Executives indicate that 7 out of 10 of their organizations are speaking to less than 10 prospects or customers per month and note this doesn’t get better with a company’s size.
At the core of your business is the Customer, and if you don’t know who your customers are or what your customers expect from you, you are in a state of ignorance. To be able to grow and scale your business, you need to understand your customers and their needs and expectations.
This goal can be achieved by – Customer Research.
Consumer research can be done in many ways – be it daily note taking done by your teams like sales & call support or it could be a more structured method like data collection.
Finding out effective consumer research methods for your business could involve trial and error, but identifying the best methods for your business is worth it.
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What is customer research?
Customer Research is quite simply getting to know who your ideal customer is and who isn’t. And you can know this by studying your targeted customer’s – preferences, attitudes, motivations, and buying behaviour.
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This information will then be grouped together on the basis of shared traits among different customers and that will shape the customer segments and the buyer personas. These two concepts will help you understand how different groups of customers make decisions and the opportunities that lie ahead in terms of business growth.
Why does it matter?
Customer research can’t be ignored, in order to build the right valuable features and avoid building the wrong product.
A recent study by CoSchedule, where a total of 3,217 marketers participated, with a majority of them being in B2B, revealed that –
- Successful marketers were 242% more likely to report conducting audience research at least once per quarter.
- And 56% of our study’s most elite marketers conduct research once or more per month.
Another report by ProfitWellbrought out the gap between the companies and customers by surveying just over 2,500 product leaders
This is how things look from the company’s point of view – what they think they are building
This is from the customer’s point of view – what they think they are buying
If this isn’t enough to convince you about the importance of Customer research, then there’s more –
- Marketers who conduct audience research are 466% more successful than those who don’t.
- 65% of marketers rarely do audience research
- Teams that engage in audience research tend to grow by 2-3 times faster than companies who don’t. Given that 70% of SaS companies don’t interview customers (one of the methods of customer research) regularly.
Now that I’ve (hopefully) convinced you to invest in customer research, I won’t leave you at that, Let’s discuss some ways you can do customer research and better understand your audience.
The Guide for Customer Research in B2B SaaS
A Strong base to Build Upon
Before we get started with the exciting part of the research we first have to revamp our basics.
What I mean by that is that we have to work on the buyer persona and the ideal customer profile, since this is what our whole segmentation depends on, all the steps forward will be successful only if these personas and profiles are accurate.
This is what a B2B buyer persona looks like –
A Buyer persona is usually created by taking in following into consideration
- Demographics: age, gender, city, country, career, problems, needs, pain points, desired, past experiences, etc.
- Behaviours: What content they like to consume? What are their daily routines, hobbies?
- Sources: define how your potential lead can find you, what are the places he’s gathering on the internet (or in real life), how can you reach out to him?
The personas are not just the blend of the data you’ve collected, it comes down to how you put that data to use, buyer personas are often pulled out of thin air as a result of an internal brainstorming session. This can sometimes leave the observations useless, its important to be careful about certain things –
For example, B2B buyer personas typically assume that people with the same title (e.g. CEOs) are a homogenous mass, with the same motives and pain points —regardless of the context (e.g. a mature Fortune 500 company or a fresh hi-tech startup with novel technology).
Persons also only focus on ‘buyers’ and not users, that especially is crucial in the SaaS industry.
How to create a better person?
As Anna Holopainen mentioned in one of the articles I read a while back, you can use different alternatives or rather combine them to come up with a hybrid that’ll give the most accurate and helpful persona.
The basic idea with JTBD is to “create” something that “gets the job done” for someone.
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With this approach you can’t just use the traditional persona as those focus on the general motivations that are assumed (somewhat) like the example shown above, the persona assumed the same pain points and motivations for both the CEO’s but the reality is that they don’t have the same pain points and motivations since their respective companies differ when it comes to how old the companies are.
Anna,lists out a few things to keep in mind when doing the research:
- Complicated products and highly customizable services tend to have many (possible) jobs. Think ERP!
- The same product can have different jobs for different people (even single-feature products). Think Google Sheets!
- A customer’s job can/will change within time: a CRM is first used for organizing data, then for improving processes, and finally for scaling ops.
- Most B2B buying processes include many people with several different, often conflicting jobs (optimizing for cost efficiency or good usability vs minimizing risks, and so on).
Ideal Customer Profile
Your ideal customer profile is a strategic tool to align your sales and marketing teams with a common definition that’s grounded in data.
The goal here is to understand who your ideal customers are and then only interview people who are similar to them, like from their company. See who are the people who understand your product and the benefits it provides, the people who are easy to sell to, profitable and will recommend your product/services to others.
Now, with the JTBD approach we were following the segmentation won’t be on the bases of the demographics instead it will be based on the work they are trying to get done through your product/service.
You can define the ICP in these 2 ways:
- Data-Based Profile
This is based on the real customer data you have, the fastest growing or the most profitable, studying – customer lifetime value, account growth rate, and customer acquisition cost. Reverse engineer the ICP from there.
- Characteristics-Based Profile
If you don’t have enough data, could be because you are building a new service/product or entering a new market. You could base the ICP on characteristics.
Another way you can create an ICP is by calling the various departments together for a brainstorming session, something like a workshop.
