When starting out on your entrepreneurial journey, a lot of your early success will be hanging on your ability to identify and solve the right problems. Startups that build products to solve problems without a defined market need are likely to fail. It’s been reported as the leading reason(42%) behind failed startups.
The same report also claims ignoring customers as a cause for startup failure in 14% of cases, apart from others like un-friendly products, poor marketing, bad pivots, etc. All these causes have something in common — to a great extent, they stem from a lack of customer feedback.
This is why listening to customers is such an integral part of your startup’s early days. Let’s explore reasons as to how and why listening to customers impacts early-stage businesses, in better detail.
7 Reasons To Listen To Customers At An Early Stage
1. Helps Collect Quality Feedback
Quality, real-time feedback from customers is really important for early-stage companies to be able to adapt and build a better product. It helps shape the products as per customer needs and enables the founding team to know their audience better. Lack of such feedback often leaves the startup with a product that doesn’t have demand among it’s potential customers, which then leads to failure.
Ensure you engage with your audience on a regular basis, and keep up with their suggestions and feedback. Keep a tab on business problems they’re facing and build your product to enable them to solve those problems. This will help you cater to your audience better, apart from creating and sustaining demand for your product. Feedback tools like Qualaroo, ProProfs Survey Maker, and Stars Testimonials can help you collect detailed insights about your products.
Neal Taparia, who runs classic games and brain training platform, Solitaired, regularly collects user feedback. “We have ongoing surveys asking what features our users want, or how we can better their experience. We’ve launched 10 new solitaire games based on user feedback. Without user input, we wouldn’t have been able to grow and retain our user base.”
2. Helps Pivot In The Right Direction
As we mentioned earlier in the introduction — bad pivots also play a minor role in the failure of early-stage businesses. Lack of pivots has the same impact, where if a product and business around it doesn’t evolve as per the market needs, there’s an elevated risk of failure. One of the best ways to keep refining your product for the target market is to be talking to your audience. Listening to their feedback and requests will help you improve on your product, or pivot to a different business if need be.
Usually, founders are too late to realize that their product doesn’t fit their intended market. Once customer interviews and questionnaires are made part of the product development process, this feedback loop is cut short and changes or pivots can be executed while still in the early stages of development.
3. Promotes Deeper Customer Relationships
When you interact with your customers often to listen and act on their feedback — it enables you to develop a stronger relationship with them. Customers tend to stick with companies that make them feel heard, as it gives them assurance and control where other companies don’t. As a result, these customers are likely to require less convincing before they buy, stay with you longer, and put up with mishaps and errors more than usual customers do.
Apart from this, they’re also likely to be more open in terms of feedback, offering you valuable insights that are useful in the early stages. So knowing each of your early customers personally and following up with their feedback is a great way to build deeper and lasting relationships with them.
4. Builds Customer’s Trust
Being an early, growing business makes it difficult for customers to place their faith(and money) in your products. With older brands, customers can make purchase decisions based on previous customer’s experience and the brands’ public reputation. This makes it tricky for newer businesses to gain customer trust where they can buy from you worry-free. Being in touch with your customers and engaging with them, acting on their feedback, giving them extra attention, etc., help fix that and build a good perception.
If you’re listening to all your early customers, they’re likely to consider you reliable and friendly. Trust is a huge factor in B2B sales where businesses rely on your products to create outcomes. Hence interacting with them and earning their trust is crucial in order for you to provide them with a value over the long run.
5. Makes For Great Stories And Content
Marketing is another challenge early, small businesses face. Customer interactions make for great stories that supplement your product’s narrative. Especially so when the stories prove the product’s value, and reinforce its positioning. Content pieces like these stories are building blocks of the brand you’re trying to establish with your business.
Apart from helping communicate your product’s core value proposition, it also helps customers relate with you better. A lot of great customer stories, testimonials, etc., can branch out from early customer interactions. By not listening to your customers, you’re essentially letting go of stories that could later define your brand and make it successful.
6. Gets You Word Of Mouth
In continuation to the last point, the shareability of your product or brand tends to go up when you put out stories as part of your communication and marketing activities. Getting your stories and products shared by early users can get you exposure for your business in the early days. It also lends your business credibility since potential customers who come across your content through current users find it to be a better signal for trust.
Hence by interacting and engaging with your customers, you’re also setting your business up to generate more Word of mouth later in the customer cycle.
7. Enables You Compete Better
When you interact and collect feedback from your customers, they also give you insights that could enable you to build a more competitive product. For example, drawing comparisons between competing products and asking customers where you could do better than them. Once you build on the feedback and make up for your competitors’ shortcomings, you’ll be able to capture a bigger share of customers.
You’ll also be able to keep up with your customers’ business needs and keep adding relevant features to support them, as you engage and collect feedback from them. This will not only help you get ahead of your competitors but also maintain your lead — as your brand becomes more synonymous and relevant within your audience.
Listen To Your Customers To Increase Retention And Growth
Customer feedback and insights is absolutely crucial for growing companies to breakout and thrive. You can engage and interact with your customers in any way possible — all that matters is that the feedback is acted on. As we learned throughout the article, having this loop of feedback and improvements can be hugely beneficial to your business.
In the long term, this approach can help you increase your sales conversions, retain more customers and increase their Lifetime Value, all of which heavily contribute towards growth.
