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Why Understanding Your Customer is the Key to Business Success

Understanding your customer is so important and it’s key to have both qualitative and quantitative data to make decisions.

I like to shop, and I think I am really good at it.

I have the ability to make wise and efficient purchasing decisions when shopping. This may include having a keen eye for identifying high-quality items, knowing how to find the best deals and bargains, calculating my cost per use, and being able to manage one’s budget effectively. Ultimately, being good at shopping involves a combination of practical skills, knowledge, and personal taste. In fact, I have made understanding shopping part of my job as a commerce strategist.

Shopping for me is often also a source of inspiration for new outfits, trends, and home décor. When I lived in an urban area with multiple malls, boutiques, and other shopping I used to walk around to browse, interact with items, and even layout designs at places like Crate and Barrel to further that shopping experience.  However, life changed, and I now live in a town with a population of 14K making it much harder to find inspiring places to browse locally. So, logically I turned online as so many people have over the last few years – 63 percent of shopping journeys start online.

From my perspectives some retailers are knocking it out of the park online, and some are really striking out. Why are they missing my expectations? Well, because they don’t really understand their customers at a deep level.

Lacking Customer Interaction

One of my favorite jewelry brands is one that I hate to shop online with.  They have very few pictures of the jewelry on someone, so it’s hard to get an idea of scale. When a recent purchase arrived and I opened the box, I was shocked by giant earrings when I was expecting something small.  It seems like it would be easy for them to post a lifestyle picture on their website so I wouldn’t have to drive 90 minutes one way to see the item in store and then possibly have to order it anyways because they didn’t have the color I wanted. Since moving, my value to them as a consumer has decreased and they don’t seem to care.

Positive Customer Experience

On the other hand, I recently bought glasses online for the first time and wow!  The virtual try on process was amazing (imagine if I had that for those giant earrings!) They made it easy to understand what was needed for my prescription and how to make them fit well. I love my new glasses. They also asked about the process, and I was happy to take 5 minutes to share feedback while shopping. Every time someone compliments the glasses, I am sharing where I got them. My value to that retailer is always growing and they know why.

Why Knowing Your Customer is Important

Understanding your customer is so important and it’s key to have both qualitative and quantitative data to make decisions.  Here are a few reasons why:

Meeting customer needs: By understanding your customer, you can gain insights into their needs, preferences, and behaviors, and tailor your products, services, and marketing efforts to meet those needs. This can help you build a loyal customer base and increase customer satisfaction.

Building customer relationships: Understanding your customer also allows you to establish a relationship of trust and loyalty. Customers are more likely to do business with companies that they feel understand and value them.

Differentiation from competitors: Understanding your customer can also help you differentiate your products and services from those of your competitors. By identifying gaps in the market, you can create unique offerings that meet the needs of your target customers.

Increased profitability: By understanding your customer, you can identify areas where you can increase sales and profitability. This may involve offering complementary products or services, targeting new customer segments, or optimizing pricing strategies.

Understanding your customers will help you quickly pinpoint what is going well and what gaps you have with your customers and experience.  In this case, the jewelry company would increase sales if they had a virtual try on option because I would buy way more from my couch.  The glasses company can count on my repeat business and great word-of-mouth advertising.

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Beth Duerr

Beth Duerr serves as a Commerce Strategy Consultant at Perficient, partnering with clients to define the best strategy and approach for their digital commerce transformation. With over ten years of experience in the commerce field, her practical operations, procurement, marketplace, and leadership experience brings a realistic approach to strategy.

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