How to understand your customers better than your competition
Where there’s a market, you’ll find competition for customers.
All business is customer dependent. A company succeeds by outmaneuvering its competition to gain and retain a finite customer base. Net revenue – the holy grail of business – is at its core simply a metric of how efficiently businesses accrue and respond to customers.
Understanding customers is crucial for any business. How important? According to a study by PwC, one-third of customers who have a bad experience will break up with a brand.
Effectively understanding your customers requires more than identifying archetypes, demographics and pain points, however. Knowing them and offering solutions to their problems entails:
- Customer experience tracking
- Empathetic customer service
- Organizational flexibility
- Data-driven analysis
Below, we outline a fool-proof strategy for gaining better insights into current and future customers than your competition has. (At least, better than the competition that hasn’t read this.) It’s an achievable goal. Follow these steps to create an engaging customer experience that the competition won’t be able to match.
Five steps to better understand your customers
It takes humility to truly understand customers. Your business needs to listen, communicate and observe its customers before it can efficiently market and sell to them. Customer preferences and pain points continually evolve and change. Follow these steps to make sure you meet customer expectations – and preferably exceed them:
1. Maximize time spent interacting with customers
Customers build relationships with brands and companies. As with any healthy relationship, time spent together is critical.
You want to nurture your customer relationships by providing easy and ample opportunities for them to interact with your company and brands. Doing so allows you to understand the values, perspectives and needs driving customers to your product. It builds trust.
Creating opportunities for customers to interact with your business, either online or physically, is a great way to build community. This may happen via an open house (physical interaction) or scheduled community event. In reality, though, you’ll find most opportunities online.
It’s essential to set up an omnichannel, ever-present experience for your customers. This allows them to engage with your company at their convenience – where and when they want. Make sure your customer experience is seamless. Switching from app to web browser should be as easy as changing from your PC to phone for email.
Unlike deep personal relationships, when it comes to B2C interactions, quantity beats quality. In their book, The Like Switch, Jack Schafer and Marvin Karlins note that one key to gaining people’s trust and becoming liked by antagonistic or neutral third parties is consistent presence.
Repetitively invite customers to interact with your company. Personalize the customer experience. Soon, customers’ relationship with your brand will strengthen, and they’ll be more likely to look to you first to solve their problems in the future.
2. Listen to your customers
Customers love to be heard – not just when they have a complaint, either.
Collect direct customer feedback whenever possible. Customer service is fundamental in all sales protocols, obviously, but you should solicit feedback if you want to build loyalty by meeting your customers’ needs.
Asking customers about their satisfaction with your product is a win-win for your business. First, it provides your marketing and sales teams valuable feedback about how to market and sell the product. Are there insights you can use to gain a marketing edge over the competition? (Almost always!)
Second, incorporate the feedback into product development. Perhaps you aren’t maximizing all of the best-use cases for your product. Maybe by adding a new feature, your product will appeal to an even broader customer base and improve satisfaction among existing customers.
Reach out to customers and solicit feedback. Don’t wait for them to come to you – which generally happens after a less-than-stellar experience. Social media, email surveys or giveaways to get them into the store or shop online are viable options to get to know your customers better.
3. Track and analyze every touch point in the customer experience
The goal of getting to know your customers better is to find their true motivations and identify their actual needs. The word “actual” is used intentionally. Often, customers don’t know what they need. They only know they have a problem to solve.
You need to track your customers at all times and across all channels to do this effectively. Why? Data insights allow you to unearth the true, hidden motivations behind people’s actions. You might find the pain points customers think they have are derivative of problems far more meta. You can then market to your customers’ root needs – perhaps needs they don’t even know exist.
4. Observe how customers use your product for innovation
Don’t only observe customers in the marketing and sales funnel. Follow them home or to work – metaphorically – to monitor how they use your service or product.
Customers often highlight the path to new markets or use cases based on using a product, rather than using it for its intended purpose. Are there ways you can enhance what you’re selling to improve the user experience? Are there new ways to market your product to appeal to new customers and differentiate from the competition?
Such innovation typically won’t come from inside your research and development teams. Observation can tell you what your customer pain points are today and offer insight into tomorrow’s needs.
5. Keep an eye on the competition
There are two types of competition to keep tabs on at all times – direct and indirect.
You need to monitor how your direct competitors are marketing their services or products. Note how they might be trying to differentiate and offer customers added value to gain retention.
Observe and match direct competitors’ moves to keep current customers content and neutralize the competitions’ ability to differentiate radically. Then use your understanding of your customers from the previous stages to outshine competitors in customer experience and innovation.
Don’t fixate on direct competition alone, though. Remain alert to disruptive innovations that may not be affecting your industry yet but could turn it upside down tomorrow. This type of indirect competition is just as important to monitor.
What’s missing? Understanding customers requires the right software platform
Be forewarned. To implement the above strategies correctly, you will need to collect large amounts of customer data.
Today, the most customer-obsessed companies have incorporated or transitioned their marketing and sales teams to post-CRM, customer-experience software like Optimizely’s Digital Experience Platform (DXP).
Cloud-based, AI-infused DXPs allow your company to collect, access, analyze and act upon customer data to understand exactly how best to help customers. DXPs have built-in automation, with real-time insights about your customers’ position in the customer journey. They allow your marketing team to experiment with personalized content based on customer tracking.
Implement a DXP solution with the five-step strategy above, and you will understand customers better than the competition, reap maximum ROI and ultimately, reach maximum customer satisfaction.