Whatever the reason, starting a business is one of your greatest achievements in life, whether you did it because you always wanted to or because you saw an opportunity to tackle a particular problem. But no matter how thoroughly thought out or well-planned your company plan is, maintaining it and being able to compete and outgrow your opponent is a much harder issue.
With ever-evolving technology, the corporate world has entirely altered and is still developing today. Because everything is now so readily available thanks to the internet, consumers are becoming more sophisticated and have higher expectations.
One may argue that the cost of obtaining a consumer has decreased as a result of the Internet. Unfortunately, I can't say that I concur. You may refer to me as a critic or a pessimist for the same. However, aren't consumer demands and competitiveness growing daily?
To gain clients today, it is not enough to just develop an excellent solution (product) and spread awareness of it among the public via television, newspapers, banners, etc. The number of platforms you need to be present on today only to spread the word about your product goes on and on.
You must repeatedly market to the same audience to stay in front of their eyes and ultimately persuade them to purchase your goods because the level of competition is rising. And what makes it (generating leads or beating the competition) extra harder is the fact that thousands of other businesses (including competitors) use the same platforms, some of whom are much bigger (in terms of resources as well as finances) and may even have a better product to offer. Thus, it is becoming more difficult for a start-up or small business to expand quickly and turn profitable or scale faster. Research shows that 20% of small businesses (startups) fail within the first year, 50% fail by the end of the fifth year, and 80% fail by the end of the tenth year.
P.S: source - https://www.bls.gov/bdm/us_age_naics_00_table7.txt
Thus, you encounter different challenges every other day as a small business or startup owner. The best thing is that you are always up for a challenge because you are an entrepreneur, which may be why you are reading this. And hence in this article, we have laid down some core strategies that small and medium-sized businesses or start-ups can employ in today’s business environment to succeed.
Key strategies to grow the business or a start-up
Before developing any approach, the foremost step is to recognize and define your difficulties and challenges. So let's start by discussing some of the main challenges that are unique to small businesses.
3 Major challenges that almost every small business faces – based on more than 10 years of experience
1. Limited resource:
If your company is small, you won't just have a small budget; you'll also have a small pool of human resources, especially talented and high-quality ones. And that is one of the reasons small businesses and start-ups primarily focus on raising money, right? Yes, you can raise money on a tight budget, but it's easier said than done. It takes time and depends on a lot of things including the business idea, its sustainability, the industry in which you operate, and above all, you will need to grow your business to a certain level to win investors' trust. And hence, it becomes much more important for you to manage your limited resources very effectively and efficiently to sustain in this competitive era. This is another challenge for a small business, but we will look into how a business can manage its resources efficiently later in this article.
2. Lead generation:
By lead generation, I mean sales-qualified leads, not just lead generation. Even if you are offering an excellent product at a price below the market rate, lead generation is one of the biggest challenges that the majority of small businesses or start-ups confront. It is certainly possible that you are facing these challenges due to the limitation of resources but nevertheless, there are ways you can resolve it to an extent or mitigate this issue and we will cover a strategy that can help you tackle this challenge, later in this article.
3. Management and administration
If you are the owner or in a managerial role at a small business or start-up, you are aware of this. You would concur that the inefficient use of available resources is hampering your company’s ability to grow. And somewhere managers and owners of large enterprises/grown businesses are able to manage the resources at their disposal far more efficiently and effectively.For example, in your company’s earliest stages, you may have had questions about business structures. You may have had to Google “tips to start an LLC in California” to know how to set up your company.
Being a manager or owner yourself, I am aware that it will be challenging for you to accept this. However, please take note of one very crucial fact, poor management or administration is in no way attributable to your abilities. What I mean here is that, yes, a manager at a large enterprise is managing better than you because he is focusing and devoting his time to the things that matter most like strategizing, planning, and making himself/herself aware of the market and opportunities. Why is this the case? It is because they are using the right tools and technology to help them do so. It is very imperative in today’s business environment to take advantage of automation and technology to achieve speed, accuracy, and efficiency to be able to compete specifically with large enterprises. Now, it may incur that isn’t this challenge also related to the limitation of financial resources, and yes, to an extent it is. However, there are some really good tools in the market that are affordable as well (for small businesses or start-ups)and can help you achieve speed, accuracy, and efficiency. If you are facing this issue, do not worry we will let you know a few such tools that you must try, they will help you automate a lot of your workflows and help manage things efficiently and effectively.
One thing to keep in mind here is that if you are not encountering these difficulties but are still unable to expand your company, it may be because your product is not the right fit for the market. If so, I advise you to conduct a round of interviews with potential customers, known as "customer discovery." In fact, this is a routine procedure that every company should follow in order to recognise changes in customer expectations and match corporate goals with those of the target market.
