Increasing Relevance of Social Selling for Startups
Every year, more than 800 startups launch in India. However, at the end of the year, only 150 startup survive. Interestingly, some more than 3000 startups have been registered in India last year. The trend of startups is exciting in India and the scenario will only get much more prevalent in the upcoming years, thanks to the sweeping winds of digitization.
India now provides a conducive ecosystem for startups to thrive, which has helped it to reach the third position and is an emerging as the fastest growing base of startups worldwide.
According to NASSCOM, India is expected to be the hub for 11,500 tech startups by 2020 with increased traction around global opportunities opening up in areas such as analytics, virtual reality and Internet of Things.
The year 2015 was a watershed year for startups in India, with over $8 billion of venture capital funding received before the year even ended.
This rush to invest in the newest opportunities of tech startups has also created its fair share of irrational exuberance. Many half-baked business models and copycat ventures have received venture capitalist backing with little attention to ground realities.
The media contributed to this scenario of reality distortionby encouraging and celebrating success of fund raising and ignoring the bigger picture that 80 per cent startups will make a touchdown within the first three year seven before they can fly.
Let’s look at some of the ground realities which startups are facing now - Rocket Internet-backed Foodpanda had raised more than $300 million for its global business and also invested heavily in the Indian market. As a result, they quickly became one of the largest players in the online food ordering industry.
In order to ward off rivals like Zomato, Swiggy and TinyOwl, Foodpanda acquired small ventures like TastyKhana and Just Eat in India. But despite being slush with funds and completing these acquisitions, they are now looking to sell out and are not finding a suitor even for a rumoured low price of $10 million. Their competition Zomatois also scaling down its operations whileTinyOwl is in no better shape.
On the other hand Shop Clues, an online marketplace has not only taken the challenge to bring unstructured categories online unlike Flipkart and Snapdeal but have also been able to control losses strategically.
Shop Clues has utilized digital and social media platforms with the affiliate marketing, blog posting and Facebook marketing to build relationship with their target audience in Tier 2 and Tier 3 cities.
A perfect example of marketing campaign is Shop Clues TVC promotion-‘GharWapsi’ which brilliantly clubbed social selling with a concept of ‘commute commerce’, through this campaign they valued the relationship with their customers with category-specific surprise offers that changed every single day.
Most startups which have been sustaining in the game are the heavily funded ones or are able to manage cash flows efficiently.The truth about entrepreneurship is that it is lot more well-rounded and complex. 90 per cent of startups fail, so what makes a successful startup? The three most critical factors which determines startup success are:
1) Social Skills:
Networking is one of the important factor for startup success. The founding members should have access to influencers within the business community to avail the opportunity to partner and find the investors whenever the funding is required.
Also great startups should have leadership which is able to motivate members to give their best and in turn enable employees become advocates to reach out to influencers. It is not possible for one person to reach out to whole ecosystem so all the employees should enable and participate in the networking.
2) Fundraising Skills:
Healthy fund flow is lifeline of the startup. Inadequate capital can collapse the startup. There are many crowdfunding platforms which can reached out as an option but if startup requires quick and continuous funding then a P2P network is the only option. This eliminates creating sales pitches and power points which most people now days don’t have the patience to listen to.
3)The 3rd most important factor which enables the success of any startup is customer obsession.
In my view, any startup’s success depends on “CIF” where C stands for Customers, I stands for Influencer outreach and F stand for funding. Social selling thereby becomes one of the most important enablement channels to get in touch and stay connected with all of them.
Remember, social selling is about listening and conversing and not brute selling. The following describes some ways to leverage social selling to reach out to customers, influencers and investors:
Customers: As per a recent CEB report, 57 per cent of customers have already finalized the product or the service even before interacting with the brand.
Social selling enables you to reach out to the customer at Zeroth moment of truth. Create a reason so that a prospective customer MUST hear you out. It has to be compelling enough to invoke the customer’s curiosity.
The value proposition has to be communicated through all the social channels where the customer is present. It has to go well beyond the product demos and needs to include customer references, RoI templates, stories and learning.
Every message needs to be personalized to capture the attention. Startups need to remember that word of mouth and referral is more impactful than marketing. All this can be achieved using social selling
Influencers: Influencer act as launch-pad and often allow startups to growth hack in reaching out to their target audience. They have access to millions of followers and these followers trust the influencers. Try avoiding social interaction with influencers and your failure will be guaranteed. Social selling is one of the easiest way to create mind share among the influencers.
Fund raising: An aggressive sales plan is required to get the attention of the investor. Don’t write up big sales playbooks, because no one reads them. Instead be ready to explain your value proposition in 140 characters. Leverage both inbound and outbound channels to reach out to them and don’t waste time writing something no one will read!
The social selling concepts described in my latest book Author,‘You Are The Key: Unlocking Door Through Social Selling’ are not only meant to help startup entrepreneur looking for growth hacking and funding, marketers trying to enable sales to generate leads on their own but for everyone who would like to understand how customer’s choices about a product gets influenced.