Building Your Customer Base
Knowing your customers and continuously engaging them
As an entrepreneur you have one job: make your customer’s life better.
Every startup book, talk, article and podcast preaches that you must solve your customer’s unbearable pain point — “It’s better to have 10 people that love you rather than 100 that kinda like you” goes the latest startup cliche. This is all and well, except that nobody ever tells how to find these customers and discover their true pain — ever. There are three steps to solving a worthwhile problem: (i) identify the pain you want to remove; (ii) identify the most compact group of people that may experience this problem; (iii) verify the problem/solution fit with these people; (iv) repeat. Easy enough, right?
See what I just did? I just gave you the same generic startup advice you find everywhere. Finding your potential customers is hard work, and the most common reason why most startups fail — there is no algorithm to identify paying customers and their pain! In order to win, you must become your customer and live their pain and that’s the uncomfortable truth. Let’s get some real tactical advice on finding customers, shall we?
The only way to make your customer’s life better is to know who they are, and what their lives are like. If you can’t find at least 10 people to talk to that have the problem you are trying to solve: go back to start and do not collect $200. If you do, congratulations! Your job just got exponentially more difficult!
Start with the problem or pain you want to improve — this is your opportunity to make someone’s life better. What exactly is problem — be explicit. What is lost because of the inefficiency you are trying to solve? How is you potential customer shortchanged because of this problem? Have you actually tried going through the problem and experiencing the loss it causes? For example, you could claim that the problem you are solving is the time lost waiting in line to purchase concert tickets. Have you actually gone to buy concert tickets, and waited in line for hours? Have you gone with others who might be more emotionally invested in this process? The first step is to zero in on a problem and the burden it puts on your customer. Most entrepreneurs try to identify problems, but they often settle for nuisances — small inconveniences that people are bothered by, but not enough to pay you to make them disappear.
Once you have isolated an actual problem and its cost to those that experience it, you can use this “problem discovery” phase to identify a few community of people who experience the problem, and hopefully a group that are most severely impacted by the pain and most eager for an alternative. Those people are your potential customers. To build your customer base you have to find as many of these people as you can and learn everything about them so that you’ll be able to offer a solution that a) addresses their needs and b) they will actually buy/use. The next reason why startups fail is because the group of people willing to pay for their solution is too small to be viable business. Although you might only interact with 10–100 of these people, you need to make sure that there are enough of them to build a business.
To build a business you have to find a significant pain point, understand the people experiencing the pain, build a solution they would want and build a mechanism to convert them into customers.
In my case, the problem I’m addressing is the lack of beautiful affordable modest fashion. This is an issue for all women, as it’s hard to find stylish conservative clothing to wear to a job interview, meet the future-in-laws or attend a friends religious ceremony. However, the people most severely impacted by this market gap are women of faith who strongly believe in dressing modestly: Christian, Mormon, Jewish and Muslim women who require clothing that has high necklines, sleeves and goes to the knee or below. These are the potential customers that I focus on since their desire is so strong. Their current options are mainstream stores which have cute but revealing clothing or modest boutiques that have unflattering and dull pieces. The most common solution these women use is layering: undershirts, cardigans and skirt extenders. Another solution is alterations adding length and sleeves either themselves or with their go-to tailor. I wanted to make the lives of modest dressers easier by offering beautiful off-the-rack clothing that had the coverage they need — no layering and alterations needed.
Problem — lack of modest clothing.
Customers — religious women.
Current solutions — layering, alterations, unflattering modest clothing.
The most critical (and difficult) step in this process is to learn everything you can about your potential customers. There are countless articles and talks on customer discovery, creating customer profiles or personas and knowing your customers. The best resources I’ve found on customer discovery are: The Startup Owner’s Manual by Steve Blank and Bob Dorf, Customers Included by Mark Hurst and Talking to Humans by Giff Constable. The problem is, these books/talks can’t do the work for you. If you are an introvert, you can’t read yourself out of talking to customers. At some point, you will have to put the books down and hit the pavement to meet real people with real problems, not just hypothetical use-cases.
