You know who your customers are, but do you understand them? Understanding them could mean the difference between retaining customers and losing them to the competition.
Earlier this year, I laid out "The 12 C's for Thriving in a Digital Age," 12 key components for creating a successful digital business. In the last of this series, I'd like to discuss the most important C: the customer.
Knowing vs. Understanding Your Customer
There's a difference between knowing who your customer is and understanding your customer. You need to do both. Most people spend most of their time on the former and too little time on the latter. This will ultimately result in failure. Why? If you don't understand your customer, you won't have full clarity on your value proposition.
Knowing your customers -- information typically collected by a business -- means you know who they are demographically, what content they're reading, and so on. Most companies do a good job on this front.
When it comes to understanding customers, however, many companies come up short. Understanding customers helps businesses deliver an online product with meaningful and compelling value propositions that meet not only their current needs but also their evolving and future needs.
Do you understand your customers? Ask yourself:
Each question represents an opportunity for you. If you can understand your customers' perspective in each instance and can offer a solution, you'll have delivered a valuable, memorable, and referral-worthy online product.
Let's consider one company that didn't understand its customer and one that did.
Failing to Understand Customers
I worked with an industry-leading consumer magazine that had a Web site with a few million monthly visitors. The site's traffic growth had flat-lined and was starting to trend downward. For many decades, this magazine brand's claim to fame was its niche content, therefore it was plastered front and center on every new online product launch. Let's call it Content X.
I asked about the audience's needs so that we could design a targeted and compelling user experience. Everyone on the management team said customers wanted Content X. I wasn't convinced and ran focus groups, which revealed 95 percent of the participants said they no longer cared about Content X and were going to other Web sites to help them research, find, and purchase merchandise for a particular vertical. Thus, the publication lost readers because other Web sites filled a gap, providing content to help its readers.
In addition, the other Web sites provided a new and better approach to helping customers complete their tasks. The incumbent did not understand its customers' evolving preferences and, therefore, it didn't innovate, whereas its competitors did.
Drudge Report, Doing It Right
Whether you love the Drudge Report or hate it, it understands its audience and relentlessly serves readers' needs. The site absolutely nails it. It seems to understand my information needs as a frequent site visitor better than I do. Let's look at what it delivers; you might want to apply these principles to your Web sites and digital products:
So as you proceed with your digital initiatives, keep the 12 Cs in mind.
P.S. This column wraps up my contributions to ClickZ's
Join us for a ClickZ Webinar: Transparent CPL Advertising: The Biggest Missed Opportunity in Your Online Strategy on October 15.
Lee Huang specializes in developing digital strategies that enable companies to monetize their digital assets, create innovative online products, and leverage emerging technologies to better serve their audience and advertisers. He is director of digital strategy and product development at NBC Universal. Before joining NBCU, he led the development of successful Internet strategies, Web sites, and interactive solutions for media and entertainment companies, including Billboard, Hearst, Scripps Networks, Hollywood Reporter, and Consumer Reports. Lee created The 12 Cs, a framework for thriving in the digital age that focuses on developing an integrated business and technology strategy, along with an adaptive infrastructure that enables rapid execution.
He serves on the board and leads the New York chapter of the Internet Strategy Forum, a professional association for executives who lead their company's Internet strategy and initiatives.
Lee lives in New York City. He can be reached at firstname.lastname@example.org.
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