Last week we looked at the two questions that successful businesses ask and answer relentlessly. What business are you in? Who are your customers? In last week’s post, we focused primarily on the first question. Here are some tips on how to get useful answers to the second question.
1. Talk to your best customers first. This should be obvious, but you can get so focused on growth and new customer acquisition that you forget to talk to your existing customers. Start with customers who have already had positive interactions with your business. Ask them what they value most. If they have already recommended you to their friends, ask them how they described your business, its products, services, and benefits.
I am reminded of the event planner whose best customers told her she was actually in the stress reduction business and of the restaurant owner whose best customers told him he was in the family celebration business. These answers tell you who your customers are. Seeing them as “people who are stressed out about an event they are going to host” or “people who want to have a memorable family celebration” will give you ideas about how to adapt and position your services from their perspectives.
2. Embrace the customers who complain. Several years ago, I used an “elevator survey” to test my hypotheses about how our customers saw our business. I asked every customer I rode with in the elevator during a week to tell me their top three complaints about our IT services. Their answers were passwords, passwords, and passwords. “Reduce the number of passwords I have to remember.” So one answer to “who are your customers?” for us was “people who are aggravated by how many passwords we expect them to remember.”
Some of your most valuable customers are those who are not satisfied and tell you about it. Make them satisfied and you will find they become some of your best promoters. You can also use well-crafted satisfaction surveys to learn who your customers are. See my post on measuring customer satisfaction.
3. Expand your definition of “customer.” Many businesses have multiple customers involved in the same transaction. A good example is a university. Frequently the person paying for the university’s services (a parent perhaps) is not the same as the person consuming the services (a daughter or son) and there may be another group of “customers” who are subsidizing the costs through donations (alumni, foundations, taxpayers). Many businesses are realizing that they need to address a broader range of stakeholders beyond the narrow view of who pays for or consumes the product or service.
4. Beware of the limitations of demographic market segmentation. You will notice I haven’t mentioned the traditional approach of market segmentation – sorting customers into groups based on demographic information like gender, marital status, income, location, age cohort, etc. I suspect that one of the reasons this approach is so popular for answering the “who are your customers?” question is that you can do it WITHOUT actually talking to your customers. I am not a fan of demographic market segmentation by itself because it’s like looking at people’s shadows and trying to figure out who they really are.
A possible bridge between demographic market segments and real customers is to create some personas. A persona is a detailed description of a representative imaginary customer who has the composite views, behaviors, and needs of some set of real customers. Personas can be useful in testing out how a business strategy might impact customers and framing the right questions before you actually talk to them.
The bottom line is that your customers are real people, get to know them.