Successful companies have one thing in common: customers. Without customers, after all, they wouldn't be in business.
Too often, though, both startups and established small-business owners make assumptions about what customers want without asking them.
"We lull ourselves into believing what our customers need, even if we really don’t know if we are actually fulfilling that need," says Erin Beierwaltes, a business coach at Designed Culture who mentors startups at Boomtown, a startup accelerator in Boulder, Colorado.
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Email, phone calls and even video conferencing tools such as Skype can help business owners connect with customers. But there's nothing quite like sitting down with someone in person and watching them use your product or service, Beierwaltes says. When you do, you hear what the person has to say, but you also get feedback from their tone, facial cues and body language, she says.
Because you can get so much feedback, meeting with customers face-to-face is a mental hurdle many owners need to overcome.
"Getting outside the building is intimidating for everyone, it’s just human nature," she says. "But unless you do, you’ll never find out if your ideas are good or not."
How Customer Feedback Helps
Startups participating in accelerator programs such as Boomtown spend an enormous amount of time thinking about who their core customers are and why.
"We get our companies to be hyper-focused on two aspects of their customer, the pains and the gains," says Toby Krout, Boomtown's co-founder and co-director. "We ask them, what pain are you solving for your customer, and what gain are you bringing to them?"
[block-text alignment="left"]Will Your Customers Buy What You’re Selling?
Case in point: When a startup originally called Ouiby joined Boomtown's fall 2014 class, the founders thought college students would be ideal customers for their business, which plans to use crowdfunding to raise money from non-accredited investors to help small businesses finance buying inventory. After pitching the project to a college class, chief executive Sean De Clercq and his partners discovered that their target demographic didn't have the money to invest, nor were they as interested in the product as the co-founders assumed.
The startup's founders also discovered the name they'd chosen was confusing. People “couldn’t pronounce it or spell it correctly,” De Clercq says.
As a result, De Clercq pivoted the company, changing its name to Kickfurther, which people he spoke to found less confusing. He also refocused on a different potential customer base, targeting college graduates and young professionals who are better prepared to invest.
Startup Bitsbox, which supplies materials to help kids learn to code, also participated in Boomtown's fall 2014 class. After the company's two co-founders ran tests with a range of young kids at a local school, they realized they needed to do a better job explaining the product's selling points to parents, who ultimately make buying decisions for their children.
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Letting Customers Drive Innovation
Lessons that startups such as Kickfurther and Bitsbox learn in incubators about connecting with customers can apply to small businesses that have been around for years, Beierwaltes says. “Successful companies make sure that their people are given time to talk to customers,” she says. “They realize it’s part of doing the job and not just overhead. The time they invest pays off with positive returns for the business.”
An established small business that relies on customer input for new products and features is DialMyCalls.com, an automated telephone notification service used by schools, churches and sports leagues. DialMyCalls.com uses an internal ticket system and whiteboards at its offices in Houston and Jupiter, Florida, to track how many times customers request a new feature or improvement, according to David Batchelor, the company's president and co-founder.
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"We add ideas as they come in and then put a check mark each time it's requested," Batchelor says. "This way all the ideas are constantly in our face." Once an idea has more than a few requests, the company's development team looks into it more critically to see what it would take to make it happen. "This has led to a number of huge improvements that have benefited our entire customer base,” he says.
Customer input also plays a critical role at a Nurse Next Door Home Care Services, a home health care franchise with more than 90 U.S. and Canadian locations. “Listening to your clients and finding a trend with what they say can inform your next business decision,” says Arif Abdulla, vice president of the company's U.S. operations.
By listening, Nurse Next Door determined that half of its customers, typically senior citizens, were unhappy living in their homes despite wanting to stay there as they aged. The company used the information to make several adjustments to keep customers happy at home while adding to their quality of life. Those changes included matching clients with caregivers who speak the same language and having caregivers take clients on excursions whenever possible.
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KangoGift, a Cambridge, Massachusetts human resource technology firm that sells employee recognition programs, goes even further, weaving connecting with customers into its business culture. Every six months, KangoGift surveys customers over the phone about their challenges and priorities, and uses an online survey tool as well as Excel to track and standardize results. “We are proud to work closely with clients, so asking them to share what's on their minds related to the areas in which we help is not a big thing to ask," says CEO and founder Todd Horton.
KangoGift simultaneously invites employees to identify the biggest challenges they think customers are facing. The company then compares the two data sets to create a “heat map” where the pain points intersect. The process identifies gaps and opportunities that KangoGift can pursue, empowers employees and keeps the company’s culture from feeling stale.
Companies that don't talk to customers put themselves at risk, says Heather Cole, a data and analytics coach at Lodestar Solutions and Heatherized, both in Tampa, Florida. When Cole works with a customer, she first listens and puts herself in their shoes. Then she helps them create small, inexpensive pilot programs that are easy to get up and running to test the value of potential new products or services before committing to heavier investment.
“If you just go for it without first testing your theory, you could be betting your company unnecessarily,” she says.