Running a successful small business is an intricate venture. Even the industry’s greatest entrepreneurial minds and most iconic thinkers acknowledge that innovation is always a challenge, and that finding a sure-fire formula for success is almost certainly impossible. Increasingly, however, experts are touting an optimized customer experience as, if not a sure-fire formula for success, at least a sure-fire way to avoid failure.
Peter Fader, a professor of marketing at the Wharton School of Business, has written at length about the importance of customer centricity to long-term success. Fader suggests that it is the development of a “management framework that allows companies to build stronger relationships with customers by better understanding their behaviors and anticipating their needs.”
Consultant Micah Solomon, a Forbes contributor, has echoed a similar sentiment: “Putting the customer at the center is a more complicated, subtle, and arduous adventure than it sounds. But it’s worth it…” And the more familiar you become with their ideas, the more obvious it becomes that any operation would run more smoothly if it truly had its customers as is focus.
Let’s take a look at four ways to ensure your customers are a primary focus:
Embrace feedback — even when it hurts.
Humans don’t like criticism, and this is especially true in the world of business. You’d be hard-pressed to find a CEO who wouldn’t defend his executive decisions to the death, and the same is true for just about anyone with any influence at all on a company’s inner workings. This sort of self-confidence is important for C-level executives, for sure, but the last thing that matters when providing a product or a service to customers is what you think about it. In fact, the only thing that matters is what the customer thinks.
Be sure to respond to customer feedback, accommodate customers, and incorporate their praise or complaints into future business decisions. And, in truly customer-centric fashion, don’t forget which customers told you what. Keeping a handle on individual preferences is crucial to provide a truly valuable, personalized customer experience.
Build relationships with customers.
Every small business seeks to build a relationship with its customers. Most, however, conceive of the sale as the culmination of a customer relationship, rather than a beginning or a point on a continuum. According to Professor Fader, such narrow focus on the bottom line is a poor way to acquire, retain, and develop customers.
The development of smartphones and the Internet have allowed information to spread faster than wildfire. For business people, this means that the competitive advantage they secure by virtue of their products’ or services’ points of differentiation and comparison are short-lived, as competitors will quickly develop answers to new product launches.
For instance, Company X can always produce something similar to your competing Product Y, and will, not long after hearing about it. If, however, you know what Customer Z likes to eat, drink, and buy during the holiday season, and your interactions with him or her revolve around that knowledge, you have something another competitor cannot easily reproduce. This is what modern marketing experts, like bloggers at Lanian, mean by developing relationships with your customers: Learn who they are and use that knowledge to offer them a truly personal experience.
Get a handle on CLV.
Before making big changes to your operations management or budgeting, it’s important to wrap your head around the idea of CLV, or customer lifetime value. Chances are such metrics as customer projected revenue, which companies use to estimate how valuable a given customer will be in the long run.
Professor Fader’s research suggests that these metrics fail because they rely exclusively on historical data. He recommends using the well-known but under-used metric of CLV to encourage more accurate targeting and segmentation activities. This, he claims, will result in more streamlined business activities on the whole and greater profits in the long-run.
Let the customer talk.
Believe it or not, customers don’t want to hear about what your product does better than the next guy’s. They don’t want to know your opinion on what they might or might not want. And even if you’re trying to be social in order to build the personal relationships mentioned above, they probably don’t want to hear anything about you — at all.
In fact, these are all things you should never say to a client. And for good reason. The client is there to tell you what they want and need, and you are there to advise them. Even if you don’t offer what they need or want. Even if you think they’re talking too much. Even if you’d rather talk about yourself.
In keeping with the principle of putting the customer before everything else, it is your job to listen, learn their interests, and cater to them to the best of your ability. This is a lot easier to do if you shut up and let the customer do the talking, and they’ll appreciate the genuine attention you give them.
This article has been edited and condensed.
Simon Crompton is a freelance journalist and entrepreneur, who spends the majority of his time blogging about business startups and consulting on web development. He has launched multiple online companies. He is also a dedicated follower of fashion, and has written for the Financial Times and GQ. Connect with @PermanentStle on Twitter