Why Knowing Your Customer Leads to Success

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Knowing your customer is essential to any business. Customers are an integral part of your business since they drive revenues and allow your business to exist. The products you create or the services you provide mean nothing without the patronage of customers. Customers today no longer determine their loyalty on price or product. 

Instead, they stay loyal to companies based on the experience they receive. They expect an excellent brand experience regardless of the channel used. This is why knowing your customer can significantly improve brand loyalty, customer satisfaction, sales, traffic, and overall revenue. 

Vital Statistics

It wasn’t too long ago when businesses agreed that the key to achieving a good customer base was focusing on delivering better products or services. However, customer experience has become an even more critical success factor. Building the right customer relationships will result in more repeat business and acquiring recommendations from your customer’s friends and colleagues. This is why customer experience should be a top priority for businesses if you’re aiming for success. 

  • Seventy-three percent of customers rate customer experience as a crucial factor in their purchasing decision. For your customer, experience is everything. Good customer experience leaves them feeling heard, seen, and appreciated. Customers want unique experiences with your brand but also require efficient customer service. Customer service basics such as speed and convenience in service and feedback are necessary to meet your customers’ expectations. 
  • Up to 96 percent of customers reveal that customer service is vital in their choice of loyalty to a brand. Excellent customer service attracts new customers and engages existing customers to stay loyal. When a customer is devoted to a company, they’re not easily swayed by price or availability. They tend to stay with the quality of service and product that they know and love. Knowing your customer allows you to provide the experience they want and gain their trust in return. Customers that trust in the companies they do business with are more likely to stay loyal, assuring more return purchases in the future. 
  • Companies can increase revenue by 80 percent by focusing on improving customer experience. Improving customer experience through data-driven decisions can provide a higher chance that customers will revisit your business in the future. By giving customers the experience they expect, companies can be 60 percent more profitable than those less customer-centric. 
  • One in every three customers will abandon a brand they’re used to after just one bad experience. Today’s consumer patience for poor customer service is rapidly evaporating, with a third of most consumers willing to ditch companies after just one poor experience. Furthermore, 92 percent of customers would abandon a company entirely after two or more negative interactions. It’s also critical to note that customers switching companies due to poor service can cost US-based companies up to $1.6 Trillion in lost revenue.
  • A 10 percent increase in customer retention leads to a 30 percent increase in a company’s overall value. Many companies often overlook the importance of how their customers engage with your product or service. A slight increase in customer retention can change dividends to the overall value of your company, which is why customer retention is an important metric to achieve success. 
  • Forty-nine percent of customers make impulse purchases after an excellent personal experience with a brand. Knowing your customer allows you to more customized experiences that meet their individual needs. This level of positive impression encourages them to make that purchase. 
  • Eighty-six percent of consumers are willing to spend more for a great customer experience. Customers know the value of quality experiences. They are willing to pay a more premium price of up to 13 to 18 percent for luxury and indulgence services if they know they’re getting their money’s worth. This means that providing a good customer experience means that your customers will gladly spend more on what you’re offering. In addition, consumers are also willing to pay 17 percent more to purchase from companies with a reputation for excellent service. 
  • Seventy-three percent of companies with above-average customer experience perform better. Customers expect quality customer service and expertise when encountering your brand, and they expect more than ever before. Companies that raise the bar to meet those expectations are rewarded far more than those that don’t. This is why brands with superior customer experience receive 5.7 times more revenue than competitors that lag in customer experience. 
  • Sixty-four percent of companies with a customer-centric CEO believe that they are more profitable than their competitors. A company and its leaders can feel the benefits of an improved customer experience. Aside from increasing revenues, positive feedback and enhanced reputation and recall are significant indicators of customer happiness. To the company CEO, improved performance and customer satisfaction can be fulfilling markers that signify achieving targeted success.
  • Companies that improve customer experience also see employee engagement increase by 20 percent. Aside from a positive increase in revenue, companies that give focus to customer experience have 1.5 times more engaged employees than less customer-centric companies. When employees are active and happy at work, they can take care of customers a lot better.

Importance of Knowing Your Customer

knowing your customer

Knowing your customer fuels your business and its success on many levels. Your customer’s success is your company’s success, which is why the most successful businesses have a customer-first mentality. Understanding your target audience allows you to develop the necessary means of serving them better. Knowing what your customers care about, the targets they need to meet, and the problems they want to solve should be part of the foundational knowledge of your company. 

Even before setting up shop, you need to grasp the target audience you intend to serve. Going on a journey of discovering the identity of customers you and your team will face allows you to apply the proper customer engagement strategies. In addition, identifying these metrics will provide you the means to achieve business validation, achieve momentum and sustain traction. 

