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. 

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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