Coming back to the topic of developing a plan for faster growth, the best approach isn't some mystical wand spell like "Avada Kedavra" (I hope you are a fan of Harry Potter, too), but rather the tried-and-true advice to concentrate on winning over customers by being customer-centric.
Although it may be a little daunting to hear, the majority of businesses continue to ignore it or are not customer-centric at its core. There are companies that would proudly proclaim, "We are customer-centric," educate their staff members, train them to be such, and even start thinking of themselves as such, but in reality, they are not. According to research conducted by Semrush, only 18% of businesses focus on customer retention. If you consider your business to be customer-centric then, I would advise you to review your accounts to see what percentage of resources (money, people, technology/tools, time & efforts) you dedicate to retaining existing customers as opposed to obtaining new ones. This will help you determine where your present focus is.
And guess what? By employing customer-centric strategies, over time, the aforementioned difficulties can be reduced and eliminated. Want to know how? –
Customer retention- a game changer for small businesses and start-ups
Acquiring a new customer can be five to 25 times more expensive than holding on to an existing one. - Harvard Business Review
A 5% increase in customer retention can increase company revenue by 25% to 95% - HubSpot
I do not want to bore you with statistics and data showcasing the numerous benefits of customer retention strategies, if you want to know more, you can refer to this article “What is customer retention and why it is important for your business”. However, what I primarily hope to achieve with this article is to help small businesses and start-ups strategize and build processes around this goal and overcome the challenges aforementioned and grow faster.
Before proceeding further on to the same, I would love to share a small story about us, Corefactors, which will help you understand why this article and also set the pretext for what we are going to discuss further. Corefactors started in 2013 with just 2 people and no investment, offering a very simple service of “Bulk SMS” Service. For the starting 3-4 years we struggled badly, not only did we lacked a well defined vision for the business but also what we observed was that even though we were acquiring a good number of new customers every year, we were not growing more than 10-12% yearly even after putting in all the effort. And initially we felt it was because of the limited resources we had. But later in 2017-18 when we saw the profits declining, we decided to dig deep to understand why we couldn’t grow fast and our future course of actions. And that is when we understood that the major cause of our failure to grow fast was that we had always been focusing on acquiring more and more customers and we never tried to understand them and aligning our business with their needs and changing requirements, in short customer retention was never the focus. In 2018-19 we redefined our vision and started focusing on employing customer retention strategies. In FY '19 we grew our business by 110% and currently our retention rate is more than 80% contributing more than 60% of overall revenue through referral and package upgrade/renewal and we aim to achieve 100% retention and grow by 250% in FY’24 . That is the power of a customer-centric approach. And hence below in this article we have formulated strategies and processes that were applied by us and showed great results.
What customer retention strategies the SMBs or start-ups can implement and how?
First and foremost, businesses need to understand that today customer retention starts even before a customer makes their first "genuine" interaction with your business and not after he purchases your product or service. Therefore, you must ensure that your team's focus should be on producing a wow factor for each prospect/customer at every touch point when you define standard operating procedures (SOPs) for revenue operations teams, which include sales, marketing, support, and success. Let’s explore how to create wow factors for customers:
1. Know your customers
According to the 2022 Gartner Customer Service and Support Survey, 71% of B2C and 86% of B2B customers expect companies to be well-informed about their personal information during an interaction.
The more you know about your customers the easier it is to enhance their experience at every touch point. Hence invest in knowing about your customers in-depth and create a buyer persona. For example, if you are a B2C company, then know about their interest, challenges, where they work, their job profiles, how much they make, products and apps they use commonly, their stage of life, whether they are introverted or extroverted, whether they are a family person or social person, are they price sensitive or are they quality driven, etc. Similarly, if you are a B2B company, then you need to know customers' business processes, the journey that their customer takes, the tools and software they use, the size of the business, etc. apart from knowing in-depth about the decision maker.
2. Optimize content to make it customer centric
Optimize content based on the information collected about customers across the channels like social media pages, websites, blogs, webinars, and apps, as well as offline marketing materials like flyers, booklets, etc.
Create genuine content on how they can solve the issue either by using the product or service you offer or with the help of any third-party product or service that is best suited to them. Keep them updated about the latest trends or technological innovations that can add value to them irrespective of whether it is related to your industry or not. Many businesses focus on sharing news, updates, or issues related to the industry they operate, but we have personally observed a higher engagement from customers on content that were not related to our industry but added value to customers. This not only helps in enhancing existing customer experience but also helps in generating prospective customers. Additionally to get the best results, start ensuring that your sales and customer success team is also well aware of these contents and use it to their advantage while interacting with prospects and customers respectively.
