New clients always like to talk about their customer demographics, and I'm eager to hear what kind of insights they've acquired about the people who drive their company revenue.
I usually ask a few questions about their customer insight research, new customer buying behavior, customer attrition trends, and competitive advantage from the customer's perspective.
Many companies don't readily have answers to these questions because they've never really spoken to their customers before.
The market research and customer insight programs they've invested in typically include surveys and maybe a couple of focus groups. But, they’re missing out on some tasty customer information that could reshape their overall marketing strategy.
If you rely on a single source of information for your customer data, the odds are good that the data isn't as accurate as it could be. It’s hard to remove bias from research projects once team members have the information and create marketing programs based on the information. Skewed data is especially common if you perform the research in-house due to internal political pressure and assumptions that unintentionally get baked into the research methodology.
Surveys can be helpful tools, and they have a place in your overall research strategy, but do you want to know the biggest issue with customer surveys?
How many lie on customer surveys, and how often? Hard to say.
There’s a psychological phenomenon called “Social Desirability Bias”
which states that people will often lie about sensitive topics (such as smoking habits or even how tall they are) to make themselves look better, and they could either be lying to themselves or to the company who's gathering the information. Good times, eh?
Will people lie in one-on-one interviews? Yep, but if you have an honest, friendly conversation with your customers, the odds of getting a goldmine of significant information increases.
The second biggest issue with surveys: everyone uses them, and your customers ignore them and delete them from their inboxes.
Constant Contact sets expectations only to expect a 10-20% response rate on a survey. That’s pretty abysmal, and you definitely shouldn't base your marketing strategy on this information alone.
Talking to customers can be intimidating mainly because people aren't afraid to tell you the truth and sometimes that can hurt your ego. Hearing bad news is sometimes hard to take.
You want the insight your customers will only give to a human.
Qualitative data and one-on-one conversations can deepen the view you have of your customers and take them out of the spreadsheet and into your real life.
It’s easy to ignore the comments you get from a single field on a survey or a line on a spreadsheet. But when you speak with someone and hear the emotion in their voice, hear their story, and understand their buying journey, you form a connection with your customers.
Side bonus? You also turn your company from a faceless logo to an organization filled with actual people in the eyes of your customers.
Want to know why your company’s hot pink blender is flying off the shelves? A conversation with your customers who bought them could tell you. They might tip you off to a blogger who started a hot pink blender trend that’s taking over Pinterest. This unexpected side tangent example is the goldmine of information the constraints of a survey just won’t give you.
Talking to customers can be intimidating because once people feel comfortable and really open up, they aren't afraid to tell you the truth. Sometimes that can hurt your ego (especially when your customers are talking about your pet project or the new product you poured your blood, sweat, and tears into). Hearing bad news is never easy.
Which customers will give you the best information/spill the tea?
Good question. I generally advise that you speak with:
- New customers - are they as excited about their first purchase as you hoped they are? If you don’t know who your customers are and what their motivations were for buying, there’s no way you can accurately target and convert more excited customers. You can also use this information to help validate your customer segmentation strategy.
- Existing customers whose buying cycles have slowed or changed - how are you *not* meeting their needs, or are they excited about one of your competitors over you and most importantly, why?
- Former customers - why did they leave? Is there anything that would have changed their minds about leaving. Use these customers to double-check your customer attrition analysis (because you’re already tracking how many customers are churning, right? RIGHT?). With the right person interviewing, you may be able to win back a canceled customer if the reason your customer left wasn't too serious.
Executing on a customer conversation plan takes dedicated time, resources, and the willingness to take action when you see a trend emerge. The companies who take building relationships with their customers seriously, the benefits can far outweigh the time and effort.
When is the last time you had a conversation with your customers?
If you need to understand who your most profitable customers are and how you can get more of them, give me a shout or schedule a free, 20-minute consultation to walk through the information you want from your customers.