Understanding Customers

• Customers include individuals or businesses acquiring goods or services from another business.
• Customers drive revenue, without revenues businesses struggle to exist.
• Businesses compete to attract customers through advertising, lower prices, or unique products and experiences.

Understanding Customers

• The adage "the customer is always right" is honored because happy customers are likely to award repeat business.
• Companies monitor customer relationships to gather feedback for product improvement.
• Customers are commonly classified as external or internal.
• External customers are separate from business operations and are interested in purchasing final goods and services.
• Internal customers are integrated into business operations, often as employees or within functional groups.

Customer Needs

• There are three main types of customer needs.
• They include functional, social and emotional needs.
• Functional needs are the most tangible and obvious of customer needs.
• Customers evaluate potential solutions based on whether they help achieve a task or function.
• A product that addresses functional needs is likely to be purchased or hired.
• Functional needs can be broad or specific, depending on the customer's buying criteria.
• An example of a customer with a functional need is someone saying they need a garden hose.
• Social needs relate to how a person wants to be perceived by others when using a product or service.
• Social needs vary from customer to customer and can influence a purchase decision.
• Emotional needs relate to how a customer wants to feel.
• Emotional needs are secondary to functional needs.
• An example, if gardening for a customer is relaxing, they will choose a basic hose; or might opt for a brand that evokes a feeling of nostalgia.
• Companies can tailor product messaging by identifying customer's emotional needs.

Key Information about Customers

• Find out customer's gender, age, marital status, and occupation if selling directly to individuals.
• Also find out information like the size and type of business when selling to companies.
• It is important to understand their occupations and interests when selling to individuals.
• It is worthwhile understanding what a business is trying to achieve when selling to them.
• Match customers with the correct product or service to match their specific needs.
• Approaching a customer when they are ready to buy increases chances of success.
• Successful sales can be achieved if what you offer matches what a customer can afford.
• It is worthwhile to serve customers based on what makes them tick.
• It is important to ensure delivery is always reliable since this generates repeat business.
• Tackling customer problems in a timely manner can increase the chances of another purchase.

Market Validation

• Market validation is the process of presenting a concept for a product to its target market.
• The goal is to learn from potential buyers whether the idea is worth pursuing.
• Market validation occurs early in the conception stage, before significant investment.
• Common market validation approaches include interviewing the target market and sending surveys.
• Market validation research must include direct contact and feedback from the product's intended market.
• Market validation is important because it helps secure funding and resources.
• Market validation helps teams to secure resources to make product concepts into reality.
• It also uncovers potential problems with a product idea.
• Target users may not need a standalone solution and are satisfied with an inexpensive alternative.
• If the consensus likes the idea but does not think it's important enough to pay for .
• Relevant target industries may not allocate adequate budget for a said solution.
• Market validation helps organizations uncover problems and learn whether an idea is worth pursuing.

Consumer Decision-Making Process

• The consumer decision-making process involves steps when making a purchase to determine what products and services best fit needs.
• Those who work in sales or marketing review the steps in the process by putting themselves in the customer's shoes.

Steps in Consumer Decision-Making

• The the consumer decision-making process includes 5 steps.
• The first step is problem recognition.
• The second alternative evaluation.
• The third step is information search.
• The forth step is purchase decision.
• The fifth step is post-purchase decision evaluation.
• Problem recognition involves recognizing the need for a service or product.
• Need recognition, prompted internally or externally, results in a want.
• Consumers gather information to understand how they can fulfill this want.
• Influence consumers with a comprehensive brand campaign to build brand awareness.
• A example, a customer will need a heavy-duty jacket if they are expecting snow.
• During information search, consumers rely on internal and external factors and past interactions with a product or brand.
• The customer browses through options at a physical location or consults online resources such as Google or customer reviews.
• You can allow people to access the information they need, with the hopes that they purchase your product or service.
• Use word of mouth, since consumers trust each other, consider customer reviews or video testimonials on websites.
• Alternatives evaluation involves weighing the prospective choices against comparable alternatives.
• Lower prices, additional product benefits, and personal options such as color or style may be alternatives.
• Provide marketing material geared towards convincing consumers that your product is superior.
• Be ready to overcome objections, such as competitors, to answer questions and compare benefits.
• The goal of the the consumer is to find a logical conclusion on the product or service to purchase.
• Done correctly will result in the consumer recognizing that a company's product is the the best option to decide to purchase.
• The seller should gauge whether the purchase met the the need the consumer identified, if the the customer is happy with the purchase and how to continue to engage with the the customer during the post-purchase decision evaluation.
• Ensure the customer continues to have a positive experience, which can be achieved with follow-up emails, discounts, and newsletters.