Understanding your customers (Part 1)
When Jack Dorsey wrote a blog post about reconsidering the term 'users,' he hit a real nerve in the startup community. He argued that a word commonly used and deeply ingrained in its culture is wrong: it's too passive, too abstract and carries negative connotations to drug usage. He then proceeded to ban the word entirely at his company, Square, in an open letter to all employees. For some, this may have been a shock, but to others like me, it came as a breath of fresh air.
Coming from a marketing background, I've always questioned the rationale behind treating human beings as lifeless units who use things. Are they nothing more than a group of emotionless drones who click on links? Apparently, some people think so. It only occurred to me recently that this problem runs very deep. Most tech folks have no clue who interacts with their product, nor do they understand the reason behind their behavior. Yet, their business would not exist without them.
Understanding your customers is one of the foundations of marketing, which means it applies as much to startups as it does to big companies. It carries numerous benefits, from helping you build a better product to tailoring your key message and creating stronger branding. To get it right, you must answer two questions:
1. Who are my existing customers?
2. Who should my customers be?
Knowing how to answer these questions is especially important to early-stage startups, which are still figuring out their product-market fit. That's because customers are the 'market' side of the equation: they determine whether the product and its feature set meet their needs. If the audience isn't a good fit, then obsessing over granular metrics is a moot point.
This first essay will help you gain a better understanding of the people who already use your product, while the second will help you determine the customers who are most valuable to your business.
Your customers may not be who you expect...
UNDERSTANDING YOUR EXISTING CUSTOMERS
The natural starting point for any customer exploration is to understand your existing customers. These people were motivated enough to visit your site or download your mobile app, and then took the time to learn its interface and use it. By making this initial contact, they've invited you to build a relationship with them. To do this right, you need to know who they are and limit the number of assumptions you make about them. Below are several ways to get your answers.
Talk to them
It's not rocket science, but a lot of people still omit this step. A simple introductory email usually works (sent via Gmail or an email marketing service like MailChimp or CampaignMonitor). It's best if it comes directly from the founder - I recently received a note from the founder of Quibb and it made me feel welcome in the community. If your site/app doesn't require people to sign up with email, use a live chat or customer support service like Olark and LiveChat for web and UserVoice and Appboy for mobile. You'll be surprised how much people will share, even if your questions are open-ended.
Meet them in person
There's nothing better than real, human contact with the people who buy/use your product. For B2B companies, in-person meetings are a regular part of business and a great opportunity to learn about customers. If, for whatever reason, you can't join these meetings, make sure to pick the brains of people who do (sales, biz dev, etc) to see what they've observed. For B2C companies, in-person interactions are much more difficult to scale, but can still provide a lot of valuable insights. To maximize your time, recruit a small group of influential and geographically co-located customers and invite them to a happy hour, meetup or other event. Community-focused companies like Yelp, TaskRabbit and Skillshare do this well.
Research their basic information
Without asking your customers outright, you should get a general sense of their demographics (gender, age, education, location, etc). Assuming you have their emails, a tool like Rapleaf can get you all of this information for a nominal amount. For more established websites, you can find it free of charge on Quantcast (but I would take these results with a grain of salt). You can also get a sense of your customers' social influence by tapping into their Facebook or Twitter profiles via tools like Intercom for web or Appboy for mobile. None of this data is perfect, but it will help uncover bigger trends that you may not have noticed, such as your site/app being used predominantly by women (Pinterest), attracting a large group of influential people (Rebel Mouse, Quibb) or gaining popularity outside the United States (Ignighter, now StepOut).
See how they're using your product
Understanding what your customers do with your product provides another valuable data point. What's the first thing they do when they visit your site/app? What pages/screens do they visit most often? How frequently do they use your product? What type of content do they generate? For aggregate site and usage analytics, use tools like Google Analytics for web or Flurry and Mixpanel for mobile. For more robust behavioral profiles and event tracking on mobile app, use a relationship management platform like Appboy.
Ask them to fill out a survey
A survey is often helpful to gauge the motivations behind your product's use as well as general attitudes towards it. To collect this data, you can use basic tool like Google Forms (which can be embedded directly into Gmail), or a more robust survey platform like FluidSurveys and SurveyMonkey. Remember to keep the survey short (6-7 questions), as people don't have time for a big commitment. Below I've synthesized the most important questions to ask your new customers:
How did you hear about our product/service?
What initially attracted you to it?
What do you like and dislike about it now?
What's the one thing we could do better?
In what situation do you use our product most?
What would you do if our product didn't exist?
Would you recommend our product?
Once you've gathered this data, you should have a much better understanding of your current audience and their needs, and have plenty of ideas to improve your business. You may also be in for a surprise, as your initial assumptions about them could be wrong.
But before you make any drastic changes, keep in mind that the people who are initially attracted to your product may not be your ideal customers. They may not see the benefit that you're offering, find it difficult to interact with your service, or simply prefer other alternatives. For freemium businesses, they are the ones who only use the free version of your product/app and never upgrade to a paid plan/make an in-app purchase. Trying to convince them about your value is probably not worth the effort.
Even if you're seeing a net positive relationship with your customers, you can't always be sure that they're right for you. It therefore helps to step back and examine the broader universe of people who may derive value from your product.
Stay tuned for Part 2 of this essay which will examine ways to determine your ideal customer.
Note: The second essay is finding your ideal customers.
Note: This post is part of my series on marketing fundamentals.
Disclaimer: I work for Appboy and I like Appboy, so I've recommended the platform several times in the context of mobile.