Different Methods of Customer Research
Interviews are a trade-off between eye-opening research and time. 1 to 1 interview with customers who are going through different stages of using your product can be extremely time consuming, there’s no doubt about that but the same time-consuming process can just be the feedback you were looking for.
This method Costs nothing (except your time) to execute, you should go ahead with this if you want to:
- Discover specific buying triggers
- Identify new marketing channels or tactics to try
- Use your customer’s buying journey to map your growth plan
- Use your customer’s own words to write high-converting sales copy
Interviews provide high value as here you are face to face and can ask any questions to know their very specific details on their needs, wants, and motivations as they relate to your product. The only problem here is, that the information you have will stay relevant for another 1-year minimum and after that, you’ll have to conduct another set of interviews. For some companies, this might not be possible.
Sales & Customer Success Calls
All the other methods mentioned in the list are steps you’ll have to go out there and take but this one method is within your reach, right in your office.
Conduct a few sales/customer success calls and see for yourself, or go with the normal and let the experts do their job and then extract the insights they got. This way you can gather information about the pains and desires of the customer. You’ll also get to know their objections and feedback absolutely unfiltered.
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This is the next best option if you can’t conduct 1 to 1 interview as it’s cheaper. Apart from helping you in the future, the sales and customer success people listening to the feedback can further use the comments to improve/modify their pitch.
Surveys are probably the most used method, maybe because it’s the easiest way to gather information from the customers.
The trade-off here is – the amount of insight/information to participation. Here the surveyor can’t ask detailed big questions as it’ll most likely distract the customer who’s filling the survey but since it’s easy to fill most people won’t mind taking out 5 mins which mean increased participation.
The types of Surveys are:
– On-site polls
Here you use a third-party app to ask website visitors some questions. You should use this when you want to ask very specific questions from the customers that visit your website.
This is a very good way to know who visits your website, what your potential customers are like. Here you can ask: What Brought them to the website?, What best describes them? Etc.
It’s easy and inexpensive to you with numerous tools you could choose from.
– Customer Surveys
This is probably the most common and (in my opinion) the most useful among all these types of surveys, here you ask your existing customers a series of questions to learn as much as you can from them. Cam be one through email, mobile chat, in person, etc.
This way you get answers to again, very specific questions which can confirm a few assumptions you might have about the customer base in general. The art is to ask the right amount of questions and also the right way. You don’t want misleading answers.
– Third-Party Surveys
Here you use a third-party marketing research company to survey the people who come in your target segment. The advantages are the same as with Customer Survey but there’s an advantage of larger sample size if you don’t have as many customers yet you can go ahead with Third-Party surveys. You also have the advantage of skilled people creating your survey questions and so you can relax with the quality of the survey.
– User testing
Here you have hypothetical users trying out your product so that you can extract insights from them and improve the product.
It’s very effective in understanding the reaction the customers might have had on coming across your product and avoiding any negative reaction before actually receiving it from the actual customer. User testing is especially critical for SaaS products
Moving away from the customers for a second, analytics focuses on what the customer actually does instead of what the customers ‘say’ they want or need.
This comes handy when your customers don’t exactly know what they want, here you can research and find what they do.
Here are the different ways you can use Analytics:
– Google Analytics
Google Analytics is an online analytics tool offered by Google that allows you to track your web traffic and create reports based on the metrics you want to measure, like bounce rate, time on page, traffic.
Use this method if you want to see who visits your website and what actions they take on it, A/B test elements on your website/assets that send traffic to your website and better understand how people find your website (including referring sites).
You can also use this to find loopholes in your funnel and understand how your website is performing.
You must have heard about Heat Maps, these are visual tools that show you how visitors interact with your website.
This is typically used to understand where your visitors are looking when they come to your website. Heat maps use a warm-to-cool colour spectrum to show you things like, where people click, how far down the page they scroll, where/in what directions they move their mouse, etc.
This way you won’t have to engage with your customers, especially helpful if you are building your product and don’t have any or very few customers. Sometimes even if you do have enough customers this method is the best you can do since the other channels or tactics can’t be used with your existing customers.
SOme marketers also use it to identify new opportunities in the markets or to find out new content ideas.
Here you analyse your direct competitors channels, like, content marketing, social media or customer reviews.
You can go deeper in research by booking a demo of their product or by getting a free trial etc.
The purpose is to understand the competitors in and out.
Some review based websites you can check out:
- G2 Crowd
- Trust Radius
- Software Suggest
Some forums you can check out:
- Product Hunt
- Indie Hackers
- Hacker News
There a ton of ways you can do customer research, you can read about a few more here. All these steps have their own pros and cons. Their own unique areas are the most effective.
Some are costly but the most insightful and some are cheap but with huge participation. What to trade for what is your decision, will depend on what aligns with the stage your company is at and what kind of data you want.
But before deciding on the methods you should really understand why customer research is important in the first place. I see many people share articles about customer research but in reality rarely give importance to this concept within their own company.
Once you understand the importance of Customer Research you’ll automatically start experimenting with the given ways not just for the sake of doing it but because it helped you get more customers, because it made your marketing efforts fruitful.
Don’t be among the 65% marketers who do customer research ‘Rarely’. Come up with methods of your own, combine them and create a perfect blend that suits your company and goals.