Knowing your customers and their preferences is the easiest way to retain customers.

Why know your customers? Initially, the seller-buyer relationship was tilted in favor of the seller. This was because there was less competition and buyers had less choice. However, the last two decades have seen a consistent shift in power. With technological advancement and easy availability of information, the buyer now has an advantage. If your business doesn’t provide what is required, a competitor is just around the corner to seize the opportunity.

Today’s customers have become more demanding and expect innovative solutions. Simply meeting customer needs is not enough. The goal is to exceed your expectations so they will come back to do more business with you. Studies have shown that around 80% of a company’s business comes from its existing customers. In such a scenario, customer retention assumes greater importance. To retain customers and ensure they don’t pass on to your competitors, it is essential to understand the customer and customize your product/service offering to meet their interests and needs.

How to get to know your customers better? Businesses today no longer function like corner stores where there is face-to-face customer interaction every day. Today, customers may be interacting with the business without the business knowing. A customer visit to the company’s website is an example of one such interaction. The key is to capture those interactions, understand customers and predict their future behavior based on these interactions, and use that to anticipate customer needs before they arise. In this way, the company will take a customer-centric approach to its offering. Knowing your customers will also help your business make smart decisions that improve the customer experience. Every decision that is made can be seen from the customer’s point of view. However, for this ideal customer-centric approach to become a reality, it is also essential that the commitment to customer focus be top-down. Only when the CEO and the Board are committed to customer relations will the other employees buy into the concept. Until your business takes a proactive approach to customer satisfaction, this won’t be easy.

What are the benefits of knowing your customers? Knowing your customers better can help you drive sales, because once you know what might be of potential interest to customers, you can cross-sell or increase relevant product/service offerings. Additionally, you can save considerably on customer acquisition/retention costs, as your marketing efforts will now be more focused and yield better results. Improved customer satisfaction and loyalty are some other benefits that will emerge.

What are the basic requirements in this process? To know and understand your customers, your business needs to take an integrated approach to the entire process. All functions must be well coordinated, especially marketing and sales. Your marketing strategies need to be highly personalized and run primarily on customer activities that arise as part of customer interaction. Information collected from customers must be stored in such a way that it can be retrieved in a timely manner and makes sense to all who would use it. Good marketing automation software that has analytics functionality can help you with this. Without proper coordination between marketing and sales, the efforts made by the company to know its customers can fail.

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