Deep understanding of the customer is essential to a successful business
Knowing your customer seems like an obvious requirement when launching a new business or expanding a product line, after all we’ve been told about its importance in most business or marketing courses. What we don’t typically hear is that without a “deep and first-hand” knowledge of the customer we are likely to fail in business. This intimate knowledge of the customer cannot be gained through online research, report analysis or a mass survey. Talking to your customer, in fact, talking to many of them, will give you a deep understanding that will help you succeed, maximizing time and budget.
Without a customer that is willing to pay, there is no business. A customer is willing to pay when they have a big enough problem that is solved by a product or service. The bigger the unsolved problem, the highest the likelihood that they will buy. This is not to say that there aren’t successful products that solve small problems, but the rate of adoption will be slow, and the investment in customer education and promotion to generate a behavior change may be something you did not budget for.
Talking to your customer with the goal of knowing them deeply is not as easy as you think, it is actually not at all about talking, it is about listening. It is about learning what they care about, what problems or pains they have, and how they are solving those today. Your goal is to find a big enough problem that your customer has, which your product or service can solve.
Once you identify your customer’s big problem it is time to confirm that the “value” that your product or service offers them is in fact something THEY value. If this doesn’t match, re-evaluate your value proposition, your customer and potentially your product. You may have to pivot, but don’t arrive at any conclusions before you gather sufficient information from many customers, how many? Forty, fifty, a hundred. The more data you have, the better you will be at making decisions to ensure that your product is precisely addressing your customers needs. Then you have a customer, and a high probability of a successful business.
Beware of thinking that YOU are the ideal customer and interviewing yourself, that might be just a bit biased. Don’t interview your mother or best friend either. The goal is to get an unbiased understanding of your customer’s needs. If your target customer is single mothers 30-50 years of age, try to interview as many of them as possible before you think you know their pain and how your product addresses it. Find these potential customers through referrals, at an event, at a trade show, and ask for 15-20 minutes of time to learn about their needs. Most people will give you the time if they understand that you are not selling anything, you are learning about them and their needs. Have your questions prepared, these will sound something like: what do you typically do in this situation? Have you encountered any issues doing things this way? If you could fix anything to make it better what would it be? Do not waste your or your customer’s time talking about you or your product. It is all about the customer. They will make or break your business, so listen closely.
The University of California Riverside offers entrepreneurial training through the Office of Technology Partnerships and the EPIC SBDC business development center to help aspiring and established entrepreneurs and business owners better understand their customer and succeed in business. The University of California’s COMUNITT platform offers entrepreneurs and technology transfer offices in the United States and Latin America resources to advance ideas and commercialize technologies.
Alexandra Orozco, MBA
Associate Director, International Partnerships – EPIC
Office of Technology Partnerships, University of California, Riverside