Business experts can offer outside perspectives on ways you can improve your business. THE Shopify Masters the podcast featured several of these experts in 2023, from venture capitalist has marketers has a city economist.
And there’s one thing they all agree on: you can never know enough about your customers. It’s incredibly important to continue to deepen your relationship with your customers, whether through community building and marketing or leveraging data and artificial intelligence.
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5 tips to better understand your customers
Four experts share their tips for growing your business by learning more about your customers.
1. Start with a hypothesis
Many entrepreneurs look directly at back-end reports to learn more about their customers, but there’s often so much data that it’s easy to feel overwhelmed.
Neil Hoyne, the chief data and measurement strategist at Google, recommends that you start with a hypothesis before writing a report. “We start by asking what you think you need to do differently and where you think there is an opportunity,” says Neil. “And then all these reports support that, not the other way around.”
Determine which metrics are important to your business goals before turning to reporting. For example, if you are trying to increase your revenue, imagine how you could increase the average order value.
2. Understand how people make decisions
Maryam Haghihi is the Director of Data Science at the Bank of Canada. She advises founders to learn about behavioral economics and psychology. “Understanding how humans make decisions has a direct impact on your business,” says Maryam.
Humans are not always rational beings when it comes to consumption. They like stories. Make them care about your product and give them the opportunity to be the main character. “Sometimes their decisions aren’t based on data at all,” says Neil. “They may pay more for these products or features [you] I didn’t think it was important.
3. Focus on finding acquisition channels
Ashwinn Krishnaswamy, founder of growth and design agency Forge, says having good branding or design isn’t enough to make a successful direct-to-consumer business. To stand out, you’ll need to know where your customers are and how best to reach them.
“One of the things that not many founders think about early on is distribution and customer acquisition,” says Ashwinn. “That’s the real success or failure of the business.” He encourages early-stage startup founders to experiment with both paid advertising and organic content to see what works best for them.
4. Own your niche
Once you find out who your customers are, don’t be afraid to market directly to them and double your receptive base. “If you think you’re too specialized, I’ll say you’re not specialized enough. You didn’t go any further,” Ashwinn said.
Jason Feifferthe editor-in-chief of Entrepreneur magazine, recalls a company that made compression socks for athletes. However, most of the brand’s customers were not athletes but workers who spent all day on their feet. Once the company was able to change its marketing strategy and product mix, it unlocked much greater growth.
5. Present stories that appeal to audiences
As a magazine editor, Jason receives many requests to cover certain companies or founders. “We must understand that the media are not a service provider. People who work in a media organization don’t see themselves as being there to support you,” says Jason.
To get more media coverage, understand the publisher’s audience the same way you know your own customers. After all, readers, viewers or listeners are the publisher’s customers. If you want to work with a media outlet, present stories that demonstrate value to the media company’s customers. It might even help you gain more customers.
To hear more advice from some of the experts interviewed on the Shopify Masters podcast, listen our recap episode.