Your customers or clients have much more impact on your business than you might realise. They not only impact your profit and success, but their behaviours dictate many aspects of your activity and your industry as a whole.
So how do customers influence a business? We’ll look at the following areas:
- Your products and services
- Your reputation
- Your marketing
- Your business direction
Your products and services
Many businesses begin by finding a gap in the market or spotting an opportunity to meet customer needs in a better way than competitors. Often, entrepreneurs will research gaps in the market to ensure their business idea has a legitimate audience to prove that the business can be viable and sustainable. This kind of audience research will usually be compiled in a business plan. It can be revisited over the years to help make business decisions based on your target audience’s needs for certain products or services.
You might find that your customers help shape your product offering in different ways. Perhaps you have a product that isn’t a bestseller but you find it attracts the most repeat customers, by examining website data such as Google Analytics. This small but committed audience of repeat customers is a valuable group who trust your business. If you drop the product they may find one of your competitors to purchase with instead. This would both lose you sales and potentially the trust and reputation you have built with that audience.
Clients can also guide your service offering if you are a service-based business, such as a marketing freelancer or financial consultant. If a customer asks for services that you do not usually offer, you might find there is a gap that you could be filling in the market for this particular service or set of services. By listening to clients’ needs, they might highlight new areas for you to expand your business into.
Customer service is hugely important in building trust with an audience and the more they trust you, the more likely they are to buy from you. It’s been proven that it’s far more expensive to find new customers than it is to retain existing ones. A big part of that is providing an excellent customer experience that creates trust between the individual and your company.
Customer reviews on bad experiences or the poor resolution of issues can affect future sales. Over 76% of customers do their research before making a purchase, including looking at reviews. A user may be put off purchasing by bad customer reviews and this will affect your reputation amongst both potential customers and your competitors.
One way to stay on top of your reputation is to always respond to feedback, positive or negative. This will build trust with customers and future customers who will see that you’re trying to improve.
The key to any successful marketing strategy is to be where your customers are. Any marketing decisions should be influenced by your customers, whether that is existing customers or you are trying to find new audiences.
To do this, you need data about your target audience so that you can shape your marketing around them. You can gain this by accessing online tools such as YouGov or Google Analytics (to look at your existing audience). By allowing your audience insights to shape your marketing activity, the people you want to reach will be more likely to see your advertising and then purchase from you.
Don’t waste time on certain advertising platforms if it isn’t where your audience ‘live’ online. For example, if you were targeting Gen Z’ers, rather than putting out a newspaper advert, you might use TikTok or Instagram to reach this audience.
Customers are also your biggest advocates. Once you have built trust with an audience, they are likely to use social media and word of mouth within their own social circles. You may also notice that your repeat purchase totals are rising, meaning that existing customers who trust your business are choosing to buy from you again. In doing so, they become advocates for your company as happy, returning customers are a great advert for your business.
Big brands know how to capitalise on this and use their customers as their own ‘influencers’, by using hashtags like #mycalvins. As another example, the makeup brand Glossier uses customer pictures on their own feed.
Your business direction
Customer behaviours influence entire industries or sometimes even create new industries. The most successful businesses anticipate customer behaviour and provide a product or service just as (or sometimes even before) the general public realise they want it.
Think of Amazon, which started as a book directory and has adapted to accommodate every type of product sale you could imagine. Businesses like Deliveroo and Just Eat also capitalised on the way that smartphone technology allowed consumers to research and have more choice with takeaway meals from the convenience of their homes.
Never has this been truer than in how customers influence the retail industry. Shopping habits have created a vast difference between performance in ecommerce and brick-and-mortar stores. Fewer physical stores are opening and more are closing on British high streets, especially after the pandemic.
We heard earlier that customer behaviour has changed, with more doing their research online before making a purchase, so the need for an effective website has never been more important. If you cannot accommodate your target audience’s shopping habits, your competitors probably will.
If you are a company that doesn’t do business online, it may be worth investigating your target audience some more to see if digital is a valuable direction for your company to head in. The rule of thumb is ‘be where your customers are’ and if your industry is booming online and you aren’t there yet, you should be.
The simple app that helps you focus
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Find out more here to save yourself unnecessary accounting and financial admin stress, so that you can you focus on listening to your customers for a successful business.