Two years past a study by IBM Institute for Business worth and Oxford political economy found that ninetieth of Indian startups fail at intervals 5 years of gap search. Another more recent report said that the 5 best-funded startups in India combined, hemorrhaged more than a billion dollars in 2018. These top five losers – Paytm, Flipkart, MakeMyTrip India, Swiggy and Zomato – are also household names each valued at over a billion dollars and more than a decade old with millions of customers on their books.
This mindless chase for customers is not exactly helping even the best among us. It should therefore not come as a surprise that ‘running out of cash’ is the second most common reason among the top 20 reasons why startups fail, the first being an even more ridiculous reason – ‘no market need’ according to an April 2019 report by Cb-insights.
The writing on the wall can’t get any bolder. The Indian startup ecosystem is a little over a decade old now. Luring customers with cashback and deep discounts might have worked in the past. But the same ecosystem has since moved into the post-cost arbitrage environment where old ways of thinking are not helping. While the lure of a good deal or waving cash at customers may seem helpful in on-boarding new customers, it is not enough to retain them or earn their long term loyalty.
At a recent startup conference on customer experience or CX, almost every executive in the room who saw the fallacy in blindly chasing customer numbers also said that they valued CX more. The CIO of a growing healthcare chain specializing in maternity, childcare and fertility said, “Pregnancy is not an illness but wellness. Every aspect of the pregnancy and delivery should be celebrated and the customer deserves the best experience during this time.”
The product head of an online travel business said, “We focus more on engagement and solving the base problems as it is evident that these engagements will eventually lead to conversion into loyalty within the product and facilitate in building retention.”
