Why Businesses Succeed....or Fail

The ‘Internet Economy’ is a lucrative field today, with success stories such as Steve Wozniak and Apple computers and Sabeer Bhatia’s Hotmail. Naturally, everyone wants to get a share of these much ‘touted’ e-commerce profits. However, to succeed in the online world, businesses need to know all the possible causes of failure, even though it seems like an exercise in pessimism.

These are the common reasons why many startup e-businesses fail:

1) Stale ideas  Web businesses that have nothing new to offer, and are mere clones of an already successful business, don’t succeed. Does your e-business sell a product that is innovative? Is there something completely new about your social networking website? The key to avoid typecasting is to stay fresh. Look for problems and needs that you can solve.

2) Not defining your customer  The first rule in selling is to know your customer. Some startup e-businesses offer a variety of services and products, not knowing the profile of the users. As a result, they cannot offer tailor-made services for any specific age group or nature of target audience. And this reduces the chances of succeeding.

3) Ineffective Marketing  The best marketing strategy is a well calculated plan. Marketing is the backbone of any business. A web site that has been creatively marketed without any regard to user acquisition costs might become cost ineffective.

For example, even buying keyword ads is a complex process. A good entrepreneur buys keywords that people most frequently use in searches while having high relevance and low competing advertisers.

A common mistake most businesses make while cost cutting, is not hiring professional marketing consultants. They work on instinct, and their marketing plans lack a well researched strategy. This makes their marketing strategies ineffective. So the websites they make have inadequate SEO, SEM, and low virality, which results in low traffic to their website.

4) Poor web designing Today, most websites seem like clones. Businesses make compromises while designing their web pages. They use free software and badly designed user interfaces. So, first-time visitors find the home page unattractive and it fails to register in their minds. It is highly unlikely they will ever go back to a web site that’s hard to navigate, is poorly designed and does not offer them something interactive.

A person who wants to use an online personalized gift services will look at several companies that provide the service. He is likely to choose the site which gets the first rule of ‘catching eyeballs’ right, more so when you are dealing with the business of ‘feel-good’- gifts.

Web businesses with cluttered, badly color coordinated websites, which have long download time and unclear navigational tools don’t work. Only professionally designed, well branded websites, with original and relevant content can be effectively marketed.

Given these reasons, it is best to employ the services of a web designing company to ensure significant online presence or hire good programmers!

5) Lack of web analysis  Web Designing Vs Web Development. Web analysis is a process of analyzing the behavior of visitors to a website and then enhancing and modifying the features of the website to maintain and increase the traffic. Many web businesses design a website and then forget about it; and the resources invested in web designing go waste. Such e-businesses have no feedback regarding their website, as a result of which they cannot maintain a competitive edge.

6) No Networking  An entrepreneur needs to be friendly and people-focused. It is good to have an extended professional and personal network, before launching a web business. Web businesses that de-prioritize good partner and interpersonal relationships lose out in the long run.

7) Bad time and money management  A failed web business means that the founders have not managed their finances well. It includes over-spending or ineffective spending. Such individuals overlook the basic tenet of every business- time is money. They spend a lot of time bargaining for small cost reductions, while delaying launching time and other activities vital to growth in the world of start-ups.

The most important thing that leads to failed web businesses is lack of commitment and passion towards the work. Such people may know all the theoretical pitfalls that they can encounter, yet put in a half hearted effort to avoid them when confronted in the practical world. Hence, they continue to fail. Some businesses are fortunate. They feel a lot of pain but ultimately persevere to success.

Building a Strong Customer Relationship

Building customer relationships is very important in today's developed market where product, price and quality are roughly comparable. Market research has shown that consumers put their money on organizations which they feel 'care' for them. Let us look at some of the ways which can help an organization in building customer relationships.

How Important is it?

"Although your customers won't love you if you give bad service, your competitors will". We all know that a customer's satisfaction or happiness makes or breaks an organization. This is one of the reasons all the management gurus focus on building customer relationships. Often companies feel that the customer left them because the competitor was providing them a better price for the product, but studies have shown that customers leave because they think that their current company hardly cares for them. If you stay in touch with a customer through phone calls, e-mails, newsletters, etc., without selling them anything, you are telling them indirectly that 'I care for you' and when the time comes to buy something from the market, chances are that the customer will buy something from you to reciprocate the gesture. Having an effective customer relationship helps in people-to-people marketing. 

Creating a Bond

Personalize the Relationship. One of the golden rules of business is "customers don't buy products, they buy you". Be helpful to anyone entering your store/office. Always greet them with a smile. This encourages them and helps in setting a positive vibe between you and the customer. If you are contacting your customer over the phone, always ask if it is the right time to talk. Always start the conversation with a general topic and then gradually move to the main purpose of the call. Remembering a customer's preferences also helps as the customer gets the feeling that this person knows a thing or two about me which in turn increases the chances of a sale.

Take Feedback. After the customer has bought your product, make it a point to call him up and ask him how did he find the product. You can make it a point to call them every month. Listen to their suggestions and feedbacks carefully, because most of the times the suggestions/ feedbacks are the unwanted needs of the customer which if not met, can make the customer leave you for your competitors.

Keep your Word. Always keep your word as there is nothing more upsetting for a customer than a failed promise. If there is a delay in the shipment of the product, first thing to do is inform the customer. This is much better than the customer taking the day off from work, waiting for the product to come and then coming to know that there is a delay. Chances are customer will be frustrated and yell 'cancel the whole thing altogether, I don't wanna order it'. Instead, call the customer beforehand and apologize for the inconvenience, but do let him the cause for the delay. Customers do really appreciate that.

Appreciate their Loyalty. Sometimes words are not enough to make a customer believe that you are really there for him. If the customer has been buying products from you, it is time you offer him discount coupons, membership plans etc. This helps in building a strong image of your company in the minds of consumers. And nothing brings more smile on the faces of customers rather than the thought of paying only half the price for the product!

Innovate. Building customer relationships through effective marketing also helps in keeping your customers well-informed. The marketing strategies have changed with the advent of various social networking sites and blogs. Therefore, it is essential for an organization to adapt to these changes to progress in the competitive market.

Challenges in Building Customer Relationships

One can't deny the fact that every theory, every idea faces some challenges when it is implemented. Let us take a look at some of the challenges an organization may face while building customer relationships.

Lack of Commitment. The organizations can lay down the structure and the policies to build relationships with customers, but employees are the ones who have to execute the policies. If employees are holistic towards a customer friendly approach, then there is little scope for the organization to build a customer friendly environment.

Poor Communication. It is very important to get the message across to the customers in a proper way. For example, if the product the customer is asking for is out of stock, then the employee needs to be apologetic to the customer and can give an approximate time-frame by which the product is expected to be back in stock. Being insensitive to customer's emotions drives them away.

Weak Leadership. If the leader is skeptic about the benefits of a customer-focused plan, it is unwise to expect that the employees will carry it out in the desired fashion. The leader should follow with an example. An effective leadership can really turn things around in the favor of an organization.

Building customer relationship is essential for the long term interest of an organization. In fact, businesses today have changed the buyer-seller equation and organizations are focusing more on building customer relationships and partnerships. With all these new customer focused policies, customers surely are going to feel like 'kings'.