either. They looked at our automation as an easy way to get into the craft distilling industry without them needing to create expertise, recipes, a business plan, and ownership over their future company.

“Underfunded and not interested in both our technology and the supplier-customer relationship that comes with it”; does that sound like a recipe for disaster? To us, in hindsight, it certainly did! We had just created a group of customers, about 20% of them, that were setting themselves up for failure, while willing to blame us for that outcome. Financially and personally underinvested people usually are also quite dramatic and entitled. Entitled to success. Entitled to support. Entitled to basically us having to run their businesses for them, as far as they are concerned. Business not going well? Can’t be their mistake, right? So it must be ours!

What we learned from it

Pricing needs to reflect both quality and technological advancement. iStill brings a revolutionary technology to the craft distilling industry that helps limit capital investment, while saving distilleries 80% on staffing and 75% on energy expenditure. That is valuable! And what is valuable is worth a higher price.

We raised our prices in order to make a healthy profit, while stopping the software conscription model. iStill realized it can only look after the industry if it looks after itself.

The results were spectacular! Since we raised our prices to a normal and more sustainable level, we have been able to only selected customers that want our technology, the longevity and versatility that it offers, the education that is included, and the long-term relationship both with us and with other iStillers. How we make sure of that? Each and everyone of you gets to speak to our CEO and not just to a sales person.

By changing policies to the extend that it allows us to select the right customers, we have become more successful. We have become more successful, because we now preselect for customers that are choosing us for all the right reasons. And those that “only want a quotation” and aren’t interested in talking to us about their plans and our solutions? They won’t become customers. Instead, they can take their drama and entitlement with them, and bother our competitors with it. We learned the hard way, that if the supplier-customer relationship does not start well, then it only goes downhill from there. And iStill doesn’t do downhill …

Any lessons for iStillers, the craft distilling industry at large, or entrepreneurs in general?

Select your customers carefully, as they are the ones providing the wider industry with word of mouth publicity. Good customers will be happy with what you offer, appreciate what you do, and help build a strong and lasting reputation. Bad customers will trash your reputation to hide their own failures.

Don’t do business on price point alone. If people will resell you at an undercut price-point you are doing them, yourself, and your brand’s reputation a huge disservice.

Only do business with parties were you can make a difference. Parties that you mean something to and that mean something to you. If you are not invested in each other’s success, and do not share the same intrinsic values, think again. If their gain comes at your loss or if they make you feel that your success comes at their expense, do not oblige. Toxicity sucks the energy out of any relationship.

Accept that there are people that do not think that you have anything good to offer. It is not your goal to convince them otherwise or to change their minds. Instead, consider success as having fun while making a living with your company. To us that means that we only do business on our terms. It also means one needs to bring something extraordinary to the market. Because that’s how you can find people that want you, and that are willing to invest in a healthy (both relational and financial) supplier-customer relationship … and that are extraordinary themselves.

Companies do not become successful because of the amount of profits they make with their products or services in a certain time-frame. Companies become successful, because the best employees work there with passion and dedication, because they are having fun at what they are doing while they are doing what they do best! That’s how the best products are made and the best services are provided on a continuous basis. That’s how you make a difference and can ask for a difference. Expect no less of yourself. And do not expect any less from your customers.

http://www.iStill.com