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6 Acronyms Every Startup Needs to Know
There’s no shortage of acronyms in the workplace. Spurred by efforts to communicate more efficiently and more quickly, acronyms have infiltrated our vocabulary. Not knowing the meaning or significance of an acronym can be frustrating, to say nothing of leaving one out of the loop. Following are six acronyms that every startup founder ought to include in his/her vocabulary.
Customer relationship management (CRM) is the set of tools and systems used to manage your company's relationships and interactions with customers and prospects. CRM systems contain essential information about customers, including contact details and purchase history.
Establishing a robust CRM system is mission-critical for startup founders intent on optimizing customer relationships. The objective is to facilitate finger-tip access to all information about a prospect or existing customer, thereby eliminating wasted time spent searching for information. According to Nucleus Research, data accessibility for salespeople reduces sales cycle by 8-14%.
Account-based marketing (ABM) is a sales and marketing approach that involves targeting a carefully selected set of high-value customers using a very personalized approach. It focuses on quality, not quantity. ABM has experienced much fanfare among sales and marketing executives - and for good reason. Research by ITSMA found that 84% of B2B marketers believe ABM generates greater ROI than other approaches. It's no wonder 90% of B2B marketers deem ABM “extremely” or “very” important to their strategies, as research by SiriusDecisions has found.
Customer lifetime value (CTLV) is an estimation of the net profit a customer will contribute to a business over his/her lifetime. As a startup founder, it’s crucial to keep a close watch on CLTV. One of the most effective tactics in terms of optimizing CTLV is to increase customer engagement and retention. In one study, 61% of small and medium businesses report that more than half of their annual revenue comes from repeat customers. Research by Bain and Company found that repeat customers spend 67% more than new customers do.
Relationship Intelligence (RI) is one of the powerful tools in the startup founder’s toolkit. RI involves understanding your firm’s complete network of relationships, including your first and higher-order degree relationships with customers, investors, partners, etc. RI tools such as Affinity analyze your repository of email and other communication. By understanding the intricacies of their complete relationship map, startup founders are able to identify which individuals in their network are best able to provide warm introductions and referrals to new business growth opportunities.
One of the defining factors in determining whether you have a sustainable business is your customer acquisition cost (CAC). This metric is at the core of any viable business. If you are spending more money acquiring customers than you are generating from them, you're setting yourself up for defeat. At a basic level, CAC is defined as the average sales and marketing outlay per customer acquired. It is typically calculated as follows:
CAC = Total cost of sales and marketing / # of customers acquired
Understanding and managing your CAC will help you make more informed business decisions and will help fuel long-term growth.
Word-of-mouth marketing (WOMM) is an essential strategy for startup founders. WOMM involves leveraging existing customers and relationships to spread positive sentiments and testimonials about your brand, product, or service. WOMM is the highest-yielding form of marketing. Consumers enjoy discussing their experiences with a brand. Case in point: the average consumer mentions specific brand names 60 times per week in conversations, according to research by TalkTrack. And consumers like to listen to others’ experiences with a brand: According to a recent Nielsen study, 82% of Americans seek recommendations from close connections when considering a purchase. Due to its low execution cost, WOMM is a perfect tool for startup founders who are often budget-strapped.
Acronyms have been around for much of human history. As early as ancient Roman times, acronyms were used to streamline communication. In fact, many acronyms that emerged during the Roman Empire such as AM (ante meridiem, meaning “before noon”) and PM (post meridiem, meaning “afternoon”) are still used today. When you're in the know and able to understand the meaning and importance of commonly used acronyms, you'll be able to communicate in a more efficient way. For a startup founder, there are never enough hours in the day. Every second counts.
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