Top 7 Ways to Understand Your Customer

To run a successful business, you must have in-depth knowledge of who your core customers are and their evolving wants and needs. The ideal way to understand your customers is to conduct some market research.

You need to uncover:

1. What Benefits are your Customers Buying? People don't purchase features, they buy benefits. Consumers don't want to buy kettles, they buy things that boil water quickly and efficiently. What benefits do your customers buy from you? You need to discover, from the customers' point of view, exactly what it is they are buying. By promoting the perceived emotional benefits of your product/service, you will be able to sell more efficiently and produce innovative products desired by your customers.
2. When do your customers buy? Buying patterns are often closely related to a customer's lifecycle stage. Important 'rites of passage' are moving out of the parental home, marriage and change in employment. Do you know if your business attracts people during these life-changing events? By knowing at what stage in life your customers are likely to buy from you, you will be able to create appropriate advertising to target new customers.
3. What types of people buy your products/service? Factors that affect purchasing are demographics (eg: age, gender, income level) and psychographics (customer clusters segmented by attitudes, beliefs and personalities such as 'Elvis is Alive' believers). By determining both your demographics and psychographics, you will be able to sell more effectively and advertise in media that precisely matches your audience characteristics.
4. How happy are your customers? Have you ever purchased an expensive item only to receive no service when you went back to the store to report faults or ask questions? Frustrating, wasn't it? Given how important 'word-of-mouth' advertising is in increasing your sales, it is crucial that your customers always think fondly of you. By measuring customer satisfaction at all stages of the purchase and after-sales process, you will be able to make adjustments to your product/service to ensure loyal and happy customers (and increased referrals).
5. What areas of your product or service are your customers unhappy with? By asking your customers what improvements they would make to your offering, you are able to refine your product/service and exceed your customer expectations. From this knowledge, you will be more capable of foreseeing market trends and identifying market opportunities that will enable you to create products and services to fill market gaps.
6. Are your competitors talking to your customers? You might think you know your customers, but how well do your competitors know them? Your most dangerous rivals are those that understand your customers better than you do. So don't give your competitors the upper hand, research their customers.
7. Do you keep a log of customer correspondence both negative and positive? Letters to your business are a good way of tracking customer satisfaction. Always ensure you rectify situations that cause complaints and maintain or exceed the positive feedback.