Your business’s “sweet spot” helps you determine where your differentiating capabilities lie. It also helps you find which type of customers are the best fit for you.
The customer evaluation chart described in the last post is a useful tool to understand your “sweet spot”—but it can be limiting in that your perspective is the only one that gets taken into account. In this post, we’ll explain how to find out what your customers think that sets you apart—and what they value in your competitors.
Conducting customer research
So, how do find out what your customers really think of you? Easy: just ask them.
There are many ways to do customer research. For instance, in a B2C environment, surveys and focus groups are potential options. But in a B2B environment these approaches often yield inconclusive results. It is often hard to have enough people respond to surveys to draw meaningful conclusions. In addition, focus groups can be a real challenge in a B2B environment because people often don’t talk when they are in a room filled with their competitors. For these reasons, one of the most effective ways to get the answers you need in a B2B environment is to conduct customer interviews.
As you conduct customer interviews, your goal is to learn as much as possible about what customers think of your company and the competition. It helps to have a question list prepared in advance. Here are a few questions to get you started:
· Why do you choose to work with [company] over other suppliers?
· On a scale of 1 to 10, where 10 is extremely likely and 1 is not at all likely, how likely is it that you would recommend [company] to a friend?
· What 2 or 3 aspects of [company] stand out most to you?
· What is unique about [company]?
· How can [company] improve?
When conducting customer interviews, you should target both existing and prospective customers. Because prospective customers may work with your competitors, these interviews will help you understand the sweet spots that competitors offer. Keep in mind, however, that prospective customers may be less willing to talk with you than current customers. Here are a few questions to try.
· What are the top 3 reasons you work with your current supplier of [product/service]?
· What are the top 3 “must haves” for a supplier of [product/service] to work with you?
· What are the “nice to haves” for a supplier of [product/service] to work with you?
· What is the name of your current supplier of [product/service]?
· What do you think of them?
· What are their strengths and weaknesses?
Customer interviews can be performed by your company or by hiring an outside third party. If you can, consider having a third party conduct the interviews. Customers typically speak more freely with someone with whom they don’t have a direct sales relationship. In addition, experienced third parties can tease out useful information others may find challenging to extract. Finally, third parties are typically better at listening and not trying to overcome sales objections.
Whether you conduct the customer interviews on your own or bring in a third party, you’ll need to speak with at least 5 people before you can start to see patterns in responses—ideally, try to talk to 12 customers or more.
If you conduct the interviews, be sure to take good notes. This is easy if you are conducting interviews over the phone. If you are conducting the interviews in person, particularly over a meal, taking notes can be more of a challenge. Be sure to set aside time after the meeting to record and clarify responses as soon as you wrap up.
Most importantly, listen. If a customer gives critical feedback, don’t make excuses or try to persuade them to see things differently. The more candid customers feel they can be, the more valuable insights you’ll get.
Reporting what you find
When you’re done with interviews, then it’s time to analyze what you’ve found. Look back through your notes and try to identify common themes. Are several customers saying the same thing? If so, that perception is worth further exploration and can help you refine your strategy. Are customers not saying something that you had anticipated? This is equally valuable.
When I conduct these interviews for other businesses, before the interviews many believe price is the most important attribute. What I usually find is price is third or fourth on the list. This clarified insight on the true importance of price can greatly enhance a business’s value proposition.
After you are done with your customer interviews, create a report of your findings. You can do this by first summarizing answers on a customer-by-customer basis. Then, take the same information and sort all responses on a question-by-question basis. This report will be helpful down the road, once the details of the initial interviews are forgotten. In addition, the report allows you to circulate the customer insight to others who may be interested, such as sales people, product managers, and executives.
Why go to the trouble? Customer research often leads to “aha” moments. It helps you clarify your understanding of your sweet spot. And it allows you to tailor products, communications, pricing, and channel development to better meet your customers’ needs.
It can also help you validate business decisions. When you act, it won’t be on a hunch or anyone’s whims—it will be grounded in research into what your customers truly want.