Knowing vs. Understanding Your Customer

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:

  • Why are customers interested in the articles they read?
  • What problems they are trying to solve?
  • What questions are they trying to answer?
  • What information is hard for your audience to find?
  • What are your readers’ objectives and what workflow processes do they try to go through to achieve those objectives?
  • Why are customers going to your competitors’ Web sites in addition to yours? Why are some abandoning yours altogether? (See “Surviving Your Competitors” to get details on how to identify and analyze competitors).
  • Why do your customers give word-of-mouth referrals to competitive Web sites but not yours?
  • How are your customers’ behaviors and preferences changing and evolving?

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:

  • Relevant, comprehensive content. The Drudge Report has information about everything I want to know about: political stories, entertainment, business, science, and sports, be it local, national, or international.
  • Different perspectives. For important stories, the Drudge Report provides multiple links to others covering the story, often from different perspectives and angles. This feature is useful because readers can get a full view on a topic.
  • Discovery. It presents me with stories that interest me and that I should know about, even though I wasn’t searching for the content — and didn’t know I needed to know about it.
  • Up-to-date information. The site is updated 24/7 with the most current news.
  • Breaking news. It breaks news. You’ll find stories there first.
  • Stories that are overlooked by others. Not only will the Drudge Report break news, it will cover stories that mainstream media won’t.
  • Practical, interesting content that’s great for cocktail parties. The breadth of content the site provides meets many personal and professional needs. In addition, if I want to have some great discussion topics for a cocktail or dinner party, the Drudge Report is sure to give me a bunch of interesting stories to choose from.
  • Confidence. Because of everything above, the site makes me feel informed and confident that I’m on top of key topics. Plus it’s dependable, always the go-to source.

So as you proceed with your digital initiatives, keep the 12 Cs in mind.

Lee Huang

P.S. This column wraps up my contributions to ClickZ’s Online Publishing column…at least for now. I’ve really enjoyed this experiencing and hope you’ve found it informative. I appreciate all the great e-mail you’ve sent to me.

Join us for a ClickZ Webinar: Transparent CPL Advertising: The Biggest Missed Opportunity in Your Online Strategy on October 15.

Subscribe to get your daily business insights


US Mobile Streaming Behavior
Whitepaper | Mobile

US Mobile Streaming Behavior


US Mobile Streaming Behavior

Streaming has become a staple of US media-viewing habits. Streaming video, however, still comes with a variety of pesky frustrations that viewers are ...

View resource
Winning the Data Game: Digital Analytics Tactics for Media Groups
Whitepaper | Analyzing Customer Data

Winning the Data Game: Digital Analytics Tactics for Media Groups


Winning the Data Game: Digital Analytics Tactics f...

Data is the lifeblood of so many companies today. You need more of it, all of which at higher quality, and all the meanwhile being compliant with data...

View resource
Learning to win the talent war: how digital marketing can develop its people
Whitepaper | Digital Marketing

Learning to win the talent war: how digital marketing can develop its peopl...


Learning to win the talent war: how digital market...

This report documents the findings of a Fireside chat held by ClickZ in the first quarter of 2022. It provides expert insight on how companies can ret...

View resource
Engagement To Empowerment - Winning in Today's Experience Economy
Report | Digital Transformation

Engagement To Empowerment - Winning in Today's Experience Economy


Engagement To Empowerment - Winning in Today's Exp...

Customers decide fast, influenced by only 2.5 touchpoints – globally! Make sure your brand shines in those critical moments. Read More...

View resource