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WHY DO FOUNDERS HAVE A DIFFICULT TIME RAISING CAPITAL (Part 3 of 10 Series)
By:
Sara Rauchwerger
Managing Director
Geron Vanderfeesten
Founder, Investor, Consultant
Early stage companies’ path to success is often marked by uncertainty and challenges (as described in the introduction). Effective execution of operational processes is vital for establishing and running a new business or any enterprise. The mission of early-stage companies is to provide a product/service that adds value to the target customer; otherwise, why are you in this business? Demonstrating your ability to acquire customers at scale differentiates you when it comes to seeking investments. The ability to capture your first/second/third and subsequent customer engagements, it is advisable to start early and establish an efficient and effective procedural structure. In Part 3 of this series, we will guide you in evaluating the key elements to consider when establishing processes and procedures for your business.
PART 3 – Build early processes and procedures to easily scale your business
Introduction
In the early stages of developing your business, it is imperative to establish efficient and effective structural processes and procedures that facilitate seamless scalability with the flexibility to make changes along the way. A key focus during this phase should be on achieving early results. The most obvious, which tends to be forgotten when setting up this mechanism, is to ensure you clearly identify and characterize the specific target customer(s) that is most likely to benefit from and engage with your product(s) or service(s).
Once a customer(s) is identified, it is time to begin the initial process of documenting your customer engagement procedures across various facets, including marketing, sales, customer onboarding, customer service and retention strategies. Within each of these areas consider how you will provide a consistent company message. This is presented in presentation styles, offline and online messaging to design. Make sure that you establish a clear line of command and control to meet both company and customer needs, especially in a small team setting as you onboard customers. Share responsibilities and document roles and responsibilities to maintain a cohesive and responsive team. Leveraging each team member’s strengths helps in addressing customer concerns effectively. Additionally, documenting quality control and feedback review is critical for continuous improvement. Finally, safeguard your assets, including data and privacy, and document and celebrate success through measured milestones to build a resilient and scalable business foundation.
Fostering a strong customer relationship, increasing customer satisfaction, and establishing a positive brand reputation will set the stage for sustained growth and success in the long run.
Here, you will find a detailed list of areas to consider when evaluating which procedural elements may be important to implement for your company:
1. Customer Onboarding
a. Build presentations/documentations that describe your onboarding process in your company.
b. Implement a streamlined customer onboarding process, including clear communication channels, welcome kits, and personalized support to enhance the initial customer experience. This not only helps build a strong relationship with early customers but also sets the tone for long-term satisfaction and retention.
c. Provide your customer with directions to available resources within your company, your partners if your product(s)/service(s) leverages a third party, or any other relevant resource that may be useful for your customer to expedite onboarding.
d. Build/prepare training/educational resources/materials if required to help maximize the value of the product(s) or service(s). By offering tutorials, webinars, or knowledge bases early in the customer journey, the company can ensure that customers fully understand the benefits and features of the product(s)/service(s), leading to increased customer satisfaction and retention.
e. Select key contact person(s) within your team and always provide contact information to allow your customers to easily engage with your company.
2. Customer success
a. Integrate a customer success initiative to contribute to the long-term growth and success of your company.
b. Personalize customer support to be able to address customer queries and reply promptly through various channels, such as, a dedicated email address, dedicated phone number, social media platform personalized to your company or a live chat (if you have the capabilities to acquire the service from a third party or build your own).
c. Designate a customer success person/team early to ensure that customers receive the necessary guidance and support, fostering a positive customer experience from the outset.
d. Engage with customers proactively by providing product updates, exclusive offers, updated documentations, articles, newsletters to foster a sense of loyalty, encourage repeat business and advocate your brand.
e. Establish continuous feedback loops, such as customer surveys, feedback forms, or product usage analytics to gather valuable insights into customer preferences and pain points. Utilizing this feedback will allow you to refine your product(s)/service(s) to build a customer-centric approach that resonates with your target audience.
f. Set a process to analyze early customer feedback to help your company identify potential pain points and areas for improvement. Carefully select required iteration that can help scale your product(s)/service(s) development while increasing customer satisfaction. At an early stage, you may want to reward your initial customers with additional features/functionalities not on your road map, but it’s crucial to evaluate the value-to-customer conversion. The more you give, the more a customer will take, and the more time you will spend, limiting your opportunity to grow quickly.
g. Start early to define key success factors from key performance indicators (KPIs) to metrics related to the most ideal customer success. Evaluate customer satisfaction scores, retention rates, and upsell/cross-sell opportunities. Monitor and measure the effectiveness of your customer success initiatives. Analyze these metrics to be able to make data-driven decisions and continuously improve your customer success strategies.
3. Quality Control Measures
a. Establish stringent quality control measures for product(s)/service(s) development to prevent the occurrence of critical errors and ensure consistency in high-quality deliverables.
b. Quality control can also be defined based on the deliverable type, particularly for early-stage companies Prototypes vs. Minimum Viable Products (MVP). Ensure that the prototype accurately reflects the intended functionality and design vs. features that are fully functional and meet basic user needs in an MVP delivery (a key differentiator when presenting your idea to an investor).
c. Set up quality benchmarks and regular checks early to be able to build a reputation for reliability and trustworthiness in the market.
4. Internal Communication
a. Create an effective internal communication protocol from setting regular team meetings to a clear reporting structure.
b. Document your work as you build your product/service to allow anyone that you hire later to have a clear path to understanding the “past” and to continue evolving and building for the “future.” This is applicable to all types of companies but can be pivotal for companies that will be providing software platforms for their customers where facilitating knowledge transfer becomes essential as you recruit developers to work on the platform.
c. Select project management and collaboration tools that can support your mission and can promote transparency and collaboration within the team. Use free tools to get started if you do not have the budget and upgrade later (but select these platforms wisely so avoid having to change and having your team relearn a new platform). This allows your team to adapt swiftly to changes in business strategies and market demands, fostering a cohesive and agile work environment.
5. Data Security and Privacy Policies
a. Implement a comprehensive data security and privacy policies from the outset to safeguard company/customer-sensitive information and build trust internally and with your customers/partners.
b. Prioritize data protection and privacy policies and practices by setting up the correct rules to demonstrate your commitment to ethical practices and regulatory compliance (if required). Establish a strong foundation to allow you to easily grow while remaining credible in all sectors within your company that can impact your business (i.e. data storage, customer contacts, team/employee personal contacts).
Conclusion
By integrating these examples into the early processes and procedures of an emerging company, entrepreneurs can lay the groundwork for sustainable growth and success in a competitive market.