My kiddo company (Hammer and Mop) currently stands in a decisive time period, working to prove its worth and making ambitious plans of growth. It took me a while to build a strong core team of complementary skills sets, and that allowed me to focus on what I do best. However, focusing on one thing often means you lose focus on something else. In our case, we won over numerous customers at the cost of proper financial analysis. An error we identified just in time, helping us recover and be stronger than ever.
We see two kinds of startups around us – first focused on sustaining operations at the cost of scale in the initial years while the second focusing on scale at the cost of profits. Not everyone is a Flipkart, not everyone is able to grow by making profits every quarter. Less than 2% survive, so how do we make sure that we do?
Win more, lose less.
Razor sharp focus on paying customers is a must; else you run the risk of losing money and paying for operations out of your own pocket. Winning customers over is easy- you and your company just need to be nice, good looking, polite, empathetic and truthful. Keep your promises, and your customers will fall in love with you. Communicate clearly and effectively, they will listen to your every word. It is not a one night stand with your customers, you need them for life. Focus on not losing them. You lose customers by lying, being rude, being outspoken, spamming, being selfish, by not keeping your promises, by being unhygienic (in all senses) and by being invisible. Win over customers, as many as you can. Do not lose valuable customers, except those who are too expensive to keep.
Get existing customers buying more often.
It is more expensive to acquire new customers than it is to keep your old customers buying more often. Also, if you give them great service, they convert into your brand evangelists (if you have built a brand, that is) and spread the word for you, free of cost! They do this because they are good people, they know that you are a good person too, and good things happen to good people only. How do you get them buying more often? Discounts? Naah! Acknowledge them, know their preferences, give them preferred service (quicker, prompter, better) and thank them every single time. Help them out with expert advice and be their go-to girl!
Higher quality and volume.
Be focused internally for growth and profits. Keep improving the quality of what you offer. Listen to your customers without spoiling them. Take their feedback, take your team’s feedback, mash it together and create the middle path that suits both. Make sure you’re still making money. Find a way to sell more. Decoding the rocket science – better quality means better pricing, more volume means more money.
Increase prices.
Pricing strategy is a must for growth in revenue. Once you have built trust with your customers, they will listen to your side of things (increased prices hurt their wallets, right?) without abandoning you. Plan it, structure it, make it seasonal if needed. Ensure your product quality and service offer more value than the increase in prices. Be visible, talk to your customers, explain why the rise in prices makes sense. Adjust yourself to market situation, purchase trends and customer behavior. Always give more than what you’re asking for, and you shall sail just fine.
People productivity, overhead reduction.
Also, while you’re focusing inwards, make sure your people are doing enough work per head to earn their salaries and more. Their time and energy should be channeled towards productive activities, and you are responsible for the same. Are you wasting time and money over irrelevant things? Mismanagement of office resources, rent for a large office that’s not being used, too much print outs, too much coffee, too much toilet paper? Cut down on unnecessary tasks, invite austerity and minimalism because that improves work culture, imbibes discipline and helps the environment. Efficient work force and lowered costs does help boost profits and makes you lean (and mean) for serious growth!
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Later this week, I will be writing about 5 more things to push us towards profits and growth. In the meanwhile, would love to know your take because you know your business best! Please share.
Thanks!