It is always exciting to start a new project and turn it into a new company, ideally with a good chunk of investment to back you up. However, it is possible that all you’ll hear when you finally hit the ground is the chirping of crickets. E
very tech start-up needs to have a clear customer acquisition strategy designed and planned out from the very beginning.
For a business to get investor funding in the first place, investors need to know that the business model in front of them can work. While a company may have a business model that makes sense, it is an entirely different affair to create a winning strategy for acquiring the customers who will then make that model work.
It’s not wrong to argue that the most crucial component of business operations is customer acquisition. The initial acquisition needs to happen before a business can even begin to think about retaining customers, and keeping them loyal for a long time to come.
If customer acquisition is so important, why aren’t more companies doing it right? The answer to this question may be similar to that of many other questions a business has to answer—humans are complex. There is nothing straightforward about converting a lead into a paying customer. Regardless of how much technology is able to automate certain processes, customer acquisition will always be a challenge for many businesses. That being said, there are a number of common mistakes some tech startups make that affect their ability to acquire new customers. This article uncovers some of them.
Underestimating the cost of customer acquisition
Many entrepreneurs in the tech space, and elsewhere, start out without putting sufficient resources into customer acquisition. Whether that is because they are more focused on building their core product, or simply aren’t aware of how expensive customer acquisition can get, they can end up shooting themselves in the foot.
Venturing into a new market will definitely drain some funds, and new businesses need to have a reasonable amount set aside for customer acquisition right from the start.
Relying too heavily on analytics
There is no denying that analytics have revolutionized the ways marketers measure their efforts, but it is easy to fall into the trap of looking too closely at the numbers. While analytics has made it easy to track marketing efforts, it cannot be taken to be 100-percent accurate.
Also, it is possible for multiple marketing programs to touch users, while the last marketing sources alone would be reported by Google Analytics. In essence, a conversion may have been aided by multiple channels, but only the final channel will be credited. This can make it difficult to determine which channel in particular caused the conversion. Plus, Google Analytics doesn’t track every single marketing activity there is. However, this is not to say that companies should ditch analytics, rather, they should strive to become ‘analytically mature’.
Losing sleep over ROI
Any startup wants to milk their marketing efforts for every bit of return on investment, but when you are just starting out as a new company, you may need to relax. A new product must be given time to blossom, so don’t turn your marketing strategy on its head if you don’t get a £1,000 return from the same amount spent on marketing. Experienced hands in the digital marketing space know that customer acquisition is a fairly long journey.
New companies may not consider that a potential customer could take their time to look for offers, research the competition, and check for third-party validation before making the decision to buy. Part of the problem is focusing too intensely on small data sets, gathered over a short period of time.
When ROI doesn’t look good over a short period of time, other metrics such as time on site, bounce rates, quality scores and click-through rates can serve as good indicators for what is going on with a business. We’ve learned that it takes time to get any real ROI.
Overestimating first-time visitors
The web is an open place, allowing anyone to get onto a website and leave just as quickly as they landed. Visitors may land on a website because it showed up in a search related, or unrelated, to what the company does, or because they followed a link from an article. Essentially, not everyone who checks out a website has the intention to buy. Even if they do, they may never return.
Many tech startups focus on driving traffic to their websites and, so, tend to focus their time and money on getting people on the site. However, the problem is website traffic is not sufficient. That is why there is retargeting, which is so important that some businesses spend more than half of their budgets on retargeting website visitors. Every business is different, and each individual one will have to figure out how to make first-time visitors stay on the site and/or return.
Ruining the first impression
This one should be obvious, but it most certainly can happen. The first contact a potential customer has with a business matters a great deal, and can make all the difference between a customer who is willing to return and make a purchase, and one who would rather not hear about the brand again. Somehow, many new businesses manage to ruin their first impression. For example, if your web page reads “https://www.discountdomains.co.nz/web-hosting”, customers would expect to actually come across affordable, secure web hosting and domain registration services. Anything the opposite, will weaken prospective clients’ trust.
In other cases, it is having a customer service representative who responds rudely to queries, and other times, it is running out of inventory. Whatever the case, it does a startup no good to start damaging its reputation even before it has really hit the market. First impression, they say, lasts long.
These aren’t all the mistakes there are to make, but they are a good place (not) to start.
Keep in mind that no organization can be without dents but it is good if such frivolities are greatly minimized so as to keep our clients, the employees and even the board of directors happy and fully satiated. With the right PR strategies, and engaging the services of professional publicists most of these problems will be eliminated. Also, endeavour to be open and keep your hands clean—you’ll see how the sky would be but a starting point as you drive massive traffic to your business.