Entrepreneurs: Know Your Customers, and that They Don’t Know…
It’s paramount for entrepreneurs to know and understand their customers. The customer relationship can help grow business as well as product development. Customers are typically not very helpful or open to new products, ideas, etc. Main reason is that they have their own priorities and they can be lazy. They are comfortable doing things in a certain way, dealing with existing vendors, and do not need added hassle of working with newer innovative ideas.
Typically there are 2 ways to engage them more at idea stage of a start-up:
1. Have the pressure applied to them from the top (top down approach) – for B2B products and services, this can be done by engaging potentially more visionary or relationship driven senior management first and then having them bring rest of their organization along.
2. Share the vision with them and make it feel to them as their own dream; if it excites them or solves some of their pain points, they would be more willing to help. It does not matter what your product can do, what matters is what your product can do for the target clients. So when you communicate with them, dont tell them what you know, tell them what they need to know. Its tough to do this as you have think what your customers want before you say anything, but this can be very effective if done properly. This is a sales tip 1-o-1. If there is relevant value add, your target customers will get engaged. Take an example, if Ferrari tries to do mass selling in India because they have the fastest car in the world, it may not sell that well. Indian roads are not smooth and cannot support efficient faster driving. But if Ferrari tries to sell by offering exclusive luxury car proposition, it can be sold to ultra high net worth individuals in India.
Also another tip on marketing; its very important to show up in front of customers. Half the battle is to ensure you have time to meet your customer and keep him posted about the developments. Do not act unprofessionally by shying away from any delays, issues, or challenges with the customer.
Always communicate and understand that Bad news is better than no news. Having said that, there is a slightly counter-intuitive argument as well.
Do customers know what they want?
Many people advise that every product should be developed in conjunction with the customer. Sure, that helps in ensuring customer problems are solved, the product is adapted to the customer’s workflow and operations, and that there is genuine product demand etc. But does that really lead to innovation? Can customers really think out of the box and imagine what they may want in the future? In most cases, the answer to these questions would be a NO. For an entrepreneur, it’s important to understand the customer, know their current ways of doing things, how they use products / services currently, and also their pain points and potentially perceived end goals. Once you do know that, then you should create a vision with your idea, turned into product / service and create something that customer would love to have in the future.
Of course you need to get its timing, technology, delivery, price and various other factors right. – Had Steve Jobs asked customers using Sony walkman or another portable audio music player, do you want something more or different, I bet many would not have been able to imagine an iPod. – iPhone, 3D printers and various other disruptive products are developed from an idea, vision converted into the reality … and eventually it becomes standard product that everyone wants.
PS: This view of smart entrepreneurs is a double edged sword. They are smart so they can derive any conclusion from any fact / hypothesis. They do see opportunities in Crisis, or a NO. They definitely need this conviction and vision. But sometimes this may lead them to creating not most relevant products and businesses. It’s a fine balancing act between seeing what is there, versus what they want to see.