1. Customers Often Understand A Buyer’s Needs Better than Your Company
This is one of the most hotly debated topics involving customers: are customers a reliable source of ideas, or do they not know what they want? Steve Jobs gave some insight on why customers sometimes make terrible focus groups:
It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.
So, does the average Joe really know what the buyer wants? According to research from the Institute of Management Sciences, customers do play an integral role in many successful innovations.
The results of additional research from MIT’s Eric von Hippel shows us the following:
- In a study of 1,193 commercially successful innovations across nine industries, 737 (60%) came from customers
- User-created innovations have been successfully utilized to turn around “innovative slump periods”
Consider the example of 3M.
3M’s Medical-Surgical Markets Division was desperately looking for projects to kickstart it’s continually poor innovation record in the 90’s. Instead of going with the standard internal innovation process, a separate team was formed to search for breakthrough innovations being created by outside “lead users.” When the individual results (internal vs. lead user generated) were compared side-by-side in terms of revenue generated, the differences were quite drastic:
- User-lead innovations had an average revenue of $146 million dollars (in 5 years)
- Internally generated innovations had an average revenue of $18 million (for the same time-span)
The results were clear: Customers were coming up with the winning ideas more often than not.
2. Customers Are More Credible Than You
You’re an established, well respected business (or a startup just starting to get recognition). You’ve been featured in big publications, given interviews and everything in between to get good press about your offering. Yet, when it comes to influencing customers, you still won’t have a powerful sway as a convincing Amazon.com review will. That is to say, real customers can often be better champions of your product’s benefits (and convince people more thoroughly) than any advertising campaign.
Let’s take a look at how an online book rental company, known as Chegg, put this into effect. Chegg allows college students to rent textbooks online and then return them at the end of the semester (or another period of time). I know this because I actually used Chegg during my years as an undergrad! What I didn’t know was that Chegg has since successfully implemented a customer rewards program that helps college students refer others to the service if they were happy with their first order.
This “ambassador” program is called the Chegg Champions network, and it offers it’s members (paying Chegg customers) access to:
A series of marketing tools and online educational opportunities to [help them] extend their passion for Chegg.com throughout their circle of influence.
Essentially, if you love the service that Chegg provides (I certainly did back when I used it), you can become a brand ambassador for Chegg and earn rewards for continued purchases, and more importantly, letting other people know about Chegg. Chegg calls out top performers on their blog and constantly updates the resource section so that these ‘champion’ customers have a useful hub in which they can come up with new ideas to promote Chegg and earn prizes (this includes things like account-specific coupons, pre-made posters, referral links and many more items).
The result is that Chegg is the #1 online book rental company as of this writing, and tapping into an enthusiastic customer base has certainly played a vital role in their success.
3. Customers Know More About Each Other Than You Do
If you’ve ever wondered about the stratospheric valuation that many recent tech startups have received, here is your answer. Customer data is essential to understanding your target market, and yet, customers seem to know much more about each other than you do. Is it any wonder why so many folks have taken an interest in Facebook: users are manually submitting real time data on what they are doing, things they enjoy, things they don’t enjoy, where they are going, products they are using, and nearly everything else imaginable.
An example that Bill Lee has cited before shows how an already successful firm used aggregate data to build another business entirely:
Westlaw, which provides legal research services for law firms, realized that its clients were interested in how they and the markets they serviced stacked up to other firms and markets. So Westlaw created West PeerMonitor, which aggregates anonymized data on firms’ financial and operational performance, collected from participating clients. It turned into a lucrative new business.
Many smart companies are realizing this fact and giving away the kitchen sink in order to get customers to fill out survey data, often with questions geared toward the customer’s understanding of their peers.
4. Customers Are More Persuasive Than You
Due to the fact that prospective customers trust real buyers more than your marketing department, you also need to realize that customers can be more persuasive than you when it comes to courting new customers. In the online world, this is the reason affiliate programs are so popular. Take the affiliate program for offerings such as the Genesis Theme Framework (for WordPress) by StudioPress.
It can be tough to educate new web publishers to the benefits of running WordPress, and specifically, running a theme framework like Genesis. Fortunately for StudioPress, they offer an affiliate program to let a few of their most influential clients do the talking.
Folks with large followings like Jay Baer, Chris Brogan and Darren Rowse regularly promote the Genesis Framework, and it’s easy to feel persuaded by their points on why Genesis offers a superior value: they are actual customers who operate their businesses on the framework!
I’ve spoken with Brian Gardner (founder of StudioPress) before, and he’s stated that the partnering with Copyblogger and the connections made with these key affiliates was an essential turning point in helping StudioPress double it’s sales.
Nothing convinces prospective customers quite like satisfied past customers: is your brand utilizing them to your advantage?
5. Customers Make Better Brand Associates for Community Building than You
Many companies often struggle with creating communities or opportunities that customers would like to associate with. The main mistake that they find themselves making is that they assume customers are willing to embrace associating with thecompany, when in reality they want to associate with their peers, which means they look towards your customer, not you.
Proctor & Gamble quickly realized this with their botched (and later saved) effort to create an online community in BeingGirl. BeingGirl was initially formed to help promote feminine hygiene products to young women because market research found that the TV and print ads were making this younger audience uncomfortable. P&G’s initial effort with BeingGirl was to hire experts to create content for the community to embrace.
Later, when P&G restructured the site as more of a “forum community” where young girls could connect with each other rather than with paid brand advocates, the site fared much better (although it still faced some criticism).
The turn-around had an obvious causation though: customers are often more apt to trust and be interested in information if it comes from a peer, rather than a company.
Over To You
Thanks for making it to the bottom of this article! 🙂
Since you’re here, I’ve got 3 requests:
- Let me know in the comments what else you think customers can do better than businesses.
- Which of these was most surprising to you? Are there any that you reallyagree (or disagree) with?
- As a reward for making it all the way down here, why not get even more customer service “secrets” with our 75 Customer Service Facts, Quotes & Statistic E-Book, which you can download instantly. 🙂
Thanks for reading, and I’ll see you in the comments!