Know your customer. We’ve heard that so much our head spins. But the truth is many entrepreneurs think they know their customers — and they really don’t.
That can lead to weak product development and weak differentiation – two of the most common challenges seen by the consultants at Florida SBDC at FIU, the small business development center within FIU’s College of Business.
“Just because you add a new feature or benefit doesn’t mean you have a product that will be successful in the market,” said Shelly Bernal, who specializes in international trade and marketing strategy. “Entrepreneurs think their assumptions are facts. You can test it.”
For example, an assumption may be that customers want a certain new feature. The fact may be customers want a completely different idea. Could it be your target customer is different than you thought? Or the reasons they want your product are different than you thought?
Ask Your Customers the Right Questions
Bernal offers the following advice:
- Write out assumptions you have about your customers, your market and your product or service.
- Methodically test each assumption with your customers and/or potential customers.
- Ask them open-ended questions that invite them to share. “No yes-no answers – you can’t find out what you don’t know if you don’t ask the questions correctly.”
After that you have those facts, you become clearer about your product and market positioning, your differentiation and your unique value proposition. “That’s because … once you change the conversation and get different, more open feedback, you can make a completely different decision.”
Identify Trends
Sometimes there are themes or topics that get repeated in the conversations. “That’s when we announce we have a customer discovery. And we can build out a differentiator strategy around it, and that becomes a breakthrough for the company,” she said. Often that revolves around better marketing something the company is already doing, but before the conversations the company didn’t realize that the differentiator — or new feature or product — was so important to the consumer.
“It seems almost a no brainer — Why didn’t I think about this?,” said Bernal. “We get so busy and we don’t take the time to analyze the conversations we should be having with our customers.”
There are whole books written on this stuff, and one that Bernal recommends is Talking to Humans: Success starts with understanding your customers, by Giff Constable.
Here are some do’s and don’ts from Talking to Humans about shaping those all-important customer discovery questions:
Talking to Humans |
#Talkingtohumans / Source: Talkingtohumans.com | |
| DOs | DON’Ts | |
| 1 | Go in prepared. Know your goals and questions ahead of time. | Don’t have an endless list of questions. |
| 2 | Be smart about who you target. Work from your hypotheses on market and early adopters. | Don’t take a shotgun approach, talking to anyone with a pulse. |
| 3 | Talk to one person at a time. If you bring a note taker, they should remain quiet. | Don’t do focus groups. |
| 4 | Prepare yourself to hear things you don’t want to hear. | Don’t let your excitement and optimism bias what you hear. |
| 5 | Get stories on past behavior | Don’t ask people to speculate (i.e. “would you pay for X?”) |
| 6 | Ask for advice | Don’t pitch unless you actually try to close for real money. |
| 7 | Listen. 95% of the conversation should be them talking. | Don’t talk so much, and don’t be afraid of silences. Let them think. |
| 8 | Follow your nose and drill down when something of interest comes up. | Don’t feel like you have to rigidly stick to a script. |
| 9 | At the end of the interview, ask for introductions to more people to speak with. | Don’t leave empty handed if you can help it. |
| 10 | Look for patterns and use judgment. | Don’t take any one conversation literally. |
Please send GrowBiz topic suggestions and feedback to sbdc@fiu.edu.