No matter what kind of business you’re operating, prioritizing customers is a sound strategy. However, research shows that customer centric startups in particular tend to have an advantage over their competitors.
According to a recent report, 66 percent of customers expect companies to understand their unique needs and expectations. The report also indicates that more than 80 percent of customers will switch to a competitor after a few bad experiences. Additionally, 86 percent of customers will pay more for a better customer experience.
“There’s only one purpose of a company, and that’s to provide value to its customers,” says entrepreneur Raja Mukerji, co-founder and chief customer officer of ExtraHop Networks, a cybersecurity solutions provider. “If a company does not provide value to its customers, it cannot survive. As founders, we think we set value. We don’t set value. We set price. The customer defines value. And unless we work very closely with our customers from day one, we can’t possibly know what product/market fit is because we don’t know what the actual market is. Technology ecosystems aren’t markets. Buying customers are markets.”
In a global keynote event for Founders Network members on June 15, 2022, Mukerji hosted a webinar on the value of customer centricity and how customer centric startups have a unique advantage. He also provided how customer centric startups can use customer insights and feedback to make better decisions related to product development and customer experience.
Check out his full webinar from June 15.
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There’s only one purpose of a company, and that’s to provide value to its customers. Click To Tweet
Investors are a vital component of the startup ecosystem. Securing startup funding increases visibility and can add value to your startup by signaling to prospective partners, customers, and investors that you are worth considering. However, despite the obvious experience and value of investors, Mukerji says founders should favor establishing a customer centric startup over traditional investor-led approaches. He adds that this doesn’t mean that all investors do not understand the importance of customer-centricity, however it is important to not take it for granted during the fundraising process.
“This is the number one disconnect we see between purely financial investors and customer-centric operators,” Mukerji says. “It results in this misalignment where you’re running the risk of creating investment vehicles that have no intention of actually providing value or leaving a lasting mark. The biggest casualty of the near-term financial statement-led approach to companies is the culture of the organization. If all you’re looking for is a short-term financial return then your mission, vision, and values for your company could be compromised.”If all you’re looking for is a short-term financial return then your mission, vision, and values for your company could be compromised. Click To Tweet
More than technology
According to a recent report, of the thousands of products released every year, 80-90 percent fail. That failure can be prompted by a number of issues such as poor product/market fit, failure to understand customer needs, and the fact that the product doesn’t actually solve a real problem. Customer centricity is key to addressing each of these issues.
“Very often, startups are developed with the principle of ‘build it and they will come.’ Then they flame out because they’re not actually listening,” Mukerji says. “What they’re doing is productizing some technical idea they have. We’ve seen time and again companies who will start out to promote some sort of technology, and they end up in this long tail of 100 companies working on this new technology. And they’ve got no relevance because they don’t know what their technology actually means to the buyer.”You need to take care of your customers. Click To Tweet
Mukerji says building a successful customer centric startup starts with prioritizing employees. The world finds itself in the midst of an employee revolution where employees at companies around the world are demanding more from their employers. (One in four workers quit their jobs last year.) In order to ensure startup founders have the right team in place to meet customer demands, they must prioritize their employees’ needs and well being.
“You need to take care of your customers,” Mukerji says. “In order to do that, you have to put your employees first. That results in a strong mission, a cohesive team, and companies that go on to do amazing things.”
In his global keynote, Mukerji covered:
- Why providing value to customers is the point of a company
- What customer centricity actually looks like
- How prioritizing customers can satisfy key stakeholders
- The importance of selling to customers overt analysts