Way back in the olden days I can envision a prehistoric man trapping a small animal of some variety and trading it to another prehistoric man for a new spear. And at that precise moment in time, the first entrepreneur and the first customer were born. Now suppose that this first entrepreneur continued to trap small animals and trade them to other “customers” for the basic necessities that they could provide. This economy worked reasonably well until something happened. Another prehistoric man decided to do his own trapping and he too made his “product” available for trade. But a funny thing occurred. He was willing to trade it for something of less value than the first entrepreneur. So “customers” flocked to him leaving the first entrepreneur with “unsold” “inventory.” And thus, competition was born.
Ever since the earliest days of commerce, entrepreneurs have developed a rudimentary understanding of their customers. More recently, highly sophisticated techniques and technologies have been created to aid with this customer understanding. Yet still, a vast number of businesses do not truly have the depth of customer knowledge that is necessary to consistently win. How could this possibly be considering the amazing advances that have been made since prehistoric days? The answer is relatively simple. Many entrepreneurs have not chosen to make their customers the absolute primary focus of their business. Much time and effort are spent improving processes, creating systems, increasing productivity, cutting costs, managing revenue and a host of other business practices. There’s no question that all of this is necessary. But from where does it emanate? If it starts with the bottom line instead of with the customer, the road may be rocky.
A customer-centric business starts with the basic question, “How well do I really know my customer?” Most of us think we have a pretty good idea who our customers are and what makes them tick. But I’m willing to bet that we probably have only scratched the surface with respect to the depth of our customer knowledge. Do we know the stratification of age cohorts across our product and service offerings? That’s an easy one. Do we understand the subtle preferences, needs and desires of these different age groups? Have we spent much time fine tuning our products and services to address this information? Oh sure, we perform ongoing customer surveys. But often they are designed to determine whether our customers are satisfied with our products and services. How much survey work do we do to get to know our customers better? We suspect that live customer focus groups might provide some valuable insights, but we believe that this approach is too expensive, something left to big corporations or we have no idea how to go about implementing such focus groups.
I submit that we all need to step back and take a deep breath. Then we need to pull together our team and begin to examine just how we are going about a deep dive into customer understanding. I’m championing this effort in my own companies and believe that it may dramatically transform our product and service offerings. Big Data is a treasure trove in this regard. We’ll be combining extensive demographic studies with customer focus groups, surveys and other initiatives to know for certain that we absolutely understand exactly what our customers need and want. We are looking for more than just what our customers tell us, however. Big Data will help us go beyond the obvious and identify the buying habits and other trends with our customers that might not be readily apparent. And then with the customer front-and-center, we’ll make sure that our products and services precisely meet those needs and wants – stated and unstated.
Developing a deep understanding of what our customers really want and need, will help us create more customer-centric organizations. Then we are able to align our products and services with this customer focus that will manifest in high levels of customer satisfaction and greater profitability for our enterprises.
This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.