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How This Startup Turned an Inventory Nightmare into a Customer Gold Mine

The founder of OrigAudio opens up into how he turned a hard-knock situation into 8,000 new customers.
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Editor's Note:The Grind is a weekly column that asks a revolving cast of young founders to dish on the daily rigors of running a business and how they've overcome obstacles. Follow The Grind on Twitter with the hashtag #ENTGrind

What's harder than acquiring new customers? Keeping them coming back for more.

Like many fast-moving startups, my audio-equipment company OrigAudio, doesn't always have time to come up with a long-term customer acquisition and retention strategy. Often, young businesses need to make the best of what they have and take advantage of every opportunity. We did just that.

We came up with, in my view, a genius way to win over 8,000 new customers, make our existing customers do a "happy dance" and gain massive exposure -- all without spending a dime in advertising. 

Last holiday season my Costa Mesa, Calif-based startup was hit with a big blow right before Christmas. Due to a port strike in Los Angeles, we had a container of speakers arrive five weeks late. The big-box store that had placed the purchase order, no longer wanted them, and we realized the product was obsolete to other retailers. We were stuck with a major disaster on our hands. Instead of getting completely discouraged, we came up with a creative solution to move the product. We decided to give away 15,000 of our speakers.

Related: How Much Inventory Does Your Company Need? 

In order to take full advantage of our situation, we decided to tie the giveaway into our four-year-anniversary, making it one big bash. The resulting two-week “Anniversary Promotion,” blew us out of the water. Within just a few days we were picked up by a ton of online publications, including Gizmodo and BoingBoing. 

While the free press was great, the best part of the giveaway was we acquired more than 8,000 new customers and also made 7,000 current customers happy. It was a win-win for us: We got rid of our inventory nightmare, acquired a lot of new customers and thanked some of our existing customers for being loyal.

While not every startup is not going to have a bunch of useless product unloaded, the customer-acquisition lessons we learned from the experience are universal.

Related: How to Generate Publicity for Your Business

Don’t be afraid of freebies. For a startup it might seem tough to give away products, but the payoff could be huge. Giveaways can lead to press opportunities, reviews or customer acquisitions. 

But before you decide to embark on offering up products for free, you should consider the cost implications of doing so. 

Related: The Power of Free 

Keep customers happy. While acquiring 8,000 customers was amazing, we needed to keep then engaged and wanting more. We did this by including a $10 gift card in every order shipped out to encourage a second purchase from our site.

If you have just one product, figure out different promotions and tactics to get the customer to purchase again from you. Maybe you work with a partner ? If your company is more established or perhaps it's about to launch a second product, try giving existing customers a chance to pre-order or get limited edition models. 

Any press is good press. Never underestimate the power of press. We had never heard of the blog BoingBoing but that doesn't mean it isn't influential. We sent them a message about our promotion, and it spread like crazy on their blog. Twenty-five percent of our new customers came from that site alone.

When you're on a budget and need to find customers, it's good to reach out to the press. News outlets and blogs are always looking for ways to keep their readers happy. If you've got a great sale, send an email to your favorite publication, and they may pass it along to their readers. 

Let us know in the comments below.