Start-ups are glorified as the new way of taking control of your life, foiling your 9 to 5 jobs and throwing them in the garbage. However, according to the Small Business Trends, only 40% of start-ups are profitable and 30% are at break-even point with 30% losing money.
You might be having second thoughts on your big idea! Dive into this article as we unravel the true Kryptonite of your Super idea and how Customer Relation Management (CRM) can change that for you.
What is CRM?
Customer Relations Management is a business strategy that integrates various prospects of customer relations to deliver value to the customer and retain the same for companies. With IT solutions, rich customer relations can be achieved and utilized to establish brands.
CRM helps one understand the target customer, customer needs, and how to sustain that consumer relationship to propel your start-up on that basis. There are three types of CRM:
This is a CRM based on providing value to customers, better than the competitors and integrates the same in product development and structure of the business.
This CRM focuses on the automation of production, sales, and service as per the requirements of the consumers.
It is focused on receiving, storing, distributing, integrating and analyzing consumer data to provide value to both customers and the company.
There are many models of CRM and here we are discussing the IDIC model. IDIC model helps you ascertain the high value and loyal customers towards your brand.
- Identification: who is the company’s customer and how to understand them well.
- Differentiation: identity in which customers have great potential and have more prospects in the future.
- Interaction: with customers makes sure the company can understand customer desires, customer relationships with other suppliers and brands.
- Customize the types of offers and means of communication to ensure that customer desires can be fulfilled.
Now you know what is CRM and so we can move on to five reasons why you should stick to it.
Cash Crunch– Kryptonite to Your Super Idea
According to Small Business Trends, about 29% start-ups fail due to cash crunch and 18% amounts of pricing or cost issues. It is vital for a start-up to keep the pricing compatible and yet generate enough profits or cash to keep the krypton of cash crunch away. CRM can help understand customer buying patterns and choices to integrate the same in your product development rendering competitive pricing with good revenue.
2. Poor Customer Relations:
Customer relations are the backbone of any business. Start-ups especially are more consumer-based, and this is where more and more start-ups need CRM strategies. From all the start-ups that fail, 17% start-ups are those who failed to deliver a user-friendly product and 17% amounts of start-ups with an inappropriate business model for their product. This data shows the importance of CRM in developing a consumer-based business model that can develop a user-friendly product.
3. Right Team:
To cater to a customer-friendly product, the idea of a start-up in sync is challenging work and you need the right team to pull that off. As per the data, we referred earlier, in this article, about 23% start-ups fail due to the wrong team and this is where you should look to hire developers that can structure your start-up idea into a user-friendly online product.
There is your need for extensive staffing and training programs that can help your start-up grab the right team to focus on consumer needs and provide value. CRM can help you identify the right man for your job and even train the same strategies to reach more customers and sustain them.
4. Research Mode:
How can I write this article without any research? The same applies to your start-up, as comprehensive market research is a must these days. Start-ups without market research that had no real market amounts of about 42%, that is the biggest number in terms of percentage and why? Because of these start-ups were short of market research and market analysis. Another 13% start-ups that have been ill-fated to have launched at a bad time, shows the extent to which start-ups ignore market trends.
CRM can analyze, store, and integrate consumer data that helps start-ups find the right market at the right time to launch the right product.
5. Marketing Foe:
About 14% of start-ups failed due to poor marketing and another 14% due to ignorance towards their customers. So, why do start-ups fail at marketing and after-sales service? There can be several factors and one of them is not knowing your customers well. CRM helps start-ups know their customers well enough to cater to their needs. Analytical CRM can help gather data regarding your consumers and with operational CRM, you can ensure faster services to your customer and strategic CRM can help you market your products strategically to target consumers based on their behaviors and purchasing patterns.
So, now you know why your start-up needs CRM to sustain in the times of cash crunch and even beyond and then now you also know types of CRM to go for each hurdle in your start-up journey. CRM is not just a tool to know your customer, it is more than that as it gives you everything that you need to get your start-up that much needed firepower. So, get your whiteboard ready to plan your next big idea with the weapon of CRM tools and strategies to power your start-up for victories ahead.