If you come across someone who has been in business for more than ten years, congratulate them. This is because one of the most alarming business statistics relates to business survival. Very few businesses are said to ever celebrate their 10th birthday. Startups are vulnerable to risks, and a well-known global statistic in business is that only 10% of startups eventually survive. Unfortunately, many fail. According to Failory, which offers resources for startups, 10% fail in year one and 70% fail in years two to five. There are thousands of reasons why startups fail.
According to Failory research from 2021, 34% of businesses fail owing to a lack of product-market fit, 22% due to marketing issues, 18% due to team issues, and 16% due to financial issues. Furthermore, CB Insights, a research firm, ranked the top reasons as running out of funds (38%) and no market need (35%) in 2021. How long have you been in business for? What difficulties are you now confronted with? What will you do to ensure that the business survives another ten years? According to Fundera, a company that assists small business owners in making better financial decisions, paying attention to customers is critical because 14% of companies fail because they ignore customer needs.
Aside from business survival data, I find a lot of facts about customers disturbing. It was predicted that by 2020, customer experience would overtake price and product as the key brand differentiator, and that has already happened. It’s no surprise that many businesses, both locally and globally, have made customer experience a major priority this year. The good news is that, according to a Temkin Group analysis, businesses can expect to expand by 70% in three years if they invest in customer experience. According to a PWC survey, 86% of customers are willing to spend more for a positive customer experience. Furthermore, according to Twilio Segment, a prominent customer data platform, 49% of shoppers made impulse purchases after receiving a personalized recommendation; 44% made impulse purchases after receiving a personalized recommendation. According to a Zendesk study, self-service is preferred by 67% of customers over contacting the business in person or over the phone. These figures all create a compelling narrative!
Customer data has a dark side that is also concerning. Most of us don’t complain after a bad experience. According to a well-known statistic, only one out of every 26 disgruntled customers complain. As a result, complaints must be handled seriously. Many customers vote with their feet after a bad experience. I found some interesting data in a PwC “Future of Customer Experience” survey report published a few years ago. According to the study, one-third of customers would depart a brand they love after just one unpleasant interaction, while 92% would exit after two or three negative interactions. It is well-known that a customer who is dissatisfied is likely to share their experience with more people compared to a happy customer. What are you doing to mitigate the bad effects of negative customer experiences?
We can’t talk about customers without looking at employee data. The most concerning data about employees is their degree of engagement. “85% of employees are not actively engaged or actively disengaged at work,” according to the Gallup State of the Global Workplace study. Employee engagement is linked to the performance of a business. Highly engaged teams, according to the Gallup survey, are 21% more profitable. As a result, the best businesses are focused on increasing employee engagement. Employees who are actively engaged come to work every day eager to do their jobs. How engaged are your employees?
Dr Lucy Kiruthu is a Management Consultant and Trainer. Connect via Twitter @KiruthuLucy