Investing in your customers: Why it’s the key to organic growth

With so many distractions, it can be easy to lose focus on acquiring and retaining customers. Our Startups Awards winners share their tips…

Everyone knows that the customer is king. And as an early-stage start-up, your first few customers are priceless. But as your start-up grows and scales, it’s easy to become distracted by other elements of running your business, from logistical and operational issues to raising finance.

And while these are no doubt important too, customer acquisition – and even more crucially retention – is the crux of any successful start-up. And at our Startups Awards Winners’ Dinner it became clear that while all of our business owners knew the importance of the above, keeping customers happy and coming back isn’t necessarily easy.

So it’s something the majority of them are working on, in one way or another. From improving their CRM systems to listening to feedback, find out how our winners are putting customers and their needs at the heart of their businesses…

Optimising customer acquisition

Oliver Bridge, Cornerstone

“In terms of what works best for customer acquisition, it changes quite a lot. We’re a small business with low awareness. There are 10 million men in the UK that shave and we reach 70,000 subscribers, so our penetration is tiny.

“We’re still at the direct response stage of marketing, so lots of paid marketing spend. We recently launched on TV which is quite exciting, and so far more successful than door-to-door selling (which I tried in the early days).

“We spend loads of money trying to buy the affections of customers but what’s great now is that we’re seeing organic customer acquisition, via word of mouth and friend referral becoming a really strong part of our growth.

Steve Purdham, 3rings

“We started TV and radio advertising at the same time recently, regionally at first, to see what worked and what didn’t. One of the challenges that we have is that our product is a non-impulse purchase, you just don’t see it and buy it for your mum and dad. It’s a discussion you need to have with your family so there’s a latency that we’re trying to understand.

“The biggest thing that scares us at the moment from a customer acquisition point of view, is that after building three tech businesses, we went from paper through to digital. In our last business we generated three million monthly customers all digitally, no paper, everything was done through Google Adwords and Facebook Boosting. But now, suddenly, people are asking us do we have a brochure?

“Our target audience for this business is 45-65-year-old females primarily who have aging parents and in-laws who want a piece of paper to show their aging relatives. We’re then having to do traditional marketing. Social and digital marketing is a means to create awareness but actually converting into sales is good old-fashioned marketing that I thought we’d got rid of 10 years ago.”

Optimising customer retention

Oliver Bridge, Cornerstone

“How do you hold onto customers? This is really challenging. It comes down to the nitty gritty, making sure your website is up to scratch, that the tiny details on the products work well (down to the cap on the shaving gel). Do the razors rust? All the boring operational issues.”

Investing in customer service

Julien Callede, Made.com

“We are going back to the roots of any start-up, which is investing in your customers. The ones who liked you when you had no cash. So instead of trying to grow through marketing we’re going to try and grow through improving the service we provide to our customers, improving the way we communicate with our designers.”

Steve Purdham, 3rings

“Our approach to each customer is a mindset, (a bit like calling yourself a start-up however many years down the line, like Google). Whether you care about each customer is probably a better solution that spending another 15-20k on TV advertising. The response that you get once you build a relationship with customers is phenomenal. But it eventually comes down to cost.”

Improving Customer Relationship Management (CRM)

Julien Callede, Made.com

“Getting old customers to repeat costs much less than acquiring new customers. One of the big focuses we have is to increase the efficiencies of our CRM (customer relationship management).

“The way to get customers to shop again is either to introduce new items that they were not getting at your shop before, or to improve your CRM efficiency. This is one of our number one focus as a company that wants to grow in a sustainable way.

“I see a lot of fast-growth companies that still send the same emails to all of their customer base. They segment their base on Excel and do everything manually. I’m not the tech guy, and I wasn’t the marketing guy but there is a ton of software out there that can do stuff much more smartly. Then, software doesn’t do everything, and companies also need to invest in the right people and expertise to run their CRM program.”

Oliver Bridge, Cornerstone

“Our business model is quite different; we sell shaving products to men on a subscription model so for us retaining ongoing customers is a slightly different challenge. For someone like Made, or any other non-subscription business you have to remarket to customers to get them to come back and buy something. Whereas for us, the default option is that your card just gets charged again – a bit like Spotify.

“So we’re trying to understand why people would cancel, rather than having to win them back – so it’s a slightly different challenge.

“Our CRM challenge is how we can cross-sell different products. We sell a razor and three different skincare products, when someone uses all four of those products and follows our routine (using our booklet), their shaving experience is much better. And we can see that in the numbers. So we spend a lot of time trying to cross-sell those extra products. Obviously because it makes more revenue and profit for us but it’s also a better experience for customers.”

Steve Purdham, 3rings

“We’ve flipped it as customer retention and referrals is massive when it comes to looking after a family. We’ve gone non-CRM, we’ve purposely turned everything off, at the moment – apart from the alerts that they get technically – they get personal emails (not just personalised, but personal). We’re talking to each customer, over-loving the customer.

“When you keep a personal eye on your emails – it becomes very clear the type of responses you should be giving to certain emails. So rather than jumping straight to automation, you define it early on. Rather than doing it using a whiteboard, you go on what customers are actually asking. And you use the right language for your business.”

Listening and responding to customer feedback

Julien Callede, Made.com

“One thing we’ve been doing since almost day one is sending emails to every single customer after delivery asking for their feedback, which isn’t something you’d usually do. But it’s worked well for us.

“Customers are happy to tell you and if you do make a mistake, they will forgive you the first time. The main thing is though – we’ve evolved a lot as a business – and 90% of it didn’t come from us internally but from customer feedback.

“For example, we opened a showroom because customers were asking for one 10 times a day. Nothing is rocket science, it’s simple intel stuff that helps us a lot. My advice to any company would be to make the most of customer feedback.”

Amer Hasan, minicabit

“I used to respond to customers’ live chats myself –and one of the things I kept seeing was that people wanted to buy a TV from Argos and have a cab deliver it, or wanted a taxi to help them move house. And I could see this in the data on live chat.

“We then approached Big Yellow Self Storage and they didn’t have a solution so now we’re their sole cab booking platform, purely out of what customers were requesting, in chat sessions.”

David Cox, haysmacintyre

“We invest significantly in a client care programme that includes face to face interviews with clients. The feedback is shared across our operation to influence service delivery, staff development and marketing. While we believe we offer a personal, partner-led service, the programme helps us test our assumptions and whether the results reassure us that we’re doing well or provide a wake-up call, it ensures we’re always on our toes and not complacent, which is absolutely right.”

Oliver Bridge, Cornerstone

“We have a customer care team member in all of our tech meetings. Every time we’re wireframing or doing one of our tech meetings, we have a customer care person there to give anecdotal feedback from a non-tech perspective.”

Views were expressed at the Startups Awards Winners’ Dinner held at the exclusive Covent Garden Hotel.

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