Wednesday, 5 October 2016

Know Thy Customer


Know thy

Before you design your product, before you decide the price, before you understand market competition, before you source raw materials, before you hire people, before you formulate your business model, before you look inside your own offering, it is highly essential that you look outside and understand who is your customer?

The customer is that person who will buy your product (or service) just because your product is adding value in his life and is available at a price that he is ready to pay. The customer is a highly rational individual and to assume that he doesn’t know what he wants would be the biggest mistake that you can make. Therefore it is essential for you and your company to understand what adds value to your customer’s life and the price that he will be ready to pay for such a product or service.

These answers cannot be grasped sitting between the four walls of your workplace. You need to get out there, get your market research game on, and start talking to people. The biggest mistake that companies end up doing, in the name of market research, is asking a customer to react on offerings already designed or implemented by them. Let’s take an example – Let’s say you’re in the car manufacturing industry and you are considering adding some new features to your existing product and re-launching it.
If you ask your research group questions such as – Would you prefer new tail lamps on the Honda Prius? Or a more generic one - Would you like to see a new look of the Ford Mustang? Guess what the answer would always be – YES!

The customer would always be happy and excited to see more features added but will he pay for it? NO. The mistake here on the part of the marketers is that they already knew the answer that they were seeking from the questions that they were asking the customer. They just wanted to vet it through so called –“research”

The art of market research is to ask certain questions that allow your customer to talk and you to listen. Listening helps understand the customer and grasping insights. Therefore if you’re in the car manufacturing industry and are considering cosmetic changes on the existing offering, the question that you should be asking is – What do you think of the Honda Prius? And let him answer the question the way he wants. Your task is to assess from his answer, whether you should even consider such a change?

One more challenge you’ll face from such an approach is that - The customer doesn’t know exactly what they want. So he will never be specific about the exact features that he wants improvements on. It is your task to understand and define on the basis of his answers what offering can you provide them by looking inside your company – raw materials, costs, third-party services, employees, etc.

Market research can be done in various ways. Remember to do a mix of these six techniques:



The Data Detective
Build on existing work with (desk) research, secondary research reports and customer data you might already have provides a great foundation for getting started. Look also at data outside your industry and study analysis, opposites or adjacencies.
Difficulty level: 1







The Journalist
Talk to (potential) customer as an easy way to gain customer insights. It’s a well-established practice. However, customers might tell you one thing in an interview but differently in the real world.
Difficulty level: 2







The Anthropologist
Observe (potential) customers in the real world to get good insights into how they really behave. Study which jobs they focus on and how they get them done, note which pains upset them and which gains they aim to achieve.
Difficulty level: 3







The Impersonater
“Be your customer” and actively use products and services. Spend a day or more in your customer’s shoes. Draw from your experience as a (unsatisfied) customer. Difficulty level: 2




 


The Cocreator
Integrate customers into the process of value creation to learn with them. Work with customers to explore and develop new ideas.
Difficulty level: 5


 




The Scientist
Get customer to participate (knowing or unknowingly) in an experiment. Learn from the outcome.
Difficulty level: 4






To conclude I would say that customer segmentation should ideally precede value proposition. As long as a product or service offering is solving a need of a customer and the customer is ready to pay the price at which it is being offered, the marketing task is halfway performed!

Hope you enjoyed the read! Let me know what do you think?

Sid Bhargava

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1 comment:

  1. So great work for informing us of the possibilities and following a certain path.

    I really appreciate your hard work an giving us some information and inspiring others to follow.

    Thanks so much.


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