In Part 1 in this series of 3 posts on understanding your customers, I covered the basics. In this part I’d like to cover some of the main ‘Do’s’ when it comes to improved customer understanding. If you missed part 1 – click here!
Above all – Listen to your customers
There are some notable exceptions to this rule, a very good example being Steve Jobs. Jobs was never interested in customer research or focus groups. He would never design by committee and absolutely would not budge on what he thought was right, or rarely. However, Jobs was one in a billion. If you’re the new Steve Jobs, then go and create. If you’re not, then here a few pointers that will stand you in good stead.
Spend as much time with your customers as possible, no matter what your job is. Talk to them about their business, what keeps them awake at night, what drives them, what success looks like for them and what challenges they face. I’m sure there is absolutely a place for formal market research and business intelligence reporting in your organisation, but there is NOTHING that equates to one on one time spent listening to your customers’ needs, wants and values.
A secondary method to gain valuable insight into your customers (and your people and processes) is to listen to customer phone calls. Many organisations now record their customer calls for training purposes, but how many senior managers, marketers, sales people and product managers listen in? You can gain a huge amount of knowledge by spending an hour a week or even a month listening to customer support or sales calls. Some forward thinking organisations even make a selection of pre-recorded calls available on their intranet or via a phone number so that people can dip in and out when they have some downtime.
Thirdly and growing in importance every day is to listen via social media channels to what your customers are saying about you, your competitors and what’s important to them. Even today, some businesses large and small are completely absent from social media and they’re missing some great insight. Even worse are the organisations that just push out messages about their products and services without engaging with their customers and prospects.
Put yourself in your customer’s shoes
Whatever you’re doing in your organisation, and at whatever level, be it designing a new product, introducing a new process, outsourcing part of your business, streamlining production, introducing a new phone system, running a marketing campaign or selling face to face, before you execute and I would suggest at the earliest part of the planning phase, put yourself in the shoes of the customer.
I’ve found that a really good way of getting inside the head of your customers is to create some fictional personas for the different customer types that you have or wish to attract. Below is an example of a persona for a small business looking for a Customer Relationship Management system for their small business. It just happens to be myself and Oak Consult. I’ve found a great one by the way – Capsule CRM!
Below are just a few questions that will help you build your personas. Really try to visualise a few different customer types, ages and gender. You’d be amazed at the different answers to the same questions!
How would you like to be treated?
What would someone have to say to you for you to be interested in buying a product or service from them?
How and where would you like to buy?
Where would you go for help and advice and what would that look or sound like?
What service levels would you expect?
How important is this product or service to your business or your personal life?
What are your main business challenges that you need a solution for?
If you found the persona example useful you can download a PowerPoint template here
Carry out a fitness test
Try these “Be the Customer” exercises with your organisation:
- See if you quickly can find the information you need on a particular product or service, either on your website, in your store or in your marketing materials.
- Find out how labour intensive your processes are in your organisation – phone, web, email, paperwork, face to face FROM YOUR CUSTOMERS PERSPECTIVE
- See how many buttons your voice mail system asks you to push before your questions are answered or you get to a live operator.
- Experience the difficulty of your return policy or in getting a return call.
- See how knowledgeable your staff is on issues of customer importance.
- Compare how your competitors treat you as their customer.
- See if your overall customer experience gives your customers a reason to stay emotionally engaged in your product / service / organisation or a reason to recommend you to a friend.
Carry out Customer Research
While there are many ways to perform customer research, most businesses use one or more of five basic methods: surveys, focus groups, personal interviews, observation, and field testing. The type of data you need and how much money you’re willing to spend will determine which techniques you choose for your business.
With concise and straightforward questionnaires, you can analyse a sample group that represents your target or actual customers. The larger the sample, the more reliable your results will be.
In-person surveys are one-on-one interviews typically conducted in high-traffic locations. They allow you to present people with samples of products, packaging, or advertising and gather immediate feedback. In-person surveys can generate response rates of more than 90 percent, but they are costly.
Telephone surveys are less expensive than in-person surveys, but costlier than mail. However, due to consumer resistance to relentless telemarketing, convincing people to participate in phone surveys has grown increasingly difficult. Telephone surveys generally yield response rates of 50 to 60 percent.
Mail surveys are a relatively inexpensive way to reach a broad audience. They’re much cheaper than in-person and phone surveys, but they only generate response rates of 3 to 15 percent. Despite the low return, mail surveys remain a cost-effective choice for small businesses.
Online surveys usually generate unpredictable response rates and unreliable data, because you have no control over the pool of respondents. This can be improved if you have a high quality email list and an engaged online audience. Online surveys are a simple, inexpensive way to collect anecdotal evidence and gather customer opinions and preferences.
2. Focus groups
In focus groups, a moderator uses a scripted series of questions or topics to lead a discussion among a group of people. These sessions take place at neutral locations, usually at facilities with videotaping equipment and an observation room with one-way mirrors. A focus group usually lasts one to two hours, and it takes at least three groups to get balanced results.
3. Personal interviews
Like focus groups, personal interviews include unstructured, open-ended questions. They usually last for about an hour and are typically recorded.
Focus groups and personal interviews provide more subjective data than surveys. The results are not statistically reliable, which means that they usually don’t represent a large enough segment of the population. Nevertheless, focus groups and interviews yield valuable insights into customer attitudes and are excellent ways to uncover issues related to new products or service development.
Individual responses to surveys and focus groups are sometimes at odds with people’s actual behaviour. When you observe consumers in action by videotaping them in stores, at work, or at home, you can observe how they buy or use a product. This gives you a more accurate picture of customers’ usage habits and shopping patterns.
5. Field testing
Placing a new product in selected stores to test customer response under real-life selling conditions can help you make product modifications, adjust prices, or improve packaging. Small business owners should try to establish rapport with local store owners and Web sites that can help them test their products.
Share your understanding
Sharing customer insight across your organisation can be a key competitive advantage and doesn’t have to cost the earth. Simple knowledge management tools such as Yammer and more complex and costly cloud hosted CRM tools like Salesforce.com allow you to capture and share customer information in real-time and across the globe.
Full adoption across an organisation of these kinds of tools has often faced challenges in the past because employees either find it an inconvenient use of their time or a flat-out threat to their individual business value.
Technology advances are offering the ability to incentivise shared usage through better tracking of new sales, improved business and customer retention that results. Suddenly, sharing what you know becomes the most attractive option available: the more links back to your know-how, the better positioned you are as a valuable team player. And the more often your experience directly contributes to helping the business, the bigger percentage of commissions or bonus you may see.
I will come back to this very broad topic of ‘Customer Knowledge Management’ in a future post.
I hope you enjoyed part 2 of Wake up and understand your customers. The 3rd and final part will be covering the ‘Don’ts’ of understanding customers. – Click here for Part 3.