Do you really know your Customers?

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What is the number one way to succeed in business? It is to understand what people want. What motivates people to do certain things and avoid other things? For all businesses, employee motivation is a primary concern. Without employees, the potential of any business is limited to what a single person can accomplish. Employee motivation is important, but if your business is concerned with sales, consumer motivation is perhaps even more crucial. Understanding what consumers want and responding to their desires is a near certain path to increased sales. If understanding humans is the goal, anthropology is the answer.

What is Anthropology?

Anthropology is, plainly and simply, the study of humans. Anthropologists may focus on people who lived in the past, but it is actually much easier to study people who are alive right now. Human beings are complex creatures, with physical, mental, emotional and spiritual attributes. No single area of study can get a complete picture of human beings. Anthropology unites such diverse disciplines as biology, psychology, humanities, archeology and linguistics in the quest to understand human beings better. It may take all of these disciplines to build a complete picture, but in the sales environment, psychology is the central concern.

Psychology 101

All of psychology is built on these two basic ideas:

1. People take actions.

2. For every action a human takes, there is a motivation.

The entire aim of psychology is to understand the motivation behind human behavior. Over the years, psychologists have developed many theories, hoping to explain human motivation. One of the more popular theories is the Hierarchy of Needs.
Abraham Maslow proposed the Hierarchy of Needs framework in 1943. He hypothesized that humans would seek to meet advanced needs like self-confidence, personal achievement, creativity and morality only after they had fulfilled basic needs such as food and water, shelter and safety. Conversely, humans are willing to do undesirable things such as violate moral codes and risk injury to achieve the necessities of life. For example, a normally scrupulous person may resort to stealing food if they are hungry and desperate enough.

Maslow’s Theory in Action

If Maslow’s theory is correct, it has implications for sales.
Low-income consumers are primarily concerned with getting the things they need to survive. Shelter, food, and basic clothing are their priorities, leaving little, if any money available for nonessential items and luxuries. Because these items are essential and there are no ready substitutes for them, price is not an enormous issue; no matter what the cost, consumers must have these items.

Middle and upper income consumers are comfortably able to meet their basic needs. For commodity items, these consumers may be willing to pay more to purchase what they perceive to be better choices. For example, instead of paying the minimum price for white rice, they may be willing to pay more for brown rice. Instead of paying less to buy chicken pieces, they may opt for the perceived convenience and health benefits of boneless, skinless chicken breast.

Do these predictions match reality? In some cases, they do, but there are many exceptions and outlying cases. If you walk down the street in a city, you may see homeless people using iPhones costing $100-$200 upfront and $40-$50 per month. Conversely, many people who are, comparatively speaking, quite wealthy may choose to drive older vehicles or live in a smaller home then they could afford.

A New Theory

If Maslow’s theory cannot make accurate predictions, how can we determine what a person’s motivations are? Each individual has his or her own motivations behind his or her actions, but there is no theory that can accurately predict what those motivations may be. The only way to determine a person’s motivation is by communicating with, listening to and observing that person. If you can discern the proper motivation, you can consistently get people to purchase the products and services you provide. Therefore, the process of determining motivations should be a primary task for anyone concerned with selling goods to consumers.

Putting It into Practice

What does it look like when businesses attempt to put this theory into practice in the real world? Businesses that attempt to understand and respond to consumer motivations will exhibit a few key attributes:

Customization

Most consumers prefer products they feel are tailored directly to them. These days, it does not need to cost much more to offer customized products that come in the exact color, style and size consumers are searching for.

Options

Most consumers want to make choices, rather than feeling forced to buy a certain product. By doing something as simple as offering a product under a variety of brand names, you give consumers the impression that they have options; in reality, they are just choosing among your products. A great example of this tactic is pet food, where a single manufacturer may offer 3-4 brands.

Perception of Value

All other things being equal, consumers are likely to choose the products that seem to offer to best value. This can be as easy as offering your products in a larger “economy” size. Even though the price per unit may be the same, the multi-pack gives some consumers the idea that they are getting better value.

Perception of Quality

For certain items, quality is a concern. One way to give consumers a sense of quality is to actually design and build high quality products. Unfortunately, this method also leads to higher prices, and limits your market. Apple, for instance has been highly successful with this tactic. Another option is to use key phrases like “New and Improved” to inform consumers of incremental product developments. Finally periodically changing the attributes you highlight on your products can convey the impression that you are constantly improving and upgrading your products.

The field of anthropology is extremely wide and deep. For those who are willing to dedicate themselves to use of anthropology in the world of sales, there is potential for greatness. All great salespersons use the tools available to them to maximum effectiveness. Business anthropology is a valuable tool; do not forget to use it effectively.

photo credit: CSUF Photos via photopin cc

Jure Klepic is a Digital Strategist who is willing to say what others leave unspoken. He leads digital and marketing adoptions for global brands and continues to drive change and spearhead innovation. Throughout his career he has worked with global brands from USA to Asia. Jure is a recognized business and marketing thought leader, he is a speaker and a regular contributor to Huffington Post.

11 thoughts on “Do you really know your Customers?

  1. JoeCardillo says:

    This is a good one Jure – it reminds me of something I read this morning about cust. development from the founder of Groove (Helpdesk software): http://www.groovehq.com/blog/customer-development

    Having a testing mentality and being willing to learn go a long way, but most people pay lipservice to those ideas, as they do to the idea of truly understanding one’s customers. It’s really a community building / partnership exercise, that then gets fed back into the culture of a company and also the design / technology being used or built.

  2. hessiejones says:

    deniseleeyohn thanks Denise, jkcallas is a genius in this space. You two would get along:)

  3. jureklepic says:

    JoeCardillo Joe thanks for comment. Your comment is straight on points. Its important to do research before launching the product. 80% of new products fail due to the lack of understanding consumers needs in first place.

  4. jureklepic says:

    @hessiejones deniseleeyohn I love Denise’s book:) Thank you for sharing.

  5. hessiejones says:

    jureklepic deniseleeyohn Jure, I read Denise’s book too. it was awesome! Both of you have a place in my next one:)

  6. susansilver says:

    Jure, all very good points. I was thinking about this when I wrote up my case study for Gygax Magazine. There was no way that we would have found success without a strong understanding of the history, culture, and psychological motivations of our customers.
    Gaming is still one of those hobbies that has a history of being misunderstood, mismarketed, and heavily stereotyped. I think that is why our early community building was crucial. It let us into our customer’s lives in an intimate way. Much more useful than a focus group. You have to be on the ground interacting with people and getting the feedback that you don’t normally hear without seeking it out.

    People are whole and complex,  just isolating customers by demographics doesn’t really tell you about their purchasing behavior and motivations. You have to dig deeper to understand and create an experience that feels good to customers.

  7. jkreindler says:

    iannarino Great post AmyMccTobin – thinking is in line with mine: http://wp.me/p542xa-r5

  8. AmyMccTobin says:

    jkreindler iannarino Oooh… I like this. So will hessiejones

  9. jkreindler says:

    AmyMccTobin which one?

  10. jkreindler says:

    Thanks AmyMccTobin iannarino hessiejones

  11. jureklepic says:

    susansilver Susan, you made a great point on demographic, one of the reasons why segmentation studies are useless this days as well :)  Study communities and people I say!

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