Understanding Customer Profiles

In the world of startups, a common knee-jerk reaction to declining sales is to offer discounts. Having spent over a decade in marketing, I have seen this approach repeatedly. However, the reality is that discounts are not a panacea for boosting business performance. While they may provide temporary relief, over-reliance on them often highlights a more significant issue. It’s akin to a puzzle missing a piece—the critical connection between your product and your target audience. When this connection is absent, it indicates that your business lacks relevance to your customers because you haven’t truly understood their needs.

This issue became evident during my tenure at a ride-sharing company. The Challenge

We experienced success in Germany, but our expansion efforts in Paris fell short. Although there was a demand for scooters in Paris, our substantial investment in email marketing yielded little growth, as our customer base remained limited. We were offering discounts without a clear understanding of what our customers truly wanted.

This called for a deep dive into customer profiling. Donning my consumer psychologist hat, I set out to uncover our customers' needs.

The Approach

Customer profiling is essential for understanding customer expectations and needs, forming the foundation of your marketing strategy. To achieve dependable insights, it’s vital to combine online surveys with interviews for the best outcomes.

Online Survey

To begin, we designed a concise online survey using Survey Monkey, targeting engaged Parisian users. The survey aimed to validate our assumptions with questions such as:

• How frequently do you utilize our service?
• When do you typically use our service?
• What factors lead you to choose our service over competitors?

The findings revealed a stark contrast between our assumptions and the actual behavior of our users. Most customers utilized our service a few times a week rather than daily. They preferred using it for social outings and special occasions, valuing the sense of freedom and fixed pricing for half an hour.

To gain further insights, we turned to interviews.

Interviews

We sought to understand why customers opted for our service occasionally and their perception of fixed pricing. We conducted interviews with thirty respondents from our survey, incentivizing them with a $10 gift for their participation. Our goal was to create a comfortable atmosphere, making the interview feel more like a conversation than an interrogation.

Our interview structure included:

Section 1 - Introduction

A brief self-introduction and the purpose of the discussion, followed by a customer introduction detailing age and occupation.

Why? Casual dialogue often encourages participants to share more.

Section 2 - Usage Patterns

Frequency of service usage, occasions for use, and desired features for increased usage.

Why? Content that resonates with customers’ experiences drives revenue.

Section 3 - Needs & Motivations

Emotional responses while using the service and reasons for choosing our service over others.

Why? Understanding customer sentiment is crucial for fostering loyalty.

Section 4 - Pricing Perception

Thoughts on fixed pricing versus minute-based pricing and willingness to pay more.

Why? Customer insights on pricing help your business stand out.

After the interviews, we summarized our findings. Here’s a sample summary:

"This individual is a young tech professional who primarily uses our service on weekends for special events. They appreciate the stylish design of our scooters and enjoy the convenience of fixed pricing, as it eliminates the need to track time."

We then created a word cloud from these summaries to identify common themes, which took about a month to finalize.

The common reasons customers choose us included:

• Stylish scooter design
• Feeling special and trendy
• Attractive flat pricing for thirty minutes

With these insights, we constructed a comprehensive customer profile:

• Young professionals aged 25–40
• Seeking hassle-free, stylish transportation
• Tech-savvy individuals who value aesthetics and convenience

Implementing Customer Insights

Based on the customer profile, we revamped our newsletters to emphasize themes of "feeling unique, special, and liberated," and made our straightforward pricing a focal point, featuring tech-savvy individuals in our content.

The Results

What was the outcome of this renewed communication strategy? Our newsletter conversion rates tripled, and customers who opened our emails were three times more likely to take a ride. Most remarkably, we saw a doubling of our revenue in a typically stagnant market.

Key Takeaways

• Always question your assumptions about your customers. Engage directly with them to create accurate customer profiles.
• Utilize both surveys and interviews to gather reliable insights.
• Start with a survey to establish a framework, then delve deeper with interviews.
• Analyze interview results meticulously and synthesize common themes.
• Adjust your messaging to align with your customer profiles across all communication channels.

Building customer profiles can significantly enhance your business's growth potential. Begin developing your customer profiles today to achieve new heights in your business.

Are you ready to elevate your growth strategy? Interested in discussing effective marketing tactics? Connect with me on my Substack page or reach out via LinkedIn.

The first video explains how to increase your revenue using effective sales tools and strategies.

The second video offers insights on how to double your business within a year through strategic planning and execution.