The CEO of Singapore-based Zopim speaks at Echelon Central Asia 2015 and breaks down the elements that will grow or stall startup growth
Building and fine-tuning your product/service is vital in a startup’s life cycle, but if no one buys it, it’s a good as a dud.
It is critical for startups to know how to target the right market, attract the right customers and eventually scale their business to ensure profitability.
Based on Tay’s experience, there are three phases that most startups will have to undergo in their efforts to grow, sustain and manage customer growth.
1. Find the early adopters
“The first people to queue for smartphones were the geeky brothers. Then the cool sisters hopped in, then the mothers,” says Tay.
The geeky brothers he was referring to are, of course, the early adopters — people who like to tinker with new technology. If these guys don’t warm up to your product, the less techie folks are less likely to adopt it.
“[At first] you are seeking to find the product’s market fit. You are like a rocket trying to get off the ground,” he says. You need to craft a story about your product and tell the early adopters what’s good and sexy about it, he adds.
To find these guys, you have to hustle. A lot.
“You have to walk out of the office and shove it [your product] into the hands of people who would use it. Break the rules, ” Tay says.
Citing the high-profile Singapore-based gaming platform (and unicorn) Garena as an example — he says that in its early days, Garena went to different cyber cafes to install its platforms on computers, regardless of whether it had the cafe owner’s approval.
You also need to take risks and experiment.
“As we were starting Zopim, we went back to the question of ‘what if we could do something drastically different’,” Tay says.
But doing something different is an exercise in futility if it is not validated by the users. Seeking out customer feedback is not an option but an obligation to your vision.
To get to that stage, you first have to build an MVP (minimum viable product) as it not only enables fast deployment, it is also more affordable. This allows you to get critical feedback early in the product development cycle.
Customer engagement needs to be personal too. “Talk to each customer. You must not only be able to win them over but also retain them,” he says.
There are some caveats to avoid too. Tay cautions against getting obsessed with competitors or becoming too analytical at this stage.
“Don’t waste money on large-scale advertising and marketing too,” he adds.
2. Knowing how to scale
Now that you know your product has demonstrated potential with the early adopters, you can now figure out how to reach out to other customers.
The goal of this phase is to build a “fat and profitable” sales funnel.
That means weighing the cost of winning one customer — Customer Acquisition Cost (CAC) — against the revenue you can make per customer — Lifetime Value (LTV).
This is the time to get analytical and measure your marketing efforts.
There are a few ways you can market your product. You can go to a trade show, or in Zopim’s case, you can try out outrageous market campaigns that have the potential to go viral. After all, all press is good press.
In 2012, Zopim engaged in a bizarre marketing campaign by dressing up one its staff as The Grinch. This led to coverage on the Wall Street Journal.
Then there is the question of how you retain customers. In the beginning, you can provide support because the customer base is small. But when you are scaling, it is harder to provide comprehensive tailored customer support. So you need to know how a customer is feeling and how to react and prevent unpleasant instances.
Tay recommends using the Net Promoter Score (NPS) Surveys periodically. These gauge how likely a customer will recommend your product to friend or colleague
A healthy growth and high retention equates to a sustainable hockey curve.
3. Managing scalability
So your startup is crushing it and your product is a hit. Now you have to figure out how to manage your startup.
How do you keep your startup from crumbling? Besides investing in customer retention, you need also need to focus on staff retention and empowerment, as well as hiring the right team.
“Great companies need to know who they are. The staff needs to know why are they are doing this, how they are doing it, and what they have built,” Tay says.
Hiring the right team influences the company culture, design and engineering decisions and super teams. It helps guide a lot of business decisions in the company.
You also need to continue to innovate and fine-tune strategies as the company enters new markets, he concludes.
Join us before the end of 2015 at Echelon Central Asia! Held on Dec 2-3, Echelon Central Asia is a two-day conference held in Almaty, Kazakhstan, aimed to create a bridge between Central and South-East Asia.
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