3. Create emotional bond, personalized the experience
Whether you are a B2B company or B2C company, the buyer of your product or service is a human, and humans have emotions. And there is nothing better than if a customer gets attached to your brand emotionally. To create an emotional bond with your customers you can bring in practice below:
- Actively listen to your customers be it feedback, reviews, social mentions, or PR. Respond to them at the earliest possible, preferably within an hour. If the customer has raised some issue that requires time to resolve, then accordingly communicate the same to the customer. If a customer shares positive feedback, appreciate the same and promote it.
- Also, actively follow your customers on social media platforms and engage with their posts. And whenever they share some achievements or any good news, congratulate them and go ahead and ask them how they achieved it or something along similar lines. The way we respond to people’s positive/good news is among the most impactful relationship builders. Active constructive responding creates a joy multiplier as you are helping storytellers experience more positive emotions.
- Personalized communication: 80% of customers are more likely to give their business to a brand that delivers a personalized experience. In order to personalize the communication, use a conversational approach to engagements no matter what channels you are engaging. Another thing that you can bring into practice is to collect feedback regularly. Also, you can use messaging apps to build interactive and engaging experiences. According to a Zendesk messaging report, messaging apps earn the highest customer satisfaction score of any channel, with a CAST of 98%. In order to send personalized bulk SMS or WhatsApp on the go, you can try Corefactors bulk messaging service. We offer up to 1000 free SMSes and charge 15 paise per SMS and 58 paise per WhatsApp message only.
- Above all, since sales and service teams are customer-facing, train them to deal with customers' different emotions- happy, angry, or upset and avoid pushing to just do the sale or upsell.
- Lastly, if possible, stand for a cause as 70 percent of consumers want brands to take a stand on social and political issues.
4. Be easily accessible
As mentioned earlier in the intro section of this article, it has become increasingly important to be available across multiple channels and let customers choose their preferred mode/channel of communication. It also helps create brand awareness while making sure that your business is right there wherever customers need your product or service. By being easily accessible it also means that your customer should feel easy to reach out to you in case of any queries or complaints or feedback. Many brands use AI-based chat systems or complex IVR for customer support. Though both the solutions are good to have and were brought in place to make customer support easy and accessible, however, many a time we have observed that it becomes a cause of dissatisfaction by making getting the solution tougher. Hence at Corefactors, we focused more on Phone calls, SMS and WhatsApp. Corefactors Support Box (a ticketing system) uses a sticky agent concept and automatically routes the customer call or SMS to the right agent within seconds. Customers like it more when they can speak to another human plus they do not need to repeat the same thing again and again as calls/ SMS get connected to the same agent who spoke the last time. If you want robust customer support software at an affordable price, you can give it a try, it makes customer support very smooth.
5. Leverage tools and automation
This is the most important ingredient to successfully implement the above practices at scale. Whether it is optimizing content at scale, or personalizing it at scale, or being omnichannel and easily accessible, you need to enable your team with the right tools. There are multiple great customer relationship management tools available in the market like Salesforce, Zoho, Leadsquared, Zendesk, Mailchimp, Marketo, Freshdesk, etc. that can help you manage customer relationships efficiently. However, there are two major issues with these tools, one is that they
are way too expensive for a small business or startup and second they enable different teams with different tools which create silos between teams. Research shows that businesses operating in silos invest somewhere between 6-8 working hours a month just in collaboration between teams and then also struggle in aligning teams towards one goal of enhancing customer experience. Hence, we re-invented ourselves with the changing time and created an integrated RevOps-enabled AI CRM that uses the power of AI and automation to align complete revenue operation teams be it Sales, Marketing, Customer Support, and Customer Success teams on one platform only. In Corefactors AI CRM the output of one department is automatically shared as input for another which helps in keeping all team members aware of past interactions with the customers, plus it helps you capture a 360-degree view of what is happening across the customer lifecycle starting from lead generation to customer retention. And the best part is, it is very affordable.
6. Appreciate and reward loyalty
Less than 8 percent of consumers say rewards aren’t at all important to their purchasing decisions according to Wirecard research. And 57 percent of consumers spend more on brands to which they are loyal, according to Accenture. A Few things to note while creating loyalty programs are that it should be easy, genuinely rewarding, and most importantly transparent, or else loyalty programs do not succeed.
The best strategy for faster growth
The best strategy for growth is customer retention strategy which is driven by building strong relationships with customers and treating them as humans and not numbers. And it is not complicated or requires huge funds or effort to implement it. You can achieve it by choosing the right tools and setting the right vision & Mission and adopting the right set of Standard Operating Procedures (SOPs) aligned to the vision and mission. P.S: We would love to know your take on this, please feel free to share the same at marketing@corefactors.in