While many companies spend most of their time and effort focusing on product development and raising capital, one area that’s often overlooked is truly understanding your customers.
In marketing terms, if you know your target market’s pain points and struggles, you can position products or services to solve their problems. From an accounting standpoint, you can also time those products to their needs and time production to best capitalize on your supply chain demands.
Combining customer research and accounting can be a powerful tool to propel growth and improve profits. Keep reading as we share how customer insights could be the key to unlocking your company’s potential moving forward.
Focus on offering value to customers
Although you should be striving to create an excellent product or service to offer your customers, you should also be focusing on identifying your customers’ needs and exploring ways to overcome the problem they are facing. Adopting a customer-centric mindset can set you apart from the competition, and you’ll find that you start to focus more on what your customers find value from, as opposed to what the product can do for them.
By always keeping the customer’s needs in mind, organizations can position services or products that will appeal to them. And by understanding why they buy and when they buy it, businesses can make more informed purchasing decisions, better plan inventory and brainstorm new product lines to better serve their needs.
This can have a profound impacting on the financial health of a business in the short- and long-term.
Listen to customer feedback
Understanding your customers is critical for any business to thrive and grow.
While it can be natural to get defensive over criticisms and comments about your business, take the time to review the feedback you’ve received. Even when you truly believe in what you offer, it’s not going to appeal to everyone, so keep this in mind when you read reviews and comments that are left online.
Push yourself out of your comfort zone and ask for customer feedback from both new and existing customers. Improving customer loyalty is one of the best tools for securing a businesses future and will go a long way to ensuring more accurate forecasting reports, as you’ll be better informed about their future buying decisions.
Customer feedback can offer you more insight into buying trends and the future of your market, allowing you to allocate your development budget to the areas gathering the most interest from customers.
Review financial and customer data
Know that you've been researching your customers, gathering feedback and getting to understand them -- let's put it to action! Take the time to dive into how your customers affect your bottom line and where it intersects with your finances.
For example, calculating customer acquisition costs. This is a key activity to undertake when striving to learn more about your customers. You’ll find that it helps you to make more sustainable and profitable business decisions, as you’ll have a stronger understanding of how much your company spends per customer acquisition and how much revenue you gain back from each of these customers.
Consider every dollar spent acquiring a customer and how that spending is allocated between sales, marketing, customer service and research departments in the future. You might find that you are spending too little or too much on acquiring customers, and work to reallocate your budget accordingly.
Understanding your customer is one of the most important areas for businesses operating in any sector. Without your customers, you would cease to exist, which is why more time and effort needs to be put into researching and understanding your customers’ needs and expectations.
What drives your customers to purchase or use your services? How long are they using it or how long does it take them to purchase What keeps them coming back (or not coming back at all)? What trends do you see in the timing, volume, or purchase decisions?
Knowing the answers to these key questions is the only way to grow your business.
We all have our strengths and weaknesses in our job roles, and if you feel you are uncertain about how to best assess and improve the customer experience or understand all the implications, there’s nothing wrong with bringing in external help. Working with financial, marketing and operational professionals can help to take your business to the next level, as they are experienced at overcoming the myriad challenges that businesses face.
By truly understanding your customers, you'll start to see how connected the customer experience and buying trends are to your financial health. This will open up doors to better decisions and improved finances.
Remember, you don’t have to carry out this alone, and working with your finance team or outsourced CFO can assist with understanding the needs in your market.