by Sev Geraskin
Mon Jan 30 2023
Trust will make or break your startup.
Trust is what closes the deals and makes customers buy your products. Trust is why people return to the same stores or buy the brand. People trust the brand based on their previous experiences with that brand's products and services.
Your startup level of trust with your customers will determine your ability to acquire, retain, and monetize them.
As the saying goes, you cannot manage what you cannot measure. So how do you measure customer trust?
Customer trust has six measurable components: satisfaction, sentiment, loyalty, churn, virality, and value.
First of all, your startup should focus on customer satisfaction. Customer satisfaction influences customer sentiment, loyalty, churn, and virality. You can measure customer satisfaction via surveys and feedback, product and customer service ratings, and response times.
Your customer sentiment is your brand reputation and influences your customer virality. The sentiment is cumulative of your reviews, social media comments, and google searches. You can measure your customer sentiment via social media channels and how others speak about your company. You can also calculate the share of voice to determine what percentage of people are talking about your brand as opposed to your competitors.
Customers you gain trust with are much more likely to engage with your company and repurchase your products. You can calculate the repeat purchase rate to measure customer loyalty or how many customers repeatedly buy your products and services.
Also, keep track of your customer churn. Your customers churn because they lose trust in you. A startup could cause churn by promising too much and not delivering, thus causing a mismatch between customer expectations and reality.
Measure customer virality using Net Promoter Score (NPS), and determine how quickly your business grows via word of mouth. NPS is a simple tool that asks customers to evaluate how likely they are to recommend your product or service to others. Viral cycle time, or how long a user invites another potential user onto your product or service, is one of the best indicators of your growth. A high NPS will decrease your viral cycle time.
Customer loyalty, churn, and virality will influence your startup's profitability. One of the most critical measures of a successful startup is the Lifetime Value of Customer (LTV). Use LTV to identify high-value customers and market segments. If you acquire and keep customers cheaply, you will be in a great position to grow your business.
A startup customer journey starts with customer satisfaction and ends with monetization. Use customer satisfaction, sentiment, loyalty, churn, virality, and value as your compass.