A study conducted by Harvard Business School revealed that about 75% of all startups would eventually fail. A similar number of small businesses will fail in the first decade. The main reason why many businesses fail is their inability to attract and retain customers. There are a variety of business models out there, such as software as a service, marketplaces, and e-commerce businesses. Still, leaders need to make some common mistakes when trying to attract customers. There are various reasons why a startup might need more potential customers.
- Product Market Fit
A common reason businesses fail is their inability to attract and retain customers. A product’s market fit is the determining factor in building a successful business. The product will most likely succeed if it is designed to meet the target audience’s needs. According to Eric Ries, in his book The Lean Startup, building a minimum viable product is an effective way to test a product’s market fit. He said that by listening to your customer’s feedback, you and your team could find a product-market fit.
- Product Channel Fit
Another critical component that entrepreneurs need to master to build a successful business is the product-channel fit. A product-channel fit refers to a company’s marketing channels and the platforms it uses to promote its product. Depending on the type of business model that you’re operating in, your company might be a good fit for one channel and a bad fit for another.
For instance, if a company has a strong product-channel fit, it can quickly grow its offerings by using the power of organic search. This allows it to attract and retain a wide range of potential customers. An organic search might not be a good fit for an e-commerce business. It can be challenging for a company to rank well in a world where major media outlets and e-commerce businesses dominate the search results. An effective marketing channel can be found in social media ads, typically used by platforms like Instagram and Facebook, to find and engage ideal customers.
- Untrained Sales Team
A company must ensure that its sales team is highly trained to attract and retain potential customers. This can be done through the hiring of the best possible sales associates. The sales team is an essential aspect of a company’s operations, and they must be knowledgeable about the products and the market they’re in. With the proper knowledge about the market, it can be easier to attract and retain potential customers. To measure the effectiveness of your sales team, you should regularly compare it with the performance of other companies in your industry. If the sales team is not performing well, it might be a sign that the organization’s sales department is weak.
- Issues With The Ideal Customer Profile
Your entire team should know who your ideal customer is, and they should know how to identify them and find them using their psychographic and demographic information. These individuals should also be able to speak their language so they can effectively engage with them as sales representatives or marketing representatives. An organization needs an adequate internal communications plan (ICP) to create a compelling and practical customer experience.