Understanding customers and their needs

What do customers want? and when do customers spend money?
Changing economic times have made it tough for business organizations to get profits. Everyone says it is tough to get business. Why is it so?
Is it that people don’t have money?  Yes, to some extent people who lost earning and don’t have income are spending less money.
But still some businesses are doing good
Though I am not an expert, I have some thoughts to share.

1. Customers spend when they realize value of their spending

Customers will spend money when they feel they are getting their money’s worth. Money’s worth cannot always be quantified. Lot of times customer satisfaction can be linked to happiness and emotional aspects.

When we go out to eat and spend money, we are not measuring Return on Investment. We feel happy when we eat out once in a while.

And I sometimes feel when it comes to spending money, people will spend even if it is costly as long as it means their other needs.

2. Customers want to feel they have done a smart thing

Customers want to be known for their intelligence and smartness.

Imagine you bought an item for 1000 bucks and after you made the purchase you find that you can get the same one for much cheaper price.  Customers want to take pride in their purchasing decisions.

It applies not only to the money they paid, but the brand and company or store from where they purchased it. You will always notice when some one acquires a new item, they are eager to share how smart the purchase was made. I have done that and every one does it. It is natural for us.

3. Customers look for value

Customers not only look for short term value but a long term value.

They look for good service also. Customers like to be associated with a business that is growing. Customers who feel happy tell others.

4. Customers want to grow and improve their life

Customers will spend money on things that makes them feel that they are making improvements in their life. They will spend money on items even if they are costly.

Someone may buy a new car even in tough economic times because he has been thinking about it for a long time and saved money to get his need fulfilled.

Anything that is going help customers be successful and grow is always consider ed worthy of the money spent.

What do these things mean?

If you are operating a business? do some reflection.

What items do people buy from you? Why? What is the value they are getting?
What items are you not able to sell? Either a small business or enterprise it is always important to keep thinking on a continuous basis what is the the value the business is providing to customers. Focusing on value to customers it is easier to convince customers on how to adopt. As long as customers are not convinced about this fact, it is not possible to make a sale.

To make customers realize the value lot of times it is necessary to do various other things -

Give a preview of the product -

Communicate value in various ways.

I know this is a big topic to discuss and there is lot of literature on the same. But focusing on these simple aspects is essence of customer needs and attracting and retaining customers is what I wanted to convey.

Next time you feel happy with a purchase you made, you can realize what I said is true.

Basic Lessons for an Entrepreneur

I attended a workshop on how to become an entrepreneur when I was in IIT Kanpur. The basic lessons learned that I can still recollect are:

Do a Market Survey
Build a unique position
Have Humanitarian Purpose

Do a Market Survey

Before you start a business do a market survey. Understand the product needs of the community and identify products that are needed. Starting a business, which does not have any utility in community, will be a futile exercise.

Build a unique position

Find the factors that will make you a ‘unique’ businessperson compared to others. Assess the competitive edge properly.

Assessing Demand for commodities

There are some items that are in demand forever and some are seasonal and some change with times. Assess risks for each type and plan accordingly.

Demand Forever: Food Items, Groceries, Fruits etc. Demand for these products will exists as long as humans exist Quality of items you offer will differentiate you from others

Seasonal Demand: Based on particular occasions like Festivals these items are in demand Meeting timely demands will be needed. Quality of items will be differentiating factor

Changing Demands: Typically these items are governed by changing technology and needs of people.

Being first in the market can be a major differentiating factor beside quality.

Your business should strike a unique chord for the customers. This should differentiate you from competitors and help you stay in business without worry. If competition is catching up on do necessary improvements to stay different and maintain the unique position.

Have Humanitarian Purpose

Have proper intentions: Intentions should be social oriented and not just business terms.

Let the focus not remain on just making profit. Have a humanistic picture of providing jobs for people, serving people, helping people and building a better society, culture as goals for business. If such objectives are set and served making profit will be met automatically.

Name the ways we can serve you: Importance of Customer Feedback

In business scenario customer feedback is very important. Business Organizations cannot afford to neglect the crucial feedback that is necessary to make customer happy. This is very simple if you imagine owner of shop interacting with a customer by face to face communication the shopkeepers were intelligent and changed their styles/merchandise according to the needs of customer. The same will apply to business organizations that are small in size and very few people are involved. As organizations grow the gap between organizations owners and customers widens. One way to bridge this is owners to be physically present to understand customer behavior. Successful business organizations do this.

When this becomes impossible non-personal means of soliciting feedback should be resorted to. Complaints and Suggestion box is one way of inviting feedback. Let the customer say what he likes and what he dislikes. This culture is very predominant in Western Countries. The basic culture does not exist in Indian Markets. Very few organizations resort to this practice.

