A startup should always keep this is mind. Making a new customer is much more difficult and costs much more than retaining an existing one. Hiring a new employee costs much more than retaining an existing one. Business is all about creating and then maintaining these relationships. In startups, we often to tend to concentrate on ‘acquisitions’. Acquisitions create growth. However, ‘retention’ is a more important formula for a business to sustain.
- Customer Relationships: At Beveragewala, in our initial days, we were only looking to acquire new customers and were totally focused on that. As we matured, we realised that repeat customers were nearly 70% of our monthly revenue month on month. We realised that besides having a budget for acquiring new customers, we must ensure that our existing ones are happy with our service and started focusing on how we could improve their experience and strengthen our relationships. We started taking constant feedback from them and acted upon it. We saw a steep growth in our sales, despite virtually no marketing budget. Our existing customers had started using our portal more frequently and also we saw organic growth in our customer base, i.e. the number of customers were growing with no marketing effort.
- Team Building: I cannot stop emphasizing how important this is. Building a good team is one of the most difficult challenges an entrepreneur faces in this competitive environment. Finding a new team member is an expensive and highly cumbersome task. Hence, it becomes imperative for an entrepreneur to build a strong culture and bond to ensure a motivated and long-lasting team.
We should always focus on building relationships to create a sustainable organization. This also includes strong relationships with all other stakeholders which a business may have like vendors, suppliers, lawyers, auditors, media agencies etc. The rule should as far as relationships should be ‘Create, Build & Strengthen’.
Originally published at etrlearning.blogspot.in on February 18, 2016.
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