There are a few ways that you can do this, but the most important thing in this customer discovery process is to let them speak to you more than you speak to them. You cannot just iterate towards what customers want. You need to listen and observe their behaviors. This phase isn’t about customer telling you what they want, it’s about you learning everything about these customers to be able see the world as they see it. It is also important to understand not only where your potential customers are at today, but also where they hope to be in the future. A note for those of you who are your own customer, i.e. you’re solving a problem for yourself, don’t fall into the false belief that you not need to do as rigorous a customer discovery. It could be that what is a severe pain point for you is just a minor hassle for others. The only way you will know is through going out and talking to and observing potential customers.
Customer discovery is necessary to create and refine your solution. This is where you have to be clear on your goal of improving your customer’s life, but be flexible in working with customers to give them the solution they really want. In my case my initial idea was to have a flash-sale site with weekly modest fashion finds. I then moved on to having a modest boutique that stocked a variety of modest styles: casual, work and occasion wear. I now and mainly focused on feminine occasion wear. Each change in my offering has been driven by customers feedback. I learned they wanted a different solution by engaging with customers from handling customer service, hosting pop-up shops, sending out surveys and doing customer interviews.
Your loyalty is to your customers and making thier life better not your idea or solution. Work in collaboration with customers to give them the solution they want.
Constant engagement is not often talked about but it is one of the most important things to know about customer discovery. You should have an ongoing habit to hear from your customers because their lives are always changing. You want to periodically update your customer profiles though a constant feedback loop that informs your offering and grows your business. The best way to understand why this is so important is by companies who failed to do so like: Kodak and Radio Shack.
Do you remember capturing a “Kodak moment?” Kodak used to dominate the film industry but they failed to respond to customers’ shift to digital and mobile photography. Even thought they developed one of the earliest digital cameras and bought one of the first online photosharing sites, they insisted on using these new innovations to push printed pictures. They filed for bankruptcy in 2012.
My dad is an engineer, so he loves to fix things himself. Throughout my childhood he’d frequent Radio Shack to get the parts he needed. They would have all the cables, couplers, plugs, adapters and adhesives it took to make electronics work. As technology advanced, Radio Shack mistakenly assumed that the market for people who were tinkering, fixing and making things was too small. They shifted to the larger but more competitive market selling consumer electronics and mobile phones and their loyal DIY customers, my dad included, stopped shopping. In 2015 they filed for bankruptcy.
These examples illustrate the importance of constantly engaging with your customer to know about their life. No matter what stage your company is at, customers should be the driver of your product strategy. In Kodak’s case they were developing and investing in digital products but their strategy was still centered around print. Kodak wasn’t keeping up with customers shifting lifestyle to understand their new preference. Radio Shack made the opposite mistake of believing the customers to have changed more than they did. They assumed that even with a different product offering, their customers would continue to shop with them. Radio Shack didn’t know their customers well enough to realize that they didn’t want TV’s and cell phones; they wanted parts. They effectively alienated their core customers and went after a new customer — a textbook error that they could not recover from.
Building your business doesn't start with your product or service it starts with building your customers base. The lesson from Kodak and Radio Shack are that you can never lose your connection to your customer- your connection and knowledge of their life is your business. Here is a summary of how to constantly engage with customers to build a strong business:
- Intimately understand the problem you are addressing. What is most frustrating about the problem? Know all the current solutions and how your solution will improve your customer’s life.
- Figure out who are the people most frustrated by this problem and talk to them. Be a part of their lives by being where they already are: online communities, conferences, events, ect.
- Once you present a solution, as the founder, you should constantly be interfacing with your customers. At a minimum, dedicate some time each week to customer service.
- Pay close attention to the changes that are taking place in the world specifically as it relates to your customer’s lives. Every 6 months to a year do a more in depth surveys, interview or observations of customers to find out how the changing environment is affecting what they need from your business. Each time you do a survey revaluate and change your questions.
- Before you launch a new offering test and engage with customers. Don’t blindly follow competitors. Ask your customers what they think of the competition and what they think is different about you (Radio Shack example).
Zahra Aljabri is the CEO and co-founder of Mode-sty the first multi brand e-commerce to cater to modest women. You can reach her at stylist@mode-sty.com