In Western organizations they use various means to solicit the feedback. For example, if you visit a restaurant at the time of waiting for your bill to arrive you can fill the feedback form and return the same. I have not seen this practice in India.

I give lot of importance to continuous improvement. It is very difficult to identify changes to be made in an organization by imagining what the customer needs. The best way to identify is ask the customer. Customers will be very happy to tell you what they like and dislike.

When we start asking for feedback we frequently get what customers disliked rather than what they liked. This does not mean everything we are doing is wrong. We are doing things well and some things that are doing badly over shadow the good things and spoil the overall image.

To cultivate this practice in India needs a cultural change. Spontaneity in communication has to be achieved. There is a cultural aspect of Indian that tends to be indifferent. We receive bad service and we ignore this and do not give any feedback. This bad service will be repeated to so many other customers. Only when we give spontaneous feedback we can atleast initiate atleast some change.

Implementing this Feedback Management has to be done with a clear goal of improving services and business. This should not be done for the sake of doing it.

Implement Feedback system to know what the customer has to say about you. Follow very simple system.

• Create a suggestion box
• Create a very simple format of feedback page. Give it to them when they are waiting for bill clearance.
• Consolidate Feedback and Action as frequently as possible
• Implement any change required
• Thank the customer

Keep doing this consistently. You will find customers happy to do business with you.

Understanding requirements

Understanding customer requirements is the first step towards customer satisfaction. Understanding user requirements is a difficult task in any Industry. More so in Software field where the field is evolving and customer expectations are changing fast. Changing technology makes the process of satisfying customers more difficult.

Understanding practical example of a restaurant can give an idea how requirements get specified and what analysis goes into the same.

Requirements need to be validated with a set criteria. Refined and translated to a more specific criteria.

A customer goes to hotel and asks for a coffee. The various statements that can come in this scenario with varying degree of specific nature of requirements:

• Get me a coffee
• Get me a black coffee
• Get me a coffee without sugar
• Get me a strong coffee without sugar
• Get me a strong coffee with lot of sugar
• Get me a coffee without sugar fast.
• Get me a Hot coffee without sugar in 5 minutes
• Get me a coffee with biscuits/snacks

The scenario where the specifications are very elaborate are easy to comply with and satisfy customer. In each of the above cases there are still some inherent specifications which is left to the supplier. The supplier has to use his own judgement/expertise and satisfy the customer.

Various methods for satisfying customer in each of above scenarios is mentioned below:

Requirement: Get me a Hot coffee without sugar in 5 minutes

Comment: Requirement very clear and elaborate. Even then qualitative aspect of Hot coffee is to be judged by supplier. Should confirm with customer whether the coffee is hot enough to ensure customer satisfaction. Check with customer whether he wants something to munch before he gets to his coffee.

Requirement: Get me a coffee without sugar fast.

Comment: Fast is not specific enough. Should confirm/judge about the time frame. 1 minute or 5 minutes

Requirement: Get me a strong coffee with lot of sugar

Comment: Strong and lot of sugar are subjective. An expert supplier will understand what is enough. Other option is to give the customer Coffee pot with milk and sugar cubes so that the customer can decide how much he needs.

Requirement: Get me a strong coffee without sugar

Comment: Similar to above scenario and leaving out sugar cubes is enough.

In all the above scenarios one aspect of ‘presentation’ is never stated. Whether coffee will be served in a cup or glass or flask is again dependent on the supplier. But there are hidden customer expectations on the same which will be never stated. E.g. you don’t expect a 5 star hotel to serve coffee in a steel glass. If you do so you are not satisfying the customer. In a similar way, a person taking coffee in a fast food restaurant does not expect to be served with a tray of milk, sugar cubes etc.

If a simple scenario of serving coffee has so many complications attached, software requirement specifications are much more difficult to understand.

Some critical steps towards customer satisfaction are:

1. ‘Listen’ to your customer
2. Deliberate on his demands
3. Validate the requirements against standards
4. Seek clarifications in case of doubt
5. Have the communication channel with your customer ‘open’
6. Promise delivery after proper understanding of expectations
7. Deliver on or before time
8. Check with customer how he much he is satisfied with the product
9. Make corrections if needed and possible.

Rules:

1. Do not deviate from what customer expects. If you can’t meet expectations communicate to the customer with valid reasons immediately. Users are rational.
2. The more specific the customer the better for you.
3. Always ask questions. In some cases customer can contradict his statements.
4. Never assume customer’s expectations. Have dialog with customer if possible or experts in the field.

Use tips and rules given above while evaluating requirements in future.