Before launching your small business, it’s important you understand your customers' buying behavior and why they prefer your product or service.
This will help you validate your business and determine whether or not your company is likely to be a success.
What Are Consumer Insights, and How Can They Help?
Consumer insights go beyond raw data and research. They can give you a complete view of your customers, which can be beneficial for many reasons:
- Predict your customers' movements to identify patterns in their buying habits
- Help you make better business decisions that align with your customers' interests and behaviors
- Target areas of opportunity, such as product improvements or different areas to generate revenue
- Improve your customer relationships as you understand their needs, challenges and interests
- Lower your costs as you develop the right marketing and content to target your customers
Now that you have an idea of how these insights can be beneficial for your business, how can you go about gathering them? We’re all aware of the traditional question-and-answer interviews and focus groups. While these can provide insights on your customers, we’ve gathered a list of five different approaches you can utilize to gather consumer insights before you launch your business.
1. Observe Customers in Their Natural Environment
Actions speak louder than words. A more authentic approach than the typical focus group setting is observing your customers in a natural setting. This will expose the products they use, as well as their feelings and reasons for choosing those products. This approach is also more reliable, as people are more likely to be honest about any frustrations, benefits and other emotions during real-life use as opposed to a lab environment. This approach also lends itself to more ideas for product improvement.
2. Attend an Event or Trade Show
This approach is more targeted for business-to-business customers. When attending an event or trade show, observe how competitors are positioning themselves and their interactions with potential customers. For example, at their booth exhibit, assess everything from messaging to staff attendance to engagement and signage. What about their booth attracted engagement? Was their branding strong enough to allow prospects and customers to easily identify them? All these points are very important in understanding the customer/company interaction you want to strive for.
3. Conduct Empathy Interviews
Traditional question-and-answer interviews can be unsuccessful, since they're largely driven by the interviewer’s agenda and don't give participants a chance to determine what they really want. Instead, empathy interviewing focuses on the emotion and subconscious aspect of an audience's action by revealing why they behave a certain way. Empathy interviews allow users to speak about what’s important to them, and questions often go deeper than traditional interview questions. They also allow you to observe body language and reactions to certain questions and subjects.
4. Observe How Customers Purchase a Similar Product
Observing how a customer purchases a similar product will help you better understand their frame of mind when they are about to make that purchase. For example, if you’re at a physical location, does the customer simply purchase the product, or do they ask questions about the product first? Did they look for additional information on the product, compare prices online or speak with a store representative? People may not always know why they are doing certain things, so it’s recommended to interview the customer post-purchase for more information.
If your business is online, there are many tools to show you things like where the customer is clicking, how long they stay on a page and what page they are most interested in. A few of these tools include KISSmetrics, Google’s Page Analytics and ClickTale.
5. Monitor the Competition
Lastly, but certainly not least: Interviewing customers of competitive products and services will provide an external perspective on your target customer. Through this exercise, you can understand your competitors' perceived strengths and weaknesses — something that is absolutely invaluable when trying to differentiate yourself in the marketplace.
Not only will understanding your target audience help your business validate your product or service, but it will continue to give you insights on how to reach them. Developing and promoting relevant content to prospects and customers will increase sales and build customer loyalty, ultimately lowering your business costs.
Once you've done your research and are ready to launch your business, don’t forget to properly form your LLC. Incfile can help you do so quickly and easily for $0 plus applicable state fees, and you'll get a free Registered Agent for the first year. Get ready to start your business today!