They say- Customer acquisition cost is much higher than customer retention.
That’s true but applies only to the businesses that have already established themselves in the lucrative market.
What about the startups?
They’ve got to find the stepping stones in the first place, right? But the cruel truth is, most of the startups fail in doing that and here are the most common reasons responsible for the same:
A poorly structured business model:
One of the top reasons for a startup’s failure is an unfortunate shortsightedness.
This happens when the people involved in a startup fail to design a solid business model. In other words, they simply miss out on important aspects such as customer lifetime value or the cost per acquisition.
The result?
Well, they simply land up in situations where the cost to acquire customers is greater than the company’s ability to monetize those customers. This eventually leads to a failed business.
Not knowing your target audience:
Okay so, you have a solid business model in place but do you know who be targeting?
Do you have a clear idea of your ideal customer profile?
No?
Well, then that’s a mistake!
A failure to know the demographic and psychographic makeup of ideal customers may simply lead to a failure of your startup. So, it’s mandatory to know your ideal customer profile (ICP) and also to have a proper alignment of the same with the entire organization.
Setting unrealistic expectations:
The lucrative market that you wish to be a part of is no la la land! So, setting unrealistic expectations is not going to get you anywhere!
Customer acquisition can be achieved successfully if and only if a business sets up clear expectations with its target customers. This can be achieved through products and services that fit the target market and can help solve the problems of your target audience.
You ask us how that helps?
Well, the customers tend to be more supportive when a business’s product works well. So, that’s why you should clearly state what people should really expect from your business.
Investing in random marketing strategies:
This is yet another mistake that most startups make. They tend to jump on a bandwagon owing to the mentality- if it worked for our competitors, it’ll surely work for us!
Well, it’s time for a reality check. What works for others may not really work for you. So, instead of just following the flock of sheep, conduct a thorough research and find out where your target audience is spending their time. Dig deeper into their interests and find out how they communicate with each other or what events they attend.
This will not only help you reach out to your target audience in the most effective way, it will also help grow exposure to your business.
Failure in providing an exceptional customer support:
According to a research conducted by an American Express, an average person will tell 16 other people about a poor customer service experience.
Simply put, if you do not invest efforts and money into your customer support department, it’ll surely cost you, customers.
Want to know how?
All thanks to WOM marketing which can either be an asset or a bane to your customer acquisition strategy. Positive reviews can help drive more and more customers while negative ones can simply cause the other customers viewing your business in a negative light.
So, it’s advisable that you consider investing in a 24/7/365 live chat service. You can further make things convenient for your customers by offering an omnichannel customer experience.
Neglecting customer engagement:
Last but not the least, it’s a lack of engagement that may render all your customer acquisition efforts futile.
Startups cause the customers to perceive the company as a pushy advertiser trying just to sell their goods. Also, once they generate customer interest, they mostly don’t get back to their queries and cultivate delay. In other words, they are simply focused on selling and educating their customers is of least importance for them. As a result, the customers are left frowning as they do not feel valued.
The best solution to this problem is to reach out to the customers wherever they are and let them know what they are interested in. Further, it’s advisable to be consistent with the engagement.
Avoiding all these mistakes can surely help the startups survive in this era of harsh competition!