Exposing the hidden killer of startups: Customer Leakage

Customer leakage is the silent killer of startups. You can make all the right decisions, but if you fail to maintain your customer relationships, you’re doomed to fail. Similar to the human body, customer relationship is something that had to be maintained and nurtured. So why is your company suffering from customer leakage?

You’re focused on adding more customers

A lot of entrepreneurs make the mistake of believing that their marketing and sales team should focus all their efforts on acquiring more customers. But as the number of new customers grows, the churn grows as well. What was once a profitable business becomes unprofitable, even though they’re bringing in more customers than ever before.

This is the black hole of customer acquisition and it’s one that many businesses find themselves in.

You can avoid this situation by focusing our team on increasing customer retention, not just customer acquisition.

You’re focused on adding more features

When you don’t have a good understanding of the problem, solution, and customer segment fit. You’re not sure what problem you’re solving, so you’re trying to solve all of them. You don’t know who your customers are, so you try to sell to everyone.

You might think that more features will help more customers. More features could help, but they could also create confusion and delay the purchase process. If you’re not sure who your customers are, how can you be sure that the new features you are building will be useful for them?

This is why at this point it’s important to double-check that the problem, solution, and customer segment are aligned. If they are aligned, then it’ll be easy to deliver value to your customers, and easier to retain them.

The majority of startups fail due to financial constraints. They spend so much money in trying to acquire a customer but will have saved more by keeping their existing customers happy.

No matter how many new customers you bring on, if you don’t have a strategy in place to keep them, they will leave.

Maintaining and nurturing your customer relationships takes consistent communication and effort, and it’s easy to get burned out. Your customers aren’t going to take care of your relationships for you, so you have to find ways to do it yourself.

With ClearFinance you can compare your customer acquisition value with your customer’s lifetime value and know if you need to allocate more resources to your customer retention.

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