5 Tips for Understanding Your Customers Better

While attracting new customers is always a major goal for any small business, it’s just as important to learn how to keep the ones you already have. One of the best ways to do this – and in turn attract new customers so that your business continues to grow – is to get to understand your customers, where they fit in their industry, and their specific needs.

By understanding a customer’s business nearly as well as they do, you can take the typical customer-vendor relationship to the next level. When your customer sees that you really understand their business needs, you turn that relationship into a partnership – one that benefits both sides.

Here are five things you can do to know your customers better. As your reputation grows, don't be surprised if your dedication leads to new leads, too. Everyone wants to be understood, after all.

1. Ask Questions

It may seem obvious, but this tip is definitely worth mentioning. Don’t be afraid to ask your client as many questions as necessary to ensure you fully understand their business and how they operate. Make sure you’re asking the right questions, too. Just as important as asking “how” is asking “why.” Rather than looking ignorant, you’ll convey to the customer that you’re truly interested in getting to know their business and thus helping them accomplish their goals.

Go Deeper: There’s no such thing as a dumb question — but if they’ve been your client for a while, you might want to do some research on your own to make sure your questions are appropriate. Asking extremely basic questions about the fundamental nature of their business a year down the line might look careless. In that scenario, it would probably make sense to hop on their website before the meeting, learn what you can, and then ask targeted follow-up questions.

2. Go With the (Money) Flow

Grasping the natural flow of money in your customer’s particular industry is vital to understanding what drives their business. Learn about the customer’s revenue model so that you can come up with new ideas that fit in their own approach to the business.

Go Deeper: You’ll already be immersed in financial data, but sometimes, it can be hard to see the forest for the trees. Accounting management software can help you deliver the actionable insights that clients expect by providing analytics on top of pure data. Software can often identify trends more quickly and efficiently than human employees.

3. Research the Competition

Just about every client has competitors. Part of working effectively with your clients effectively is knowing who their competitors are in the space and where they might have stumbled, so that you can help your clients avoid making the same mistakes and gain a competitive edge. Look at areas such as partnerships, pricing, and user expectations.

Go Deeper: Consider conducting a SWOT analysis, a common tool for assessing strengths, weaknesses, opportunities, and threats. You can examine your client as well as their competitors through this lens. This will help you understand strengths and weaknesses for everyone involved, allowing you to provide better recommendations based on that information.

A number of paid tools can also be used for competition research and analysis. Do some research before making a recommendation to your customer—if they take your advice and it works well, it will be more evidence that you understand them and add value to their company.

4. Understand Client Partnerships

Today, just about every company needs to develop solid partnerships with vendors and providers to succeed, especially in the digital space but in other industries as well. Examine the role each of your customer’s partners plays in the business and see if there may be ways to improve upon those partnerships, or even whether they are all necessary.

Go Deeper: Effective client-vender relationships are crucial in numerous ways. Consider the following questions on behalf of your customer:

• Is there a more affordable vendor option without sacrificing quality?
• Does this vendor’s reputation jibe with your client’s?
• Is this a function that should be taken in-house?
• Does this vendor represent the scalability that makes the most sense for your client?
• Are there opportunities to negotiate better terms or more value for your client?
• Does the vendor offer innovations or features that make your client more competitive?

You can prove your value to your customers by helping them achieve maximum efficiency in these other relationships.

5. Understand the Client’s End Customer

Just like with your own company, the lifeblood of your client’s business is their end customers. Ask who their target customers are and why a person or a company would spend money on their product or service. Again, this one may seem fairly obvious. But taking the time to really know where the end customer is coming from and what may drive a purchasing decision can help you come up with suggestions for improving your client’s products and services, or even streamlining their business by eliminating unnecessary elements.

By following these simple but important tips, you can serve each customer better and ultimately position your own business as a truly valuable partner that your new and existing customers will want to work with again and again.

Go Deeper: In addition to asking questions, ask your client if you can have a look at their customer data. If they don’t have the information you’re looking for, offer recommendations to help them acquire it. Help them craft a survey or another feedback mechanism so they can start amassing what they need to make data-driven decisions for their company’s future. For every insight they gain about their customer base, you’ll understand your customer a little better.

Take the Next Step to Understand Your Customers

It all comes down to building trust and making your guidance invaluable. By following these simple but important tips, you can serve each customer better and ultimately position your business as a truly valuable partner that your new and existing customers will want to work with again and again. 

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