With 2.8 million small businesses employing 4.7 million people, Texas has the second-largest gross domestic product, valued at $1.77 trillion annually. These businesses account for over 97% of companies and employ about 50% of the state’s workforce. All this indicates that the Lone Star is a great place to start a new business but it also means that you will face fierce competition and a number of other challenges.

Running a business takes work and comes with a number of risks that might stand in the way of achieving your goals. While some of these risks will be unique to your business, others are more universal and easily foreseeable. The good news is, there are certain steps you can take in order to manage and mitigate these risks. For instance, purchasing commercial insurance in Texas can help business owners protect themselves, their staff, and their livelihoods.

If you want to know more about it, here are the 7 most common risks that every new business owner in Texas should keep in mind.

1. Compliance Risk

Compliance risk refers to the potential of your business to violate a regulation or a law. Compliance risk can result from insufficient control systems, human error, lack of due diligence, or lack of training. Compliance risk can expose your business to a number of consequences, including material loss, legal penalties, financial forfeiture, voided contracts and damaged reputation.

Staying knowledgeable and up-to-date with applicable laws from federal agencies such as the Environmental Protection Agency, as well as those from local and state agencies in Texas can help you reduce compliance risks. You should also consider seeking assistance from consultants who specialize in compliance and make a habit of reviewing government agency information on a regular basis.

2. Operational Risk

Operational risks can happen externally, internally, or involve a combination of factors.
They include security failure, fraud, legal breaches, environmental risks, or physical failure (e.g. natural disaster or fire). This type of risk can have a negative impact on client satisfaction, your company’s reputation, and shareholder value.

As long as people, processes, and systems remain imperfect, operational risks cannot be completely eliminated. They are, however, manageable if you ensure that you have processes in place that identify and report them.

For instance, many businesses are using cloud storage in order to protect their data and rely on remote teams to maintain operations. Automating more processes can also help reduce failures caused by people.

3. Economic Risk

Economic risk refers to the possibility that changes in macroeconomic conditions (for instance, exchange rate fluctuations or political instability) will have a negative impact on your business.

Even though it is possible, predicting economic risks is quite challenging. It is important to watch trends and changes to potentially identify and plan for an economic downturn. You should also consider saving as much money as possible in order to maintain a steady cash flow and/or operate on a lean budget with low overhead through all economic cycles.

4. Financial Risk

Financial risk refers to a business’s ability to fulfill its financial obligations and manage its debt. It usually arises due to losses in the financial market, instabilities, or movements in stock prices, interest rates, currencies, etc.

One way to decrease the financial loss for your company is to make adjustments to your business plan. These adjustments should include steps that will help you start lowering your debt load. If you rely on the majority of your income from 1-2 clients, your financial risk can be substantial if one of them decides that they no longer want to do business with you. Marketing can help you expand your client base, so the loss of clients won’t have such a devastating impact.

5. Competition Risk

Competition risk refers to the possibility that competitive forces will prevent you from achieving your business goals. This, in combination with an unwillingness to change, might lead to loss of customers and affect your profits.

In order to prevent this, company leaders need to continually reassess the organization’s performance and make sure they don’t become so comfortable with their success and the status quo that they stop looking for ways to make improvements. They also need to work to refine their strategies and maintain strong relationships with their customers. In addition, it is important to keep a close eye on your competitors by monitoring what they are doing and how they use social media and other online channels.

6. Reputation Risk

There’s always a risk that an unsatisfied client, lawsuit, negative press, or product failure can tarnish your brand reputation. Social media has made things even worse by amplifying the spread and reach of negative word-of-mouth. Just a single bad review or comment can significantly decrease your following and cause profit loss.

Having a reputation management plan can help you monitor what people are saying about your brand both offline and online. Make sure to respond to all comments and try to address any concerns as quickly and efficiently as possible. Finally, be sure to keep providing quality products and services in order to avoid product failures and lawsuits that could also damage your brand’s reputation.

7. Security Risk

As more customers use online and share personal data via mobile channels the opportunities for cybercrime are increasing. With businesses increasingly relying on IT systems and data, the risk of cyber threats has increased significantly and last year, the Allianz Risk Barometer ranked cyber incidents as the most important risk to businesses. From malware, DDoS, phishing, data breaches, payment fraud, identity theft, and ransomware, these attacks can have a long-lasting impact on businesses, ranging from damaged reputation to financial loss.

To achieve effective risk management, consider investing in security solutions, fraud detection tools, as well as customer and employee education about how to detect potential cybercrime issues.

Final Thoughts

Doing business in Texas comes with an abundance of risks, and the ones mentioned in this article are just the tip of the iceberg. However, knowing the most common hurdles facing your company can help you prepare an efficient management strategy and improve your chances of success.

Your brand has more valuable resources in research and implementation today than probably ever before. But even with all of this free information at your fingertips, businesses can struggle with the idea of trying to determine the future for consumer demands when it comes to marketing properly.

Data analytics have been able to bring us one step closer to doing so. Your marketing can accomplish this strong bond with your customers at a high level will result in customer retention and loyalty.

But how to stay relevant with these digital trends:

• How do you still advertise to customers and identify their needs?
• How can you continue to spot market trends in their behaviors to find the unified view and execute a new launch/campaign for a product or service?
• How can you offer an exceptional and customized experience online?

There are many things that Customer Experience Analytics can tell companies that will help them provide marketing, advertising, and service teams with more insight into their behaviors.

