Young Entrepreneurs Panel with Babson Entrepreneurship Club
One of the most common challenges that startups often face is a customers. Not only it is hard to find customers, retaining customer relationships are challenges. Founders of Quick Key (Issac Van Wesep M’08), SynapseSEM (Paul Benson M’09), and Growth Spark (Ross Beyeler ‘09), spoke with the Babson Entrepreneurship Club on customer acquisition, customer conversion, and customer retention. Focusing on finding and retaining customers, the founders talked about the successes and challenges of their companies.
Customers are connected to almost every aspect a business, most importantly, to sales. Although most people would think that the relationship between business and customer is basically the business selling products or services and customer paying the business in return, our speakers indicated that the relationship is more delicate than that. They described that a salesman is a doctor to customers. Doctors diagnose problems that patients have. Then doctors prescribe solution based on their capability. If patients satisfy with results, they would refer doctors to their network in addition to build loyalty towards doctor. Entrepreneurs, too, find customer’s problem and serve them accordingly with their unique value proposition. Satisfied customers will come back and become loyal to the business.
What these three founders did at the beginning was to find own niche. The only way to compete against other players as a newcomer to the market is to have a sustainable competitive advantage that competitors cannot easily copy. Once you become the best in your niche, customers with specific needs will look for your products and services.
Companies expand its customer pool as more and more customers come to business. At some point, there is time when a business cannot serve and satisfy every single customer that is looking for the product of service. Businesses “fire” customers, meaning they only accept customers who are the best fit based on what they offer. It is rather positive to reject customers out of the circle. The reason for firing your customers is to locate your business in the market where you want to be. In the market, customers are more look alike thus it is easier to focus on your niche.
Understanding and managing customers is crucial for businesses. The three panelists are working in different industries yet they share a common philosophy. Entrepreneurs focusing on selling in the beginning stages are not using their time properly. It is not about selling but about customer discovery. Remember the doctor-patient analogy and apply it to your venture.