To acquire these elements, understanding your customer’s behavior is also very crucial. As a business owner, you’ll have to foresee the type of person most likely to want or need the product or service you provide. So ask yourself these questions to provide much-needed insight:

  • What is your customer’s reason for purchasing your product or service?
  • How often would they need to buy that product or utilize the service? Knowing when they will make these purchases allows you to be proactive and initiate engagement so they won’t need to look elsewhere. Understanding who these purchases are intended for can form your messaging and promotion to attract specific customers. 
  • Who are they buying for? 
  • Where are they most likely to make that purchase? Make products and services more accessible to your customers by raising your online ordering component. Having an eCommerce channel allows brick-and-mortar businesses to reach customers who prefer to order online. Not only does this provide a means for customers to acquire your product conveniently, but it can also raise revenue significantly. 

Companies that give attention to what their customers want and expect to receive can provide you with the reference you need to build customized customer experiences. These unique experiences can create long-term relationships you can foster, as well as assuring repeat business.

knowing your customer

Tips to Knowing Your Customer Better

Apart from churning out top-quality products and services that consumers will like, your business will need to reach out and gain insight to know your customer. It takes thoughtful analysis to understand the customers’ psyche, so engage in customer identification procedures that can help you identify preferences and purchase patterns. 

This gives you the insight to anticipate their needs and exceed expectations to provide outstanding customer experiences. Here are essential ideas you can implement to know your customers a lot better:

1. Use Data Analytics

knowing your customer

There’s plenty of data you can utilize to initiate effective marketing strategies in today’s digital age. For example, a successful campaign this year might not be effective next year as customer interaction evolves. Consumer metrics and insights are gold pieces you need to sort out and identify to understand your customers a lot better. Data sources such as Google Analytics can be used to extract value from demographic insights while providing perspective into your customers’ habits, preferences, and behaviors. 

2. Ask Your Customers

knowing your customer

One of the simplest and most direct ways of knowing your customer is by starting a conversation with them. Meeting your customers is a natural and a more organic way of gaining insight into who they are. You can even ask them directly to determine what they need and how your company can serve them better. 

Focus on both the “why” and the “how” so you can determine what needs to be done to provide a superior customer experience. Asking the correct questions will help you improve your brand experience while making customers more comfortable as you get to know them more.

3. Respond Immediately to Positive and Negative Reviews

knowing your customer

Reviews hold a critical part of every business, as each one can make or break your brand. Customer reviews, both positive and negative, should be responded to personally in a productive and timely fashion. 90 percent of customers agree that online reviews play a direct role in their buying decisions. 

More than simple risk management, you should be dedicated to providing custom responses to reviews viewable in the public domain. This personal touch can humanize your brand and express your commitment to customer experience, regardless of the reviewer’s tone. It also helps to identify your customer’s risk profile to grasp the pain points you need to address immediately. 

4. Identify Customer Profiles

knowing your customer

Grouping customers together into one generalized group doesn’t generate meaningful results. It’s much better to understand the different parameters that provide a way to segregate customers. You can use categories such as the type of products or services they purchase, the frequency in which they buy, the geographic location of your customers, and so on. 

Once your categories are identified, it’s much easier to frame your efforts on your clustered groups with a more targeted messaging. These customer profiles contain valuable data you can refer to whenever you need to realign your strategies.

5. Map Out Your Customer Journey

knowing your customer

An easy way to plot out your customer’s experience is by mapping your customer journey. A customer journey map visually represents a customer’s interaction with your brand through each phase. These five phases include Discover, Consideration, Conversion, Fulfillment, and Renewal. These are the stages in the sales funnel that your customers go through. This tool is a long-term asset for your company to further efficiency and serve the primary goal of achieving customer satisfaction.

6. Optimize Customer Service Interactions

knowing your customer

One better and more subtle way to gain insight from your customers is by leveraging customer service interactions. Using a straightforward questionnaire that you can provide to your customer service representatives, you can ask queries when customers contact your representatives. These questions can be about what your customers may like or dislike about your product or service. Some questions you may use are:

  • How do you like using the product or service?
  • Are you satisfied using the product or service?
  • What changes or improvements would you like to see in the product or service? 

By incorporating these questions into the occasional customer and representative interaction, you can acquire valuable insight and gauge how your product or service is being received and what you need to improve on. 

7. Focus on Customers' Tastes and Preferences

knowing your customer

As you gather information on your customers, you know their interests and how to catch their attention. Then, when you tailor a customized approach, customers get the impression that you’re giving them the attention they want, making your brand stand out. Many ventures use consumer data to frame materials and methods that resonate with customers’ interests. This doesn’t even have to be product or service related and is mainly a way to spark attention to your brand.

Conclusion

Knowing your customer can be a tedious and intensive process. However, if done correctly, it can provide results that can significantly change how you do business. Understanding your customers and creating a customer-centric company culture can have long-lasting benefits that improve your overall value and increase your revenue. In today’s complex business world, where brands can get easily drowned out by others, it’s vital to develop meaningful relationships with your customers to achieve success. 

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