It’s no secret that understanding your customers is essential to any business’ success. After all, without customers, you wouldn’t have a business at all!
But what’s the best way to go about understanding your customers? And how can you do it without breaking the bank?
Here are 9 simple (and cost-effective) ways to get to know your customers better.
1. Talk to them
This one may seem obvious, but it’s worth mentioning. The best way to understand your customers is to talk to them directly! This can start before people even become your customers by interviewing prospects to understand their challenges.
This isn’t the time to launch into a sales pitch or introduce your products. Instead, you’re trying to learn what their current pain points are and how they are currently addressing them. This can help you identify the real benefits of your product, the language you should use in sales materials and whether there’s problems they need solved before they even consider your services.
This approach can also identify if your product is fit-for-purpose or help you develop a new solution.
For your existing customers, it’s equally important to ask them about their challenges and pain points as you might identify ways to adjust your solutions to make them more appealing or effective. Find out what they like and don’t like about your product or service and ask them to list and prioritise features they’d like to see. It can be valuable to use a technique known as ‘dotmocracy’, where you give them a set of 3-5 sticky ‘dots’ they can allocate to features most important to them. This can quickly help you identify which potential new features they value and which they don’t.
You can talk to your prospects and customers in person, over the phone, or even via email or social media. Just make sure you’re actively listening to what they have to say, and not just waiting for your turn to speak!
2. Observe them
In addition to talking to your prospects and customers, it’s also helpful to observe them. Ask them if you can ‘shadow’ them for an hour or two as they go about their day. If they agree, also ask them to ‘work out loud’, sharing their thinking and decisions guiding their actions as they work.
You only need to do this with a few prospects or customers to begin to observe how they really go about addressing challenges or using your product.
How do your prospects perform tasks your product or service supports (before they buy from you)? How do your customers interact with your product or service? What do they do (or not do) when they’re using it? What challenges do they run into? And how do they overcome them?
This may identify improvements for your product or service to make it easier to use in their workplace, or valuable new features that would help your customers save lots of time. You might even identify some features that you want to redesign or drop because they’re not adding value.
You can observe your customers directly (if you have the opportunity) or indirectly (by watching how they interact with your product or service online). If you’re doing this online you are missing out on seeing everything they do outside of your products and services, as well as their thinking, so if you are able to shadow customers in person it’s worth the investment.
3. Read their reviews
Another great way to understand your customers is to read what they’re saying about you and competing solutions online. Check out review sites like Yelp, Google, and Amazon. See what people are saying about your business and your competition. Pay attention to both the positive and negative reviews, as they can both provide valuable insights.
You may also wish to look for forums, Facebook or Reddit groups where people are discussing the challenges that your product or service helps solve. Understanding how people speak about the challenge and how they go about solving it without your solution will help you understand which features and benefits are most appealing to prospective customers.
4. Analyse your website traffic
Your website is a goldmine of information about your customers. By analysing your website traffic, you can learn a lot about who your customers are, what they’re interested in, and how they found you. There are a number of free and paid tools you can use to track your website traffic, such as Google Analytics.
You’ll want to look at how prospects and customers find your site and where they initially land. While many people assume their home page is the first page visited, and spend the most time getting it right, it could be that many of your site visitors come from a search engine or a link in another site directly to a page deeper in your site.
Also what people are searching for to reach and when at your site can give you insights as to what challenge site visitors are seeking to solve. If they are searching for something your product doesn’t do, then you’re likely to see these people bounce out of your site quickly to go looking elsewhere – possibly in your competitors’ sites, so understand the keywords they are using and what their intent is in coming to your site.
Also look at what pages they visit on your site and the path they take through the site. Do they visit the same pages regardless of how they found your site? Do they visit different pages depending on how they found your site? What’s the most popular page on your site?
And once they are on a product page, do they stay on that page or quickly leave? If they do stay, for how long? Do they look at other products? Do they add items to their cart? Do they abandon their cart? And if so, why?
5. Analyse your customer data and activity
If you have, or can build, a database of your customers, take some time to analyse it for trends and patterns. What do your best customers have in common? What do your worst have in common? What is similar about your most profitable customers?
You may have activity data you can use to see how customers interact with your product or service. Do they use it frequently? Which features do they most commonly use? When are customers most likely to cancel their subscription (and can you do anything about this)?
If you have a subscription-based product or service, you can also look at customer churn data to see why people are cancelling or ‘riding’ your service without using it. This can give you a good idea of what you need to keep people engaged and ensure they keep paying you.
6. Keep track of customer service issues
If you have a customer service team, they’re a great resource for understanding your customers. After all, they’re the ones who are talking to your customers daily! Make sure to keep track of the issues that your customer service team is dealing with. This will give you a good idea of the problems that your customers are having.
If you don’t have a customer service team, then make sure you have systems to capture customer compliments and complaints so that you can analyse them later.
Look for patterns in the challenges people have, there may be something in your product or service that isn’t intuitive or performs poorly. Sometimes you can address these issues by improving your support documentation and videos, other times it may require a review of how your solution works and improvements to how it functions.
7. Use social media
Social media is another great way to get to know your prospects and customers. By monitoring what people are saying about you on social media, you can get a good idea of what they think about your business. You may also be able to monitor what people are saying about your competitors, as well as more broadly about the challenges your products and services solve.
You can also use social media to interact directly with your prospects and customers and it’s a great way to test different sales approaches cheaply to see which resonates best with different audiences. This can be done both through posting on your social channels or investing a small amount in social media advertising to test different ad copy quickly.
8. Analyse your sales data
Don’t forget to keep track of your sales data. Understanding your entire sales funnel and how you engage and warm prospects, convert them to customers and then resell to them over time is critical in building a business that is repeatable and sustainable. If you know you need 50 leads to get one sale that gives you an idea how much you will need to spend on marketing to win a new customer. And it allows you to begin testing different sales approaches to increase your conversion rate – for example so you only need 20 leads or 10 leads to get a sale.
Your sales data will also help you improve how you engage with prospects and customers – what benefits and outcomes motivate them to buy, and which don’t.
It can also help you identify trends and patterns over time – such as seasonal buying trends or specific events that trigger a buying decision. For example, when someone buys their first home, they may have an increased interested in buying furniture. That provides an opportunity to engage these people in a different way, such as by partnering with selected real estate agents to offer first home buyers a discount or free delivery when they purchase furnishings from you.
9. Try customer journey mapping
With all the information you’ve collected through the methods above, you’re in a great position to journey map the process your customers go through from prospect to happy customer, and where they have positive and negative experiences along the way.
Customer journey mapping is a great way to understand the steps your customers take as they interact with your business. It can help you identify any pain points or challenges your customers face. It can also help you identify any gaps in your customer service.
You can use a customer journey map to understand the steps your customers take before, during, and after they make a purchase.
Journey mapping can be a bit of a challenge, but there are a number of great articles and templates out there to help you get started.
Understanding your prospects and customers is essential to any business’ success. But it doesn’t have to be expensive.
By using some (or all) of the methods above, you can get a good idea of who they are, what they want, and how to better serve them.
And in the interests of learning – let us know how you go at putting these methods into practice!