Understanding Customers (part 2)
This is the second in a series of three posts addressing how understanding customers is crucial to selling software. In the first post we covered why understanding customers is essential, now let’s look at what we need to understand.
In this post we’ll cover:
What You Must Understand About Your Customer
Right, you probably think you have a reasonable picture of your customers and you certainly have lots of data. But what information do you need to really understand their attitudes and behaviour?
What is a customer for your software?
Customers are people. Whether you’re selling software to consumers (B2C) or other businesses (B2B) there are two groups of people you need to understand: buyers and beneficiaries.
- The buying group will include decision makers, stakeholders, gate keepers, influencers, and budget holders.
- The beneficiaries will include people using your software (casual users, expert users, reluctant users, evangelists, support staff, administrators, and educators) and the customers of your users.
There is often overlap between the people in these groups but typically the roles are quite distinct.
For example, if your software is used by HR departments to run payroll then the buyers were probably HR management with support from IT, the users are payroll administrators and all employees will benefit from receiving accurate, easy to read payslips.
Each group will have its own needs, behaviours, and attitudes.
You probably have a mountain of demographic data, it’s the easiest data to collect and some of it will be useful.
For your software it may be important to know about people’s age, gender, location, income, job title, industry, company size… and analysing your customers along these traditional customer segmentation lines for can be useful, particularly if you are selling to consumers.
But in many cases these labels are too superficial to provide real insight. Knowing that middle-income women aged 35+ are your best customers is useful, but it would be much more actionable if you knew why.
Understanding and using customer psychology is more valuable than the raw demographics. The best sales people are excellent at reading and adapting to customers’ attitudes. Research consistently shows that most people make buying decisions based on emotional triggers not facts, and the most effective marketing evokes an emotional response.
But to understand and use the attitudes of all your customers and potential customers is impossible. Instead you can develop personas to categorize your different types of customer into different buckets of people with similar attitudes and behaviours.
The personas that are most useful for you, will depend on your market and circumstances but they might be something like:
- Early adopter: technology fan wants the latest cool gadgets
- Conservative: risk-adverse needs reassurance, anxious to comply with regulations
- Aspirational: need to look good to others, associate with industry leaders
- Rushed: solving problem quickly is more important than the cost
- Inert: so worried about taking the wrong decision they’ll probably end up doing nothing
- Analyst: tyre kicker, wants exhaustive checklists
Personas are stereotypes. Each persona should be developed into rich profiles that are more valuable than one-dimensional demographics. So you know where to find the customers you want, what offers to make, and how they will behave.
You should only develop these personas after you have done your research to understand your customers as individuals.
When you really understand your customers you will know how they are behaving now and to a certain extent you’ll be able to predict future behaviour.
You will know:
- Where they are, where they hang out, where they go looking for solutions
- How they look for information, how they like to communicate (in shops, online, phone, webcasts, email, white papers, blogs, forums…)
- What their habits are, what type of language they use (terminology, sophistication)
- Who they turn to for help and who they trust (colleagues, professional advisors, friends, strangers)
- When they look for information (constant trickle, only when they absolutely need it)
- Which media they use and which search methods (Google, newspapers, twitter, TV, YouTube, industry magazines, Facebook…)
The single most-important aspect to understand is probably your customer’s pain. You must know where it hurts, how much it hurts, what they need and what they think they need, because:
- When your customers first experience the problem they will probably focus on the initial symptoms they have encountered. They may not understand the future pain, let alone be equipped to identify the underlying causes.
- If this field is new to them they won’t be familiar with the different types of solutions they should be looking for. And they will definitely be unfamiliar with the terminology and jargon.
So you need to be familiar with the different ways the problems manifest themselves and the different ways your customer might describe the problem.
Ideally you will want to have already been communicating with your customers, before they have even noticed there is a problem. You want to be:
- Educating them about problems they should be thinking about
- Looking for early warning indicators e.g. if a company is constantly hiring new staff for their IT helpdesk – it could mean they are having problems with their helpdesk software
And when you understand what their pain is and how they express it, you must understand how important solving the problem is to them:
- Can they afford to wait?
- What would happen if they do nothing?
- Who cares most about finding a solution for the problem?
Having understood your customer’s pain, you should understand what they think the solution will be and what possible alternatives there maybe.
If your competitors are well-known industry leaders then you will have to work harder to establish in your prospects’ minds that alternatives actually exist.
You need to understand what an ideal solution would look like for them:
- What would be their nirvana?
- What is the universe of all conceivable solutions?
Think out of the box and remember your main competitors are usually:
- “Do nothing”
- “We can wait”
- “We’ll just pull something together ourselves”
For each persona find out:
- Which solutions are going to be considered viable?
- How they will decide which solution to choose?
- Realistically, what will you need to do to convince them to choose your solution?
You and your solution
Try and put aside how you describe your company and your software and what you wish your customers said.
- How do they really describe you and what you do?
- What do they say about your software?
- What first attracted them about your software?
- What keeps them as customers?
- What do they use your software for that you did not intend?
- Why do they choose a competitor instead of you?
- What is their main reason for leaving?
- How do impartial observers describe your software vs. the competition?
You know why you must understand your customers and what you must understand about them. The next post in this series will cover
How to Understand Your Customer