13. Understanding Customers
E-commerce is an industry which revolves around people. Those people are online users, and they are often referred to as customers. They can be both previous and future customers, as well as those who are only interested in your brand. However, to make sense of the approach and to fully understand the relationship with the online users and how that relationship can help in growing your e-commerce business, it is best to segment the online users into several groups of customers.
Types of customers
Being aware of the different customers you will encounter, helps you with defining your goals and actions in a way to get the most out of the relationship and keep growing the customer base. Different customers require a different tactic or an approach. Understanding customers and their needs help you optimize and provide a better experience for them, which, in the long run, has tremendous benefits for your online business, starting from word-of-mouth marketing, to recurring sales.
Target group represents the group of people you plan on reaching with online promotion of your business. Those are the online users who are potentially interested in your business due to some reason, such as the fact that they are within a particular age group, that they are male or female, or even based on the fact that they have searched for a related topic recently. When you first start setting up your business and plan promotional activities, considering the target group is helpful because it allows you to:
- Create highly targeted campaigns which perform better
- Design your website (product and/or service) in a way that it appeals to the target group
- Shape your entire business strategy with those users in mind
- Anticipate the need the online users will have and provide a solution (answer or help).
When it comes to defining the types of consumers, the target group is the largest group.
Unlike the target group, the potential customers are within a smaller group which includes people interested in your brand. Potential customers are members of the target group who are more likely to become your customers due to a particular action such as:
- Visiting your website
- Signing up for the newsletter
- Placing the products in the cart
- Sharing your site link on social media
- Sending an inquiry through your website form
- Commenting on your website/blog content
- Following you on social media
- Interacting with your brand on social media (liking, commenting, sharing, etc.)
In general, potential customers show greater interest in your brand. For you as a business, this means an opportunity. It is an opportunity to start the interaction and establish a certain relationship with the potential customers with one goal in mind – turning these potential customers your first-time customers.
When someone buys from you for the first time, that person becomes your first-time customer. Once you recognize a potential customer, your goal is to complete a set of actions that will help you convert that visitor. To improve the chances of achieving this goal, you could use options such as lead nurturing, interaction with the customers through social media, etc. Offering special discounts or free trials for the first-time customers is also proven to be quite useful.
Processing the sale does not mean that the process is over. Keeping the customers loyal to your brand demands as much work as gaining the new ones. In fact, it is generally known that it can be more cost-effective to keep the existing customers than to organize activities that will enable you to attract new ones who have not had prior contact with your brand.
Finally, great experience through exploring your products and completing the purchase is what will leave a positive impact on the first-time customer and eventually help you turn a first-time customer into a recurring customer.
A recurring customer is a customer that has completed several purchases. When we consider the whole customer group, this one is the smallest. It includes a portion of the first-time customers, because not all of them will go back and buy from you again. The obstacles that might reduce the chances of gaining recurring customers include:
- Poor website performance
- Low-quality product
- Not meeting customers’ expectations (regarding quality, size, durability, functionality, etc.)
- Negative experience with customer service
- No efforts in engaging and keeping the customers loyal
Maintaining good customer relationship, apart from providing quality product or service, is a crucial factor for gaining recurring customers. The most commonly used channel of communication for this purpose is an email campaign. These types of campaigns provide great targeting options, customization, and personalization which create a much deeper bond with the customers, and thus yield great results. When it comes to email campaign ideas to engage previous customers, those include:
- Discounts for recurring customers or a certain renewal period
- Promo email for the product the customer has already purchased
- Product suggestion email based on the previous purchase
- Free shipping with a minimum purchase value
There are many more options you could consider here, which are all the topics you will focus on when you explore email marketing in more details and how this section of online marketing helps with promoting your business and generating sales.
The main reason why gaining recurring customers is often considered easier than acquiring new ones is the fact that you already have established the connection. You already have the customer’s email address which enables you to initiate the next phase. On the other hand, with gaining new customers, you have to use different methods to reach your target group, which often includes a set of actions and efforts from your end to promote your business in the online world. Frequently, these methods will require payment, such as the case with search engine ads, social media promoted posts, etc.