Here are some reasons you need to consider Customer Experience Analytics as an essential tool to market for your brand’s success.

WHAT DOES CUSTOMER EXPERIENCE ANALYTICS DO?

Customer Experience (CX) Analytics takes customer data for making the best decisions to act upon that will benefit them and add value to their lives. It goes beyond the initial Key Performance Indicators (KPIs) of metrics, giving you more than just numbers.

There are multiple benefits from utilizing them:

• Finding new and improved ways of marketing to serve your customers with new features or updates in technology.
• Locating issues that are within advertising areas to resolve.
• Brand perception – how the customer sees your brand and how it fits them.
• How to fix language in your copy, so it grabs your customer’s attention and keeps it (retention).

FOCUS ON THE CUSTOMER

The customer experience is not focused on any one business function. When utilizing analytics, you gain an understanding of how the customer relates to your brand. Ultimately, you need to identify those areas to provide your customer with the most exceptional experience and market to it. The goal leads to simple retention, so you can ensure that customers will be coming back.

Having the ability to find those intents within your customer helps improve advertisements and data and analytics strategies that will result in new and better experiences. With complete journey mapping and customer tracking capabilities, many marketing teams know how to effectively guide their customers to specific areas that result in positive transactions.

FINDING THE RIGHT SYSTEMS

Before the world of digital, most businesses understood advertising and the importance of the customer experience. Marketing departments usually took data from customer profiles to run campaigns and locate how customers responded to the experience.

The challenge now is that multiple organizations and businesses update technology to track behaviors across websites, emails, applications, and more, but this means that the scale and scope of data are too much for marketing teams, even the more technical-savvy ones.

Without the data to find out whether a customer received offers via direct mail for a product or service purchased vs. interacting online through targeted ads, brands cannot find the insights they need to fix customer experiences to provide better ones.

The key to achieving and finding the right customer experience analytics is finding the suitable systems to integrate. There are analytics for URL shorteners that will drive more truthful customer-focused data without wasting your time so that you can effectively apply the real time actions.

You should look to integrate existing systems (if possible to do so) that might already allow you to have a single customer view and obtain a predictive analysis to deliver the ultimate experience you desire. Don’t unnecessarily purchase something new.

Priorities for long-term success lie within a solid marketing plan, and you should always have laid-out, well-thought-out actions for how you envision the result being (or successful result). In planning the customer experience analytics approach, you should consider these principles:

• Full integration: ensuring all your technology have prebuilt data connectors, like real-time APIs that will allow the CX data to be ready for immediate use.
• Single Customer View: CX data’s goal is to have a centralized function that automates analytics for customer-driven experiences based on recent interactions and behavioral history.
• Firsthand Access: your business brand needs firsthand access to the necessary data to improve the customer experience.

Without the customer, your brand would not work. Marketing the business to create that experience and value is more customized and unique to the customer needs, and your business will rise with a significant impact.

QUANTIFYING THE CUSTOMER EXPERIENCE

Without quantification, a brand can’t automate experiences with assistance from customer experience analytics and other predictive technologies. Data on the customer experience will be so widespread over various systems and processes, and pulling from each will be a difficult task to accomplish. You may have to create teams to spread over multiple areas.

The marketing systems designed that most businesses utilize responsible for the customer experience cannot analyze the behavioral data, either. However, taking from each of these working systems can help gain an entire picture of the customer.

MEASURING THE CUSTOMER JOURNEY

Locating and identifying all of the systems, technology, and processes your customer uses will help paint a picture of your customer journey. Both prospective customers vs. loyal customers are important to measure so that your brand can continuously improve its offerings or products, expertly fitting needs.

Creating an effective customer journey report can be extensive but valuable if you include the following components:

• Key Performance Metrics (offer comparisons and track)
• Retention Rates
• Customer Engagement & Sentiment
• Customer’s Revenue

When you can measure the customer journey, your business can then advertise accordingly to eliminate any negative impacts or address issues upfront, prioritizing your customer experience.

CATEGORIZING CUSTOMER’S NEEDS

Instead of waiting for the customer to become upset to identify the issue, you must establish a pre-action plan. You would like to know what the potential factors or risks are ahead of time.

Categorize customer needs by following these tips:

• Organize: create different customers with various needs your brand can solve. Span multiple customer issue scenarios to get as many covered as possible.
• Develop: build experience and marketing strategies that address each of the scenarios that you have set up. Have your teams create products/services that specifically deliver on the needs of your customers.
• Market: advertising to various types of people and instances that will be the best fit for your brand’s services or products. Make sure it is different for each specific scenario or customer so the experience becomes customized.
• Assist: when the customer comes directly to your brand, make sure you can accurately address their needs by asking questions to market the services or products they genuinely need. They will have a customized experience, and the action paves the way for a trusting relationship.

Remember that your brand of business needs to be offering something of value. Most customer experiences usually relish that a company tends to over-deliver on their promise to fit their needs, which creates a great experience.

UTILIZING THE ANALYTICS

Customer Experience Analytics will provide your brand with a more in-depth look at your customer behavior and mindset. Take in as much feedback as you can to learn and advertise better. There is always room for improvement. Envision and create your analytics for your marketing infrastructure so that your data is as accurate as possible.

Keep in mind that the data is not 100 percent – the central role of the analytics is to provide support for your predictions. But the more you continue to use customer experience analytics, the more benefits you will find that you can refine and improve over time, developing those lasting relationships for a profitable future.