Have you ever looked at a business and wondered how they always seem to know exactly what products and services to offer? It seems like clients/customers flock to them. The answer is simple: they have mastered the art of using data to drive their business. Data is the single best way to determine what your customers want and need, as well as to continuously attract new customers. Yet, the term and concept can seem very ambiguous––almost more of a theory than a concept.
If I were to ask you to define your business, to outline for me what your services and products are, what your business specialty is, what niche your business fills, and who your ideal customer is, could you tell me? Or would I get vague answers, leaving me wondering how well you know your business. Before we can jump into learning to use data to define what you should see and to whom, we need to have a good understanding of these topics, and many others.
The best way to increase business is to offer not what your clients want, but the solution to their largest problems. This may seem a bit backwards, but I promise it will ensure continuous growth, recommendations, and satisfied customers. To be 100% honest, none of us truly knows what we want, but each of us can tell you what problems we want or need solved. When you know how to collect and analyze data, you will know the solutions your customers need before they know they have a problem.
You can learn the concept of using data to drive your business in six simple steps.
Step One: Identify Your Competitors
Every business has what they do well, and what they can do better. Every business wants to operate at the highest level of customer satisfaction. In order to get there, we have to be honest with our customers and ourselves. When we know what we do best, and what our competitors do best, we know our weaknesses, and create partnerships to fill the gaps. This will ensure that no matter what our customers need, we can exceed their expectations.
Step Two: Identify the current problems in your community
No community is perfect. Each one has its own unique sets of challenges. Take some time to study the community you currently serve. Ask yourself what challenges or problems you see. Once you have identified these challenges, ask what local businesses can do to solve these problems. Look at the challenges that are currently unmet. Ask a select group of community members––those you can trust for honest answers––if they agree that these are challenges in need of solutions.
Step Three: Identify how your business can solve these problems
Taking the information provided by your sample group, create a custom solution for the identified problems. Offer these services and products to a select group of customers, a pilot group, or program. Ask them for feedback! Use this feedback to tweak your services and products. Most often, those in this group are charged a reduced rate to compensate them for their time and feedback.
Step Four: Identify the ideal customer
Once you know what the problems of the community are, and the perfect solution for these problems, define your ideal customer. Not every person who lives in the community will want the solutions you created, or even agree on the identified challenges. As a business, you don’t want every person in your community to be your ideal customer, but there is no possible way you could meet the needs of such a wide target audience. Rather, you want a very focused group of ideal customers. Ask yourself these five questions:
- Who are your services/products geared to?
- Who would be your ideal customer?
- Why would this group be your ideal customer?
- What unique services/products can you offer to this group?
- What makes your business the ideal business for this group of customers?
Step Five: Create a customer avatar
Once you have answered these questions, you will want to build a customer avatar. This is a popular concept with many businesses. The goal is to get to know your target customers as well as possible, so well, you can predict what they want and need. An avatar will allow you to give some personality to your collected data. This will help you create marketing campaigns, know where to advertise, and even plan sales.
Step Six: Implementing your Hypothesis
Now that you have done all the research and hard work, it’s time to launch your product or service. This is the fun part. This is where you get to test your hypothesis, see if the data you collected is accurate, and identify any areas of weakness. Be prepared to adapt and pivot after the official launch. There is no amount of preparation that will ensure your product and solutions will be perfect upon launch. As we have seen, a lot can happen in a month, and there are many factors that affect consumer behavior.
While I cannot promise you success, I can promise that this method will ensure a much higher rate of return on your investment and save your valuable time. Next week, we will explore data-driven decision making and how to use it to your advantage.
**Please note, topics covered in this column, are written for business owners, entrepreneurs, leaders, and nonprofit executives. As each column will cover a tool, tip, or skill, I may say business instead of organization, or for the sake of simplicity, simply say business. Please note, all these tips can be used in any setting.
Sara Orellana is an independent entrepreneur who specializes in strategic planning, leadership, and grant writing. She can be reached at sara@3raptorconsulting.com.