90% of entrepreneurs or businesses spend a lot of time and effort on product development, infrastructure and other areas. But very few of them spend adequate time on the consumer. This can be attributed to the fact that they think 'they know' what the customer wants or they have a big ego about what they think is right.
It is this ego or gut-feel (which encouraged them to be entrepreneurs in the first place) which impedes their connection with their customers. The lack of understanding of customer is one of the primary reasons for business failure.
The bottom line is that all entrepreneurs sell a single product - ' Satisfying a Customer's Need'. However they need to do some research to figure out whether they are actually doing that, and what it would take for them to differentiate significantly from the competition.
Customer is the person who makes a tipping decision about the product. Given two refrigerator brands with almost similar features, the wife who decided that a specific color refrigerator matches the curtains made the tipping decision. It is surprising to note that in India, a lot of tipping decisions ,in diverse areas like buying a shirt to buying a cement , are made by women.
Customer don't buy a product. They buy an 'aspect of a product', like the coolness embodied in the chewing gum or the 'convenience' of a Maggi Noodle or the 'ache removal' property of Moov. Businesses need to understand which aspect of product do their customer buy and work continuously on improving that 'aspect'.
Similarly we need to understand the 'aspect of the consumer' which buys the product. The 'motherness' in a woman buys a Horlicks, 'the caring attitude' of a relative buys Vicks etc.
The entrepreneur has to listen, watch and experience her customer. And when you start doing that the amazing world of consumer behavior opens up.
A manufacturer of 'anti-lice' shampoo discovered that customers believed that lice= dirty hair, whereas in reality lice prefer clean hair. Makers of Savlon discovered that people believed that the stinging feeling of Dettol is an indication that it works well vis-a-vis a Savalon which doesn't work well (since it does not sting).
This is especially important if you are want to differentiate in a significant way.
Conventionally books were distributed in India through the book stalls. Along came a company called Crossword, which basically wanted to encourage reading. Their logic was that a book lover will buy a book anyway. Selling a book to a non-lover will create a new market and a significant differentiation for Crossword .So they allowed people to sit endlessly in bookshops and browse through books and magazines. In certain bookshops where they had a good retail store front, they placed the browser seats bang on the store front. They reckoned that the 'browsers' were acting as free models for advertising their shops.
They also ensured a 15 day return policy (not done by anyone else, with a return rate of less than 0.1%), included children section for books (which was initially dismissed by experts but contributes to 30% of sales) and various other programs by observing and analyzing their customers.
Most of these initiatives went against the grain of conventional wisdom in book selling.
Therefore the entrepreneur must hold his hand on heart, and before working on a product/marketing strategy have an honest discussion with herself. How much does she know about her customers and is it enough?
Is there a need to know more, study more ?
Frankly there is no end to journey of knowing the customer. However beyond a point, more research yield diminishing returns.
But gut feel cannot be substitute for research and understanding of customers. So understanding 'how much to know' is critical to business success.
It is this ego or gut-feel (which encouraged them to be entrepreneurs in the first place) which impedes their connection with their customers. The lack of understanding of customer is one of the primary reasons for business failure.
The bottom line is that all entrepreneurs sell a single product - ' Satisfying a Customer's Need'. However they need to do some research to figure out whether they are actually doing that, and what it would take for them to differentiate significantly from the competition.
Customer is the person who makes a tipping decision about the product. Given two refrigerator brands with almost similar features, the wife who decided that a specific color refrigerator matches the curtains made the tipping decision. It is surprising to note that in India, a lot of tipping decisions ,in diverse areas like buying a shirt to buying a cement , are made by women.
Customer don't buy a product. They buy an 'aspect of a product', like the coolness embodied in the chewing gum or the 'convenience' of a Maggi Noodle or the 'ache removal' property of Moov. Businesses need to understand which aspect of product do their customer buy and work continuously on improving that 'aspect'.
Similarly we need to understand the 'aspect of the consumer' which buys the product. The 'motherness' in a woman buys a Horlicks, 'the caring attitude' of a relative buys Vicks etc.
The entrepreneur has to listen, watch and experience her customer. And when you start doing that the amazing world of consumer behavior opens up.
A manufacturer of 'anti-lice' shampoo discovered that customers believed that lice= dirty hair, whereas in reality lice prefer clean hair. Makers of Savlon discovered that people believed that the stinging feeling of Dettol is an indication that it works well vis-a-vis a Savalon which doesn't work well (since it does not sting).
This is especially important if you are want to differentiate in a significant way.
Conventionally books were distributed in India through the book stalls. Along came a company called Crossword, which basically wanted to encourage reading. Their logic was that a book lover will buy a book anyway. Selling a book to a non-lover will create a new market and a significant differentiation for Crossword .So they allowed people to sit endlessly in bookshops and browse through books and magazines. In certain bookshops where they had a good retail store front, they placed the browser seats bang on the store front. They reckoned that the 'browsers' were acting as free models for advertising their shops.
They also ensured a 15 day return policy (not done by anyone else, with a return rate of less than 0.1%), included children section for books (which was initially dismissed by experts but contributes to 30% of sales) and various other programs by observing and analyzing their customers.
Most of these initiatives went against the grain of conventional wisdom in book selling.
Therefore the entrepreneur must hold his hand on heart, and before working on a product/marketing strategy have an honest discussion with herself. How much does she know about her customers and is it enough?
Is there a need to know more, study more ?
Frankly there is no end to journey of knowing the customer. However beyond a point, more research yield diminishing returns.
But gut feel cannot be substitute for research and understanding of customers. So understanding 'how much to know' is critical to business success.
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