Not knowing your customers is slowly killing you

14/02/2022 | By Naveed
Not knowing your customers is slowly killing you
Summary points:
  • Most brands underestimate the consequences of half-baked customer research

What's the single most common (and fatal) issue found at companies ranging from startups to enterprises? Not knowing the customer. Worse - assuming you do.

When deep customer research is postponed, well-meaning projects compound into a hot mess that can become impossible to undo.

You may immediately think ‘sure the customer is always right, I’ve heard that one before’. The truth? The customer isn’t always right. They do, however, hold the answers to most of your growth problems, if you (a) know what to ask them and (b) translate their responses into solutions.

Why is customer research ignored in the first place?

‘How can such smart, hard working people miss something so obvious?’, I’ve often wondered. I believe there are three fundamental reasons:

  1. Sunk cost: After hundreds of thousands of dollars have been funnelled into ad spend, MarTech and new hires, it's hard to admit that you've overlooked such a basic step.
  2. Placeholder research: Personas were developed at some point during the brand strategy stage, which was considered sufficient customer research.
  3. It sounds naive: The business is facing complex challenges and more customer research sounds like a far too simple solution.

Think back through your career. When was the last time someone proposed more customer research to fix the company's most pressing problems? Likely never.

Symptoms of poor customer affinity:

If you find yourself repeatedly hitting these following walls, you might want to question how intimately you know your audience.

  • Low conversion rates

You fail to speak to the customer's pains and goals in language that is engaging, and customers who actually need your solution bounce.

  • High CAC + Low activation rates

Your customer research lacks depth, which leads to poor copy and design decisions throughout the onboarding process. This leads users with high intent to drop off.

Additionally, your nurturing doesn’t address where the customer currently stands, nor where they want to be. Your product may have captured their attention, but you failed to spell out why it's the exact solution they need.

  • High churn

Failure to understand what the user wants from the product, and therefore how they must be assisted throughout the stages of the user journey, can lead to user frustration and high churn.

  • Low referral rates

People refer products that make them look good. If the customer feels no personal connection with your brand or product, word of mouth never takes off.

These afore-mentioned symptoms are often viewed as stand alone acquisition, onboarding or retention problems, and are rarely seen as failures to understand the multiple layers of customer needs.

More customer research… gotcha. What should I do next?:

Start small, and promise yourself you’ll talk to five customers and five non-customers in the next 30 days (two meetings a week). Get feedback on the most fundamental value you feel you provide to customers. Ask questions to get answers you know will sting.

Before doing that that, read this article on how to customer research like a pro, even if you aren’t one.

Written by Naveed

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