This term is often used in e-commerce, and it represents your ideal customer. Determining a buyer persona helps you with marketing, sales, product development, tailoring content, etc. Ultimately, this has a significant influence on your business and strategy you will use.
The representation of an ideal customer helps you get a deeper understanding of the persons you want to attract. The best way to shape your buyer persona is to analyze your insights. The information which can help you divide and categorize customers include:
Try to analyze each of these areas and find as many details as you can about your customers. Collect all the details and try to detect the characteristics of a buyer persona, i.e. characteristics of those online users who are most likely to become your customer. These can include people within the age group, people who visit your blog, etc. Understanding a buyer persona helps to:
- Relate with customers
- Recognize their needs
- Organize your campaigns
- Improve your approach
- Create an effective online strategy
Opposite to a buyer persona, there is a negative persona. These are the customers you do not want. When you analyze the customers to identify the buyer person, you will also find out which type of customers you do not want, i.e. customers who are unlikely to buy from you. Either the product is too advanced for them, or they are a type of person who would not benefit from such product. Learning about the negative persona can help you narrow down the group of potential customers and focus only on real buyer persona.
Person’s emotions and attitudes about buying and using a certain product or service are feelings collectively known as user experience (commonly abbreviated as UX). User experience includes all the emotions that start as a part of the initial interaction of the person with the brand and last until the purchase is complete. In fact, they go beyond the completed purchase, as the attitudes linger in customer’s mind much later than that. These attitudes also affect the following purchases or the recommendations the customer is likely to share with other online users.
For a business, it is helpful to understand the user experience, as this gives opportunities for improvement and development. It is also a chance to identify pitfalls that might be preventing your business from going ahead.
Explore the user experience through these methods:
- Website user experience – Analyze session duration, page views, bounce rate, etc. to see if your website is user-friendly.
- Feedback from potential customers – Try to obtain feedback from potential customers to see what might be stopping them from completing the purchase, if they have any doubts, etc.
- Feedback from customers – Customers can share their impressions about the buying process and what triggered them to complete the purchase.
- Rating – While feedback demands more work to come up with, a rating is a quicker way for customers to tell you about the user experience. They can rate products, buying process, customer service, etc.
Understanding the buying process
To help you optimize user experience and improve the overall success of your business, you need to understand the buying process.
What is the first thing potential customers will notice?
They say that the first impression is the most lasting. You should have this in mind when you design your website, your promotional campaigns and in general when presenting your brand on the online market. Think about how the online visitors would feel:
- What will they see?
- What will intrigue them?
- Will there be enough information?
- Will they need to learn more?
- Does the landing page (or product page, or promotion page) fit the company image?
These are only some of the questions you can analyze to figure out the impression you leave. You could always conduct a survey to find out more details.
Who are your customers?
Knowing more about your customers helps with understanding your buyer persona, user experience and ultimately with understanding the entire buying process. The goal of all this is to make necessary adjustments and improvements to make your strategy even better.
Why do they buy from you?
Try to determine why do people buy from you. Or why they do not. This means that you should check out the website analytics and explore user behavior and spot any patterns. For example, you might have a landing page with a video which is converting more visitors than any other page on your website. So the reason for the conversions is on this page. You might also notice a large abandoned cart rate on the checkout page. This would mean that there is something that is driving them off, such as unexpected shipping costs or long delivery time. The answer to improving your strategy is to fix these issues you were able to identify as the reasons why the customers are not buying from you.
How do they buy?
Learning how people buy from you is also helpful in understanding the process. There are several aspects to consider here:
- Payment method the customers like to use as their preferred method
- The time needed for them to make a decision to buy, which can be immediately, or after some thinking
- Redeeming an offer is another way to buy from you, which is an excellent method for encouraging purchase, especially if the offer is time-sensitive
The ultimate goal is to find out more about the customers to improve your business. Your business revolves around the customers and your relationship with them. Learning more about them and how they behave, what affects their buying habits and how they go through the buying process is priceless information for a business looking for opportunities to grow its reach and success in the e-commerce world.