It may sound cliché but whatever business you’re in, knowing your customers is vital for business success. And it goes without saying that the better you understand them, the more successful you will be. In the era of modern commerce, this is even truer. You may not know them, or see them, but they’re very visible through clicks and taps. Whenever your e-commerce portal has a click, it means a customer has arrived.
However, unlike brick-and-mortar, they can be out of your store quickly, within a few seconds. You’ve extremely limited time to impress them, and, therefore, knowing your customer’s needs, knowing their behavior, interests, and needs become critical. By understanding their buying behavior, it is possible to provide them with the products and services that appeal to them. you can create products and services that fit them and ultimately make more sales.
Understanding Your Customers: Challenges
Understanding customers is easier said than done in the e-commerce environment. The problem is even more confounding as most e-commerce sellers have more than one platform.
First, customer segments become literally diverse for the simple reason as each channel has its own flavor and it attracts a niche audience. So, with the rise of channels, customers have become increasingly diverse, with varying preferences, behaviors, and expectations. This multi-channel landscape makes it difficult to track and monitor customer data from different touchpoints, leading to fragmented insights.
Secondly, can you frequently switch between channels during their buying journey, and understand their behavior? Moreover, the sheer volume of customer data generated across multiple channels can be overwhelming.
Importance of Knowing Your Customer
The better you knowing your customer; the easier it will be for you to cater to their unique needs. While this may seem like common sense, it’s not as straightforward as it appears.
Customers have a natural tendency to gravitate toward businesses they know and trust. And you cannot build trust and loyalty overnight. If you are knowing your customer better, your approach is always customer-centric, which helps you earn loyalty in the long run.
4 Benefits of knowing your customers
Below are the four benefits of understanding customers:
Firstly, knowing your customers helps you better identify their desires and needs, enabling you to offer products and services that perfectly meet their expectations. Furthermore, you can better align your product offerings with customer expectations and build a strong reputation in their eyes, which earns their loyalty and generates positive word-of-mouth recommendations, contributing to long-term business success.
Secondly, it all boils down to creating an excellent customer experience. By tapping into their personas, you can use them as a valuable tool to optimize your product offerings, improve customer services, optimize stock management, and address their pain points proactively, taking their overall shopping experiences to the next level.
Thirdly, as most e-commerce sellers have multiple platforms, you can optimize the specific channel when you know them better. It enables you to engage with them better and maximize your reach. Additionally, you can allocate your time and money more efficiently.
For example: suppose you observe that younger customers are more active on social media platforms, while mid-age customers prefer email communications. This simple insight allows you to tailor your messages, content, and promotion to maximize your reach and engage with them better.
Moreover, you can make more informed decisions regarding resource allocation. Instead of spreading your efforts thinly across all available channels, you can concentrate on the channels that yield the best results for reaching and engaging your target audience.
Lastly, having an in-depth understanding of your customers provides a competitive edge as it allows you to differentiate your offerings, develop unique value propositions, and position your brand effectively in the market. Your products stand out in the crowd as you provide them with a compelling reason to buy your product.
How to Know Your Customer
Now, the question arises of how to know customers when they are invisible. Unlike brick-and-mortar stores, you can only view their digital footprints (or data). You can understand their behavior and preferences by analyzing data from various channels, such as websites, apps, and social media.
However, most e-commerce sellers have multiple e-commerce platforms where the biggest challenge in understanding customers’ pain points is the lack of a single point of truth like what they’re ordering, what they like, etc. Using a multichannel software system, you can quickly discover valuable customer insights like order frequency, order value, the performance of each channel, and product preferences. Examining these useful metrics can help you identify loyal customers, understand their preferred product categories, and tailor your marketing efforts accordingly. More importantly, these insights will help you know what’s selling (or not), and more importantly, it will keep you one step ahead of the competition.
One of the most crucial things to understand in e-commerce nowadays is to know what customers care about the most, what are their pain points, and improving their overall customer experience during the buying journey.