4 Mistakes Your Startup Is (Likely) Making With Customer-Relationship Management Make sure you get it right the first time around.

By Lucas Miller

Opinions expressed by Entrepreneur contributors are their own.

TarikVision | Getty Images

Customers are the lifeblood of any successful startup, but if your startup doesn't know how to properly handle customer relationships, you'll have a hard time attracting and retaining them.

It doesn't matter what industry you work in. Your startup needs to develop strong relationships with its customers, and that means making relationship management a top priority. What may seem like a relatively minor oversight now could lead to poor client experiences that keep you from achieving the growth you need. Don't make these mistakes.

1. Only focusing on customers until the sale is complete

The customer relationship isn't over after they make a purchase off your website. Unfortunately, many startups seem to adopt this attitude, with sales teams constantly chasing after the next new opportunity. However, what happens after a conversion is made could prove even more important.

Research has found that while companies have a 60-70% chance of selling to existing customers, sales teams generally only have a 5-20% success rate with new prospects. At the same time, 71% of customers will end a relationship with a company if they feel like they are receiving poor service.

This makes ongoing client outreach crucial, especially with service-oriented startups. Consider how a client will continue to interact with your company after that first sale, and take steps to optimize these interactions. An easy-to-navigate UX and readily available customer support are just a few factors that will keep converted customers loyal to you.

Related: 10 Reasons Why Good Customer Service Is Your Most Important Metric

2. Neglecting the data available from their software

CRM technology is more widely available to startups than ever before, providing a comprehensive data overview using your website, social media marketing, offline purchases and more. But while a lot of data is available, many startups fail to unlock its full potential.

In a recent phone conversation, Guy Rohkin, head of scientific business development at Sci Find explained, "Many startups struggle with their data-oriented platforms because there is a lack of ownership and long-term vision. You need someone who can take responsibility and determine which data points to focus on, and then use this information to gain meaningful insights for your acquisition and retention strategy. You must also use a system that can scale alongside your business — something that can still help you understand trends when you have more data points."

For example, an uptick in the number of people unsubscribing from your emails could indicate a serious flaw in your marketing strategy. While email frequency could be to blame, the content of your messages could also pose an issue.

Without clear ownership of data and a quality CRM system in place, the true reason for the trend could go undiscovered, causing you to lose more email subscribers.

3. Not being proactive and personable with comments and concerns

Another common issue with many startups is that they tend to be reactive, rather than proactive, in addressing customer communications. This can cause startups to give up on a dissatisfied customer as a lost cause the moment a negative review comes in.

This represents a significant lost opportunity that can spiral into additional problems for your business. Research from Podium indicates that 93% of customers' buying decisions are influenced by online reviews. At the same time, a BrightLocal survey found that 89% of customers will read a company's response to user reviews.

Quite often, proactive outreach can cause a customer to change their perception about their experience with your startup, causing them to change their review. At a minimum, negative feedback should spur internal change.

Writing for TechRadar, Jonathan Hinz recommends passing reviews "through fulfillment, product, engineering and marketing teams, in order to allow each team to adjust their processes to meet customer needs and give the entire organization a better understanding of what their customers want."

Related: 7 Essentials of Great Customer Service

4. Relying too much on automation

There is no denying that automation can be a lifesaver for startups. Automating mundane, yet necessary tasks will give you more time to focus on things directly related to the growth of your business.

However, startups should never let automation take over their customer engagement practices. If a customer were to send an email complaint or question, the last thing they want to get is an automated, fill-in-the-blanks reply. It indicates that the business doesn't truly value them or their experience.

A CGS study on customer perceptions of chatbots further puts this into perspective. Though often touted as the next big thing in customer communications, 86% of users said they preferred human customer support to AI systems. An astounding 50 percent actually felt that chatbots made it harder to resolve issues.

Used improperly, automation could do more harm than good for customer relationships. Think critically regarding various customer interactions to consider whether automation would truly serve them well or not.

Start delivering a stronger customer experience

Maintaining strong relationships with your customers requires a lot of work, but at the end of the day, nothing will be more important for the long-term sustainability of your startup. By prioritizing the customer experience at all phases of the sales process and using CRM tools appropriately, you can make each customer feel valued. When that happens, the brand loyalty and customer retention that every startup needs to survive will become all the more likely.

Lucas Miller

Entrepreneur Leadership Network® Contributor

Founder of Echelon Copy LLC

Lucas Miller is the founder and CEO of Echelon Copy LLC, a media relations agency based in Provo, Utah that helps brands improve visibility, enhance reputation and generate leads through authentic storytelling.

Editor's Pick

Related Topics

Cryptocurrency / Blockchain

Why the Next Crypto Bull Run Will Be Like Nothing We've Ever Experienced

We are on the precipice of what could be the greatest transfer of wealth that has ever happened in human history.

Business News

Gen Z's Main Career Aspiration Is to Be an Influencer, According to a New Report

Over half of Gen Z individuals surveyed expressed a desire to become influencers, compared to 41% of adults from other age groups.

Business News

Disney Is Investing a Massive Sum to Expand Its Theme Parks and Cruises

The company made the $60 billion revelation in an SEC filing earlier this week.

Business News

Sam Bankman-Fried's Parents Sued by FTX Over Alleged 'Misappropriation' of Millions

FTX has initiated a lawsuit against the parents of its founder, Sam Bankman-Fried, in an attempt to recover millions of dollars that the company alleges were fraudulently transferred and misappropriated.

Business Ideas

55 Small Business Ideas to Start in 2023

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2023.