The survey revealed that 90 % of Indian Start-ups fails within 5 years. There are many reasons for this low success rate which require attention. My personal interactions and working with some of the start-ups for the last few months have given me the opportunity to observe it closely. Most of the start-up owners have high conviction on their products or services and are very sound in their technical knowledge. Still, they fail. While they have a great business idea and successfully create technically a good product, they often miss out in delivering the needed solution to the customers’ problem. Here are my 5 five recommendations on making sure of delivering ‘customer value’ hence, increasing start-up success rate through customer centricity.
Many business owners are overwhelmed with their business idea and want to sell it to almost everybody in the market. Anything, in this world of many choices, marketed to everybody, doesn’t resonate with anybody. Remember, small is BIG in marketing. Niche creates differentiation among crowds. Being niche is being a specialist. You need to be a specialist to solve your customers’ complex problem. Identify the customers with full clarity for whom you are building your business. Choose the most promising slice in the entire market. It doesn’t mean that other potential customers will not buy it. But you will build and position it for only your defined segment of target customers.
2. Know Thy Customer:
Once you decided to serve a particular set of customers, know more about your target audience.
Peter Fader professor of marketing at The Wharton School of Business and the author of the book “Customer Centricity” and “The Customer Centricity Playbook” says, “There is nothing called the customer”. You should pay attention differently to different customers. Focus more on those who have greater value for you. Digital technologies enable business owners to keep deep data of your individual customers. There could be a huge difference among customers even in the same persona. No business prosper by selling just once to a customer. Higher profits come selling and reselling a customer again and again and yet again in the customer’s lifetime or your business lifetime. Hence, you need to know precisely how much is a customer worth of, for your business, in your lifetime. Understanding of customer lifetime value (CLTV or CLV) will help you to prioritise your customers at an individual level.
3. Take a deep-dive:
This recommendation is important to all stages of the start-up journey but has very critical value at the initial idea stage in particular. Many of the start-up owners are so obsessed about their product and business idea that they believe they already know everything about the product and what it can do for whom. Remember you are not a typical user. Neither you are the only business around a particular customer. Knowing the customer need to which your product or service is going to fulfil is as important as knowing the full context in which the customer is going to use your product.
You must understand your customers’ social context where you want them to use your product or services. Understand it in full perspective at a human level in their real-life setting. Conducting a few ethnography research will help you immensely in this regard. Group your target customers under a defined persona.
4. Co-create Solutions:
Customers do not buy your products. They seek a solution to their problems. Whatever cognitive research instrument you use, customers always know the best way to solve their problems. Partner with them to solve their problem through the most appropriate product or service.
Ethnography research will give you deep customer insight on for what purpose they can / are using your product, how are they using it, when and where they are using it. What does drive or discourage them to pursue a particular course of action? Once you know those, design or revise your value proposition accordingly to match the customers’ context. Rework on your marketing communication plan to resonate with the customers’ context. Do not wait until the final ‘perfect product’ is to getting made. Take minimum viable product (MVP) to your customers and ask for their input to make it more appropriate for their use. Do iterations again and again till your customer and you are happy. Co-creating with customers not only improves the usability of the product but also keep your competition at bay.
5. Design Customer Experience:
The last recommendation is on overall experience in the purchase and delivery of the product. While many people can take you to the same destination, the journey is important. Overall customer experience, right from awareness to delivery and post-sales-service experience decides if the customer is going to buy again from you or not. Ultimately what people remember is a memorable experience. Map entire customer journey and identify all the touch-points, be it physical, personal or digital. Knowing your product and buying process must be easy and convenient for customers. Remember to factor positive emotions. Design a memorable customer experience at each touch points. Do not leave it on ‘by chance’. Choose to play around to improve customer intimacy and brand loyalty.