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How To Keep People On Your Side When Your Startup Makes Changes

These three tips keep you from alienating people when your company begins to pivot.

How To Keep People On Your Side When Your Startup Makes Changes
[Photo: Flickr user Epic Bets]

Startups constantly look to pivot. But like a horse with blinders on, our tunnel vision during the process can leave a lot out of the picture.

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The most dangerous of these exclusions include our previous core mission and the clients who were best served by it.

The fact is, whether we do a complete 180 or only a 0.03 degree turn, there’s inevitably a client who finds himself outside of our field of vision. Building a strong client base is a juggling act, and having your eye on the ball isn’t enough to keep the countless other ones from slipping through your fingers.

Instead the key to winning the customer retention challenge is keeping our head on a swivel. We must maintain focus on where we’re heading while keeping an eye out for those we may be leaving behind. We need to be able to anticipate churn risk and act to prevent or reduce it.

As your startup grows and changes, here are three ideas for managing and eventually eliminating high churn rates.

1. View Your Strategy Through The Lens Of Retention Issues

Last year my startup, TalkLocal, began driving revenue for the first time. This was the result of certain strategic changes. We started investing our lead generation dollars into the industries that had the strongest ROI record while actually reducing our overall marketing spend. The result was fewer but higher-paying calls to our clients.

Of course, that meant that paying companies in the less profitable industries heard their phone ring less often. Worse than their negative feedback was our sincere surprise. We thought, “How could these people be so dissatisfied when we’re growing and doing better than ever?” It was an indictment of our due diligence.

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The reality is that even the slightest pivot puts retention at risk. So know where that risk is coming from and be prepared to handle it.

2. Be Flexible To Ensure Your Cost Always Matches Your Value

Fortunately, because TalkLocal only charges companies per live conversation, those clients were only disappointed by the decreased volume. They didn’t feel ripped off. They got less, so they paid less. We were able to continue maintaining those relationships for a time when a stronger pivot will be strategically viable for those companies.

Once you know how strategic choices or even unexpected hazards are impacting your value for a certain constituency, take action to retain a strong alignment between your costs and your value. Maybe reach out to disaffected customers with a limited-time offer to modify the cost of doing business to match what you can currently deliver. Don’t wait until they call you.

3. Recruit With Retention In Mind

Your sales team isn’t just selling a product. They’re delivering value. So target prospects for whom you can drive the biggest value. Deepen your roots in your best strongholds before trying to branch out. Otherwise, you risk creating dissatisfied customers. Many mismatched businesses sign up for our service. It would be easy to increase our member numbers, but we don’t pursue those leads. You have to know when a prospect just isn’t a good fit.

All too often, startups in the local services sector have a clear vision when it comes to building new verticals and chasing their biggest revenue drivers, but they lack the insight to keep an eye on who gets left behind when they head in that promising new direction.

Gaining a new multifaceted perspective when pivoting will reduce the high churn rates plaguing not just the local services industry, but all startups that face this issue during periods of high growth.

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Manpreet Singh is founder and president of talklocal, a local startup that helps consumers find high quality local professionals in minutes.

Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched StartupCollective, a free virtual mentorship program.

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