Do you Really Know Your Customers?
Updated: Jul 9, 2020
You need to know more than your customers' age and gender. These are merely the basics. The question 'Who are your customers' often left many business people stumbled. Try asking your colleagues this question. You may get a momentary pause, followed by something like 'Oh, they are generally male in their 50s' or 'They are mainly middle-income office workers', etc.
At the time of writing this, we are on the very last day of the 'Circuit Breaker' period, aka the partial lockdown in Singapore's response to the COVID-19 virus pandemic. As more businesses progressively re-open, it is timely that we visit this fundamental aspect of our business. Who really are our customers?
Why is knowing our customers important? For a start, they pay us. :) Second, we often plan our business based on what we think is good for the business. Now, if our customers are the ones paying us, shouldn't we plan our business around them? This is fundamental to the concept of 'customer-centricity', often a buzzword these days. Knowing our customers go beyond knowing their age, gender, address, etc.
The Customer Journey
One useful model that I like to share is the 'Customer Journey'. There are many models on this topic. Just do a google search. As per my previous articles, I like to share what I think is easy for smaller businesses like SME to understand and adopt.
This model is often central to my business planning. Knowing the customer journey allows me and my colleagues to review and plan our initiatives on the various touchpoints that our customers come into contact with our business. This is important as these touchpoints are the moments that shape our customers' experience with our business and our brand. What they get from these interactions will influence and shape their perception and ultimately affect their next action. What we want to do is to influence their behavior such that their journey stays with us throughout (and not to our competitors). In other words, we want to be able to move the customers along the journey that we can have influence on. Let me demonstrate this model with an example.
A typical customer will go through these 6 steps when they want to buy a product or even a service. Let's go through each step using the example of buying a pair of jogging shoes.
Step 1: Aware Stage
One day you decide you will like to take up jogging. You will need to purchase a jogging shoe for doing so. When you have a need to purchase something, a few brands will pop into your mind. This is the initial consideration set. In this example, the brand Asics and Adidas popped into your mind as you intend to purchase a pair of jogging shoes. You are aware of these brands due to several reasons. Perhaps you have seen your best friends wore them, or they might have mentioned them before over a meal. Perhaps you recalled an awesome advertisement that captured your attention on Youtube. You want to find out more.
Stage 2: Research Stage
We typically spend a bit of time doing research when we intend to purchase something, especially when it's not a cheap item. We read up reviews on Google or Facebook. We may go to the brand website to find out more. We ask our friends who are jogging enthusiasts.
Perhaps these friends overwhelmingly said that Nike shoes are not long-lasting. What happened next? Because they are your friends, you tend to believe them more. Nike unfortunately gets struck off your consideration set. You asked them what brands they would recommend, and they brought up Asics. Asics is now added to your consideration list. At this stage, Adidas and Asics are on that consideration set. Brands can be added and subtracted from your consideration set at this stage.
Stage 3: Explore Stage
What usually happened next is you may go to the brand website to explore more. As it's a pair of shoes, you may want to try it on instead of depending on internet reviews and people's recommendations. You may visit an Asics and Adidas store to try on the shoes and explore options. Hopefully, you can find a mall where both of them are in, or you may go to a multi-brand sports store to explore the brands. After you try on one brand, you go on to the next one. During each exploration, you experience what the brand can offer from its product, its store, and also its salesperson.
Stage 4: Purchase Stage
When you are in the Asics store, you had the most wonderful experience. The store has a good layout and ambiance. On that day, the salesman serving you was cool, knowledgeable, and provided you very good service. The shoe you tried on fitted well and you felt pretty good. The store was having a sale and the price was attractive. It's now a no brainer! Ticking all the boxes, you decided to go for it and made a purchase. The store accepted mobile payment and the whole process was smooth and quick. You left the store a happy customer.
Step 5: Post-Purchase Stage
Alternatively, you may buy the shoe over the internet as the Asics site was having a flash sale. You do like what most consumers do - showrooming. If you had purchased over the internet, the shoe will be delivered to you via the courier service. The period of waiting time as well as whether the right product will be delivered matters.
After you received your shoe, you can't wait to try them on. Over the next few weeks, you start your jogging routine with your new pair of Asics shoes!
This stage is called the 'Post-Purchase' and typically consists of the fulfillment (or delivery) and usage of the product.
Step 6: Retention Stage
You are a new Asics convert. What do you do next? Perhaps you take picture of yourself with your new pair of Asics and post on your Facebook, Instagram, or other social media accounts. You tell your network and followers about your new healthy regime, how you love your new Asics, and ended off with the hashtag #AsicsRocks.
Perhaps over drinks with your pals, you happened to hear a conversation asking for jogging shoes recommendations. Because of your awesome experience with Asics, you recommended your pal the brand.
A few months later, you decide to purchase a second pair of shoes. Perhaps you want a different color or you decide to try another sport like tennis. Guess what brand will be in your consideration set, and perhaps even your preferred choice? Asics!
The Importance of the Customer Journey
The above is a classic example of the journey taken by many consumers like you and me. At every stage, there are often several touchpoints that the customers may come into contact with your brand. From your social media accounts to your website, to other sites or people talking about you. Even your store, your salesman, your promotions, etc. All these matters. Every interaction counts and helps to shape the potential customer perception and his next action along the journey. It is our mission to make sure his next touchpoint is something you can control and influence so that he constantly stays on the path towards the final purchase.
It is important to remember that the customer journey never ends at purchase. When the customer uses your product, do a follow up with a thank you email and encourage him to sign up with your email newsletter. Send him newsletters containing news on his favourite activity and tips on how to maximize the use of your product. Ask the customer to provide good reviews on Google and social media platforms. If everything goes well, you have a loyal customer for life. Very importantly, he is now your brand ambassador.
Final Thoughts of the Customer Journey
How do we apply this model to our business? Knowing the customer journey allows you to focus on key touchpoints that can influence his journey. By combining this model with knowledge of the customer's lifestyle and habits, you can focus on focusing your resources on things that matter. For example, knowing what online magazines or sites your customers usually surf will allow you to spend your advertising dollars wisely. Another example, a large majority of your customers like golfing, you may consider sponsoring the next local golf tournament.
How do we know the customer journey then? There are several ways, but the fastest and cheapest way is this - Talk to your customers! Ask them how did they know about your products. Ask them what did they do when they researched and explored the various options. Ask them what were the experiences that they liked and disliked at each interaction with your brand?
Consolidate all these responses, including other findings from your digital data (e.g. Google Analytics) or non-digital information (e.g. Focus group). Over time, you will build a very good picture of your customer journey. There may be several depending on the number of target segments that you have. Armed with this powerful information, you can use this to decide what initiatives to pump resources into. Do not waste resources on initiatives that doesn't add any benefits to your customers' journey.
I hope this model and the example has been useful to you. Start discussing it at your next sales meeting!
If you are an SME, and if there is any area you may want some help, or an opinion, or just simply a chat, do drop me a message!