9 Ways Entrepreneurs Can Learn From Their Customers Mike | March 10th, 2014
In this series, I have typically chosen a group of people and looked at the unique things they do from which we can all learn. These lessons have sometimes been silly, and sometimes serious, but they have always tried to focus on how, as entrepreneurs and managers, we can draw lessons from the world around us.
As management has become increasingly data-driven, the best managers have developed a facility with extracting and analyzing data: market data, competitive data, and (mostporno of all) customer data. The information we collect on our customers can help us to develop new products and services, test marketing campaigns and pricing models, and find ways to more efficiently deliver value to our intended audience. The best way to do this is by asking questions and looking to your existing customers for the answers. Those questions will necessarily vary from business to business, but the commonalities within a customer or user base are striking. Here are 9 ways that virtually any business can learn from their customers and how to do so.
1. Customers complain. It’s inevitable. They will complain, they will be frustrated and they will let you know it. So if they’re gonna do it anyhow, the best thing you can do is make it frictionless for them to do so. Make yourself available via phone, website, and email and be sure to listen when they speak.
2. Customers explain. They have ideas and suggestions, too, and good managers learn to listen closely to those. It is important to listen closely when your customers complain and ask them for feedback and ideas for how you can improve.
3. Customers behave. No matter whether your business is online or off your customer’s data can be mined for insight into their behavior, their preferences, and their habits. Track their data and understand why they do what they do and use those insights to improve your product and better your ability to respond.
4. Customers leave. As often as not, customers have choices and, for now at least, they have chosen you over your competitor. This doesn’t mean they will stay with you and when they do leave, you need to understand why. Exit interviews or surveys are an excellent tool for gathering this information. Be sure to offer an incentive to help motivate a customer to respond and to share information with you. Even a $5 Starbucks card goes a long way to improving response rates.
5. Customers talk. Monitor social media carefully for mentions of your company. Set up simple searches so that you know whenever someone is talking about you on Twitter or Facebook and be sure to respond quickly and professionally. It tends to impress people to see that you are paying attention and is a wonderful way to strengthen relationships with your customers. 6. Customers leave a trail of breadcrumbs behind. How often does an individual come in your store or visit your website? What is the average value of their purchase or contract with you? Pay close attention, follow them closely and pick up those crumbs to better understand how you can serve them.
7. Customers are smart. It is not at all unusual for a customer to teach you something about your product that you might not have even thought of. People who use your product or service might understand more about it than you do, or at least bring a different perspective from which you can learn. Respect their intelligence and focus on what they have to say.
8. Customers are not so bright. This is not to say that they aren’t smart people, it’s just to point up the importance of clearly and simply describing for them what they are buying. One of the best strategies for converting potential customers into paying customers is to do a great job describing exactly what you are selling and setting customer expectations. I wrote last week about reducing refund rates, and this is a key tactic to execute. Research shows that customers who get exactly what they expect are happier and much easier to retain.
9. Customers are in it for themselves. Remember that they are not here for you, they are here for themselves. In a transactional relationship, it is critical to understand the motivations of your customer, and this starts with the recognition that they will only stick around as long as they perceive the value of the transaction and believe it to be favorable for them. Work continuously to show them the value offered and they will continue to buy your product!
Photo: Jon Dawson