We have discussed several strategies for retaining or even expanding customer base for small businesses. This is just some more additions.
It is important for your new business to think about what else to offer to its range of customers. The best way to view this is to understand the market environment your business is playing in. Then you seek to understand the behaviour of your customers and see what complementary services you can offer.
Imagine you are in a food business. Consumer behaviour suggests that people that buy food might also request drinks. Then you can offer drinks to these sets of customers.
A number of SMEs have expanded their business using this strategy. Hotels.ng started as an online hotel booking platform, but now, it has transited gradually to become a foremost online travel agent by adding other service offerings to its hotel booking business. Now on its platform, you can buy airline tickets or book a holiday package.
Defending your Turf
You, however, need to be careful that your startup is not an extension of another. This is a tricky point and it is dependent on how fast you grow.
For instance, Facebook wanted to consolidate its position as the leading social media site. Based on consumer data, users prefer images and really short videos, hence the need to incorporate that into their business.
Rather than building their own product, Facebook acquired Instagram. In other to deepen engagement with the younger generation, Snapchat was another interesting acquisition target. However, the founders of Snap were not willing to sell, hence Facebook was compelled to build its own Snapchat features on all of its platforms including Instagram and WhatsApp.
If your startup is an extension of another, you have to grow quickly enough to be a potential acquisition target. If not, you might just lose that space to the bigger company who will just build the feature on its own platform, thereby killing your young business.
- You need to diversify your revenue stream by ensuring that your customers have access to all they might need within that vertical from your platform. I am not saying that Hotels.ng should add online retail to its business. But I am saying that if it has Hotels listed, Holiday Packages, Airline Ticket, why not add a taxi service at least for airport pick up and drop off.
- Be careful if your business is an extension of an already existing (larger) business. This is because the larger business can just add the feature to its own. But if you grow fast enough, you can just be an acquisition target, or you might expand your operations to compete with the larger business.
- It is all about creating value for the customers and ensuring that your business stands the test of time.