#Entrepreneur Series-Understanding the Customer: The Key to Business Growth

Many years ago, when I worked as a consumer insights manager with one of the big FMCG companies in Lagos, one of my primary responsibilities was to educate new sales managers on the importance of understanding customers and how critical it is to extract meaningful insights from each sales visit and interaction.

I told them that these insights were not just numbers on paper, rather they represented real people's nuanced behaviors, preferences, and decision-making patterns—the consumers they were trying to persuade to choose the product/service they presented. The preceding scenario I shared during each training session was about more than just selling products; it was about establishing relationships that make your business an integral part of the customer's life.

To drive this home, I often used an analogy whereby I would ask each sales manager to reflect on their day-to-day decisions, thinking back to the moment they woke up in the morning. I encouraged them to think through their routine: what they did upon waking, whether they prayed, made coffee, checked their phones, or did something else entirely. These seemingly trivial actions, taken in aggregate, reveal personal choices throughout the day. And the same is true for consumers and business buyers. People constantly make conscious and unconscious decisions about what products to buy and which services to use right from the time they wake up to consciousness.

Why Understanding Customer Decisions Matters

In today’s explosive world, #technology, and #innovation are #transforming industries at a rapid pace. However, one fundamental truth remains: people still drive business decisions. As humans, we are the sum of our choices, and this is why there is a need to understand not only the customers’ lives but also the motivations behind their decisions.

According to consumer behavior theory, understanding what drives these choices is essential in marketing and customer engagement (Soster & Ristanovic, 2023). When businesses grasp the factors influencing a person’s decision-making process, they can better position themselves as the solution to a problem or fulfilling a need.

Take, for example, the analogy of relationships. When a male meets a female and begins building a relationship, that connection evolves based on mutual understanding, shared values, and emotional resonance. Some relationships are fleeting, but others leave a lasting impression—even after they end. Businesses should aspire to have this kind of relationship with their customers. You want to create a powerful bond with your consumers so that they remember you even after their immediate need for your product or service has passed.

The Power of Knowing Your Customer

So, how can a business or service provider build these long-lasting connections? It starts with truly knowing your customer. Not in a superficial, demographic way, but in a profound, personal way. This is where customer persona development comes into play—a critical tool for understanding the different types of customers interacting with your business. A persona is not just a profile of your target audience; it represents a customer’s hopes, dreams, challenges, and needs (Tiller Digital, 2024)).

To really "know your customer" (KYC), immerse yourself in their world. As a business, one cannot afford to guess or rely on surface-level data. We must "step into the customer's shoes" and understand their tensions, pain points, and daily challenges. Only then can we begin to provide the solutions that truly matter to them.

Consider the concept of psychographic segmentation, which divides people based on their psychological traits, values, interests, and lifestyles. This form of segmentation allows businesses to connect with their customers on an emotional level. It reveals the motivations behind why a person chooses one product over another and how a brand can fit seamlessly into their life. As Maslow's hierarchy of needs teaches us, every decision is driven by a desire to fulfill a particular need, whether basic security or self-actualization (McLeod, 2007). Businesses need to understand where their product fits into that customer hierarchy.

Data Driven Insights Empowers Decisions

Of course, to understand customers deeply, businesses need information—actionable, reliable, and insightful data. When a business has access to rich consumer data, it can effectively make informed decisions about meeting customer needs. However, it is not just about gathering data but about knowing what to do with it. According to a publication, companies that leverage customer data for personalized marketing experience a 5-8% increase in revenue (McKinsey & Company, 2021). The difference between successful and unsuccessful businesses is the ability to sift through the noise and focus on the key insights that matter.

Statistics from studies show that 71% of customers expect personalized experiences today, and businesses must rise to the occasion. If we understand what makes our customers tick, we can create products, services, and marketing campaigns that resonate with them on a deeper level (McKinsey, 2021). This is where the role of a #Value Evangelist comes in—someone who not only understands customer needs but champions the value their business brings into the customers' lives. It is about being more than a vendor, provider, or satisfy-er; it is about becoming an integral part of the customer’s routine.

Becoming Customer-Concentric

A deep understanding of the customer is at the heart of all business success. Whether selling a product or offering a service, it is essential to ask yourself: do you truly know your customer? What makes them happy? What are their fears and aspirations? What language do they speak, and how do they want to be communicated with? Finding answers to these questions, does much to position your brand as a trusted partner in the customer's decision-making process.

The Value of Relationship Building in Business

As entities seek to improve their product or service offering in this ever-evolving, dynamic and explosive markets, it is critical to adopt a customer-concentric approach. Knowing your customer is not just an exercise in marketing; it is the foundation for long-term business success.

So, as you continue to refine, review, renew, or consolidate your strategies, remember that the key to staying relevant is understanding the core needs and motivations of the people you seek to serve. This is the essence of what it means to be a Value Evangelist.

Ultimately, businesses should aim to become so embedded in a customer's life that they become 'almost' indispensable.

Do you want your product or service to be part of your customer's daily choice, routine, decision, or the go-to solution that pops into their mind whenever they face a relevant problem?

Then, you should consider your next business move by asking how well you know your customers and what value you bring to their lives!

Are you struggling to stay relevant and valuable?

Let's connect!

#TheValueEvangelist #LinkedInChallengewithInneh #MarketResearch #MarketResearchforyourbusiness #SmallBusinesses #SalesInsights

References

McLeod S. (2007), "Maslow's Hierarchy of Needs (craigbarlow.co.uk)"

McKinsey (2021), "The value of getting personalization right—or wrong—is multiplying", Published by McKinsey Article, November 12, 2021, Extracted Oct 10, 2024.

Sostar M, & Ristonovic V., (2023), "Assessment of Influencing Factors on Consumer Behaviour Using the AHP Model", Sustainability 2023, 15, 10341, Published June 30, 2023 at https://doi.org/10.3390/su151310341. Extracted Oct 10,2024

Tiller Digital (2024), "How to create audience personas – a beginner’s guide" Published at https://tillerdigital.com/guides/how-to-create-audience-personas-a-beginners-guide/