Owners many times do not see what customers see. One doesn’t have to be psychic to learn what customers need, think, and experience. There are straightforward actions small business owners can and must take to better understand their customers and address their needs.
If you’re a small business owner, start by simply reversing roles with your customer.
- What do I like about doing business with this company?
- What do I dislike about doing business with this company?
- If I were the owner, how would I improve things?
- Why would I consider moving to the competition?
These are simple questions to ask, but the answers (if answered truthfully) can have a profound impact on the success and sustainability of a business. These same questions should be asked to current customers.
Understanding Your Customer
Understanding what customers desire, like, and dislike about a business is vital to the success of any business. Customers want benefits and solutions to problems when purchasing products or services from a business. They also expect to have a pleasurable buying experience. When all of these are satisfied, customers return to repeat their buying experience. When this does not happen, however, the reverse takes place and customers flee to the competition.
A company begins operations with certain products or services; however, over time consumer demands can change due to various factors such as changing economic conditions, increased competition, or newer products appearing in the market. To create a flourishing business, a small business needs to meet these new and changing demands. Existing products or services may be either “tweaked” or new products or services might need to be added. Responding to customer needs is an excellent stepping-stone goal along the path to business expansion.
Seeking Customer Feedback
Another way to add value is through soliciting customer feedback and implementing changes based on that feedback. Many times, customer feedback will lead to new and/or improved products or services. In addition to satisfying existing customers, customer input is an excellent method to gauge the marketplace and attract new customers.
Obtain relevant feedback by:
- Sending surveys to existing and potential customers.
- Having in-business questionnaires and/or comment cards.
- Following up after a sale with a phone call or email.
- Asking a “lost” customer for feedback.
- Or best of all, having owners and managers available, visible, and personally talking to customers – face-to-face personal interaction.
Small businesses, without undertaking expensive and elaborate market research, can learn through customer feedback not only about their businesses, but also how they differ from the competition – products, pricing, service, quality, reputation, etc.
Solidifying Customer Retention
Obtaining new customers is the lifeline for any small business. Loyal customers must be retained while new customers must be constantly added. This is how a business grows and prospers. When there is a revolving door of new customers in and old customers out, the customer base cannot grow; it remains stagnant. Retaining old customers is far less costly and easier than constantly trying to acquire new customers.
Lost customers, however, can provide crucial feedback to a business. A customer survey or phone call may reveal many reasons for the customer dissatisfaction. Did customers leave due to bad service, inferior products, or no connection to the business? Addressing and satisfying a lost customer’s grievance can possibly lead them back to the business. At the same time, it can provide valuable feedback for the company so the same dissatisfaction is not the cause of other customers leaving for the competition. And, it’s worth remembering that a satisfied customer will tell few, but a dissatisfied customer will tell many!
Knowing Your Competition
Remaining competitive is learning what the competition is doing and then doing it better or differently. This is another area where customer feedback can play an important role in understanding why rivals in the marketplace are catching consumers’ interests and securing new business. In a competitive environment, consumer feedback is an excellent method to determine how to change, expand, and beat the competition. Through low-cost customer feedback initiatives, a small business owner can effectively align marketing strategies with customer needs.
Building a Bridge to the Future
The future of any business comes from increased business – new customers and/or higher revenues per customer. Although a business needs many things to be successful – such as efficient processes, standardized procedures, loyal employees, internal controls, and effective marketing – it cannot succeed without one critical element: customers! Listen to them – you need them much more than they need you!
Richard L. Weinberger, PhD, CPA, has over 30 years’ experience as a financial and management consultant for small businesses. An esteemed thought leader and speaker, he is CEO of the Association of Accredited Small Business Consultants. His new book, Propel Your Small Business to Success: Accelerated Actions to Maximize Profit, gives small business owners a step-by-step method for reviewing and analyzing every aspect of their company in order to increase profitability. Learn more at www.aampapproach.com.