Topic of the Week (TOTW): Know Your Customer

2ekltvtThis week’s discussion topic focused on best practices for understanding customers.  Our team members shared some unique experiences, which surfaced a handful of best practices relevant to just about any start-up.

Here are four best practices that emerged from the discussion:

  1. Ask the “right question”. It is always a good idea to ask your customer questions, but this idea is a little different.  One of our partners led a large b-to-b sales force, and learned the importance of asking the one key right question.  For example, if you are selling IT solutions the question might be “How does the CIO get paid?”  The answer to that question provides insights into the customer’s concerns and priorities and helps you to position your offering in the most compelling way.
  2. Provide a unique benefit. A start-up usually has to compete head-to-head with other companies on many features and benefits.  But where you can really win is in finding and offering something important to the customer that your competitors would struggle to offer.  For example, one company with a small market share offered discounts on its services to the employees of its corporate customers.  This was perceived as a valuable benefit to the corporate customers and its employees, and was also effective at new customer acquisition.  But larger competitors with larger market shares could not afford to offer a similar benefit because so many employees already used their service.  Often, a startup can do something that larger competitors can’t, and if it provides meaningful benefits it can be a powerful competitive advantage.
  3. Be careful of assumptions. Don’t assume that you know what the customer’s most critical problems are.  Sometimes customers are reluctant to be open about their deepest concerns, but that is where you may be able to make the biggest difference.  And a customer’s needs can change over time – don’t assume they are static. Don’t assume you know what the customer wants or needs.
  4. Talk in the customer’s language. It pays to understand the customer’s industry lingo, and even the unique terminology within a given company.  Use their language, not the language of your competitor set.

All of these best practices depend on careful listening, and that leads to a couple of additional best  practices:  Where possible, it is always best to meet in person, and it usually helps to have more than one person in a sales meeting, because they will each hear and pick up on different signals.

Posted in News & Views.