8 Strategies to Use to Win Customers as a Retail Startup
A retail startup has tons of options and opportunities, provided the company is nimble, fast, and decisive. Most retail startups know that they want to sell products online and may also have a business model that could drive it. But they don't understand the tools required to support the business model.
The tools for a retail startup are a mix of strategic, software, eCommerce, and marketing tools. Although easier said than done, setting up a retail startup and online delivery service won't alone guarantee success.
It is a combination of factors. It is about reaching out to the right demographic. It is about using the right channels to market the products and services. It is also about understanding the pulse of the consumer and changing one's strategy accordingly.
Why do retail startups find it difficult to stay competitive?
No proper capital structure
might not have the experience to raise adequate capital. Investors don't want to be surprised by ad hoc requests for capital. That's why retail startup founders must have a proper capital structure. They have to plan this structure so that it allows them to expand and explore whatever the need of the market may be.
Waning of interest
Getting bored is not an option in entrepreneurship. Business owners might not be mature to sustain the tempo. They might get bored because entrepreneurship is also about consistently doing mundane, repetitive activities.
So after a point in time, entrepreneurs might start showing negligence. They might overlook key aspects of the business and make poor decisions. Their strategies would not align with the initial vision and mission of the company.
No sales strategy
Startups constantly need capital. Investors would be ready to put in the money in a phased manner. But for that, the retail startup has to show traction and pre-orders. Data has to be presented to investors to give them the confidence that people are interested in the product. Entrepreneurs must have a sales strategy of their own. Investors can only give out pointers. They don't spoon-feed any of their ventures. It is up to the entrepreneurs to figure out the sales strategy.
Overly expanding in less time
Business consolidation precedes expansion. It is often a multi-year process and could even take decades. Some businesses might not diversify or expand at all. Expanding a business must be done only if there are clear indications. Otherwise, risks could be involved, and a retail startup might not be up for these headwinds.
8 strategies that retail startups can use to win customers
Given below are 8 strategies that retail startups can use to win customers:
1. Customer relationship management
Startups have initial exciting days. But keeping up the momentum takes consistency. Customers being the bedrock of the business, need to be managed. Using customer relationship management and innovative, startups can improve productivity, reduce lead times, offer better differentiated services, manage their sales pipeline better, forecast revenues accurately, manage their sales teams, and generate insights.
They can use a CRM tool for this. Now that CRM tools are cloud-based, there is no concept of buying the entire CRM suite. Only those required features can be used from the cloud on an on-demand basis.
2. Market research
Doing is not a one-time activity and is done periodically. It can be done before the initiation of a project, after it, and biennially. ?Market research helps a startup better understand its products, and services, how they will fare in the market, and how they compare to other competitors. It will help a company forecast its revenues and plan for sales activities. It can allocate budgets as per the market potential. It reduces the chances of over-subscribing or under-subscribing to capital. Finally, market research helps a retail startup understand its target customers' changing trends and preferences.
3. Identifying the value proposition
There are many products and services out there. The retail startup's products and services could be one of many. If a customer wants to buy a product from this startup, there should be a reason. Identifying this reason or value proposition is critical for success.
A retail startup can have many and not just one. It can have customer service, product quality, delivery, post-sales support, and technology as differentiators. Each of these differentiators needs a value proposition that separates this differentiator from its competitors. There are several frameworks and tools for this. Using these help identify value propositions.
4. Hire smart
Retail startups have to hire smart. They have to allocate the budget and convince their investors to get only the best talent. Or at least talent that can propel the startup forward. Else, there would be a significant decrease in overall organizational performance. Hiring motivated employees, who can give consistent performances, is the key to success. Hiring the wrong people for the right jobs and the right people for the wrong jobs must be avoided. All of this is part of the hire smart strategy. The strategy can be implemented using tools and techniques related to human capital management. As much as hiring the right people is essential, investing in creating a healthy organizational culture is essential.
After conducting competitive market research, it is about going and competing. But to win customers, marketing is the only tool that can get them to sit up and listen. Using a mix of marketing channels and delivery modes should be well thought. It could be a mix of social media, newsletters, PPC, email marketing, content marketing, campaigns etc. Startups can use startup metric tools to measure their progress. Although all marketing tools might seem commonplace, the way the marketing is curated can make a difference. A highly personalized marketing campaign can catch customers' attention and help get into their mind space.
6. Freemiums and free trials
Although they can be part of marketing, need different treatments. They are a way to get customers to start using the product.
Initially, the product is given to the customer for free, and they start using the product for an extended period. If the customer is using it keenly, it can be interpreted that the customer likes the product. ?The freemium can slow phase into a small fee and later pay per use or premium feature license fees. The benefit of such an approach is that customers can get locked into the product. They might get used to using it. And they would be then willing to pay for it for keeps.
7. Offline marketing
Event marketing, billboards, QR codes, and sticker are all examples of offline marketing. Event marketing promotional events help build awareness of a retail startup's business. It is an opportunity to get noticed. Here is where customers can sign-up. The customers can be businesses too. At such events, prizes and sign-up discounts can be given.
8. Inventory for niche markets
Retail startups can focus on narrowing down their market to one or at the most two segments initially. These are niche markets with demographics that have unique requirements. It helps retail startups focus on quality and customer acquisition rather than just sales and numbers. As the customer base grows, so does the ability to serve and thereby the ability to expand. Startups should not worry if niches will limit their revenue potential. They should focus on building the right habits first.?
Summing it up
Retail startups have tremendous opportunities for growth and expansion. But without strategy and tools, they could be heading in multiple directions and eventually losing their way. So, the best way to get from point A to point B to point C is to have tools, strategies, and fallback plans in place.