I’ve spoken a lot about how important it is to validate your product ideas and to really know your customer. I’m delighted to share some insights from an expert in this area.
Abbey Teunis is the Founder and Director of Embark Insight.
Abbey helps small and medium sized businesses analyse their customers so they can create products that meet their customers’ needs. She speaks to potential customers to get an insight on what they think about their brand, products and advertising.
Here’s an overview of what Abbey has to share. Remember, you can also listen to this interview, if you prefer.
Could you tell us a little bit about Embark and what you do?
I help businesses make smarter business decisions by helping them understand their customers. This is typically done with a variety of market research techniques that most people would be familiar with – like surveys, focus groups and interviews. Ultimately to try and find out what people are really thinking, believing and feeling about whatever topic we’re talking about.
If I was to try and summarise what the majority of my business is, typically the questions I help my clients answer fall into three broad areas.
The first is ad testing and evaluating whether the adverts that they have designed achieve the objectives that they wanted them to achieve. What that boils down to is whether they connect to and resonate with their target customers and how we can optimise that and help them do the job better.
The second big area is product testing. Evaluating whether they should launch new product ideas, or whether they need more work before they go into production or before they launch them.
The third area is around brand development – what strategic elements clients need to focus on when they’re building a brand if that’s at the starting point of their journey, or if they’re developing and maintaining their brand.
Identifying your customer
How do you sort of know who a company’s ideal customer is? Is that something they come to you with, or is that something you work with them on identifying?
A little bit of both actually. It depends on where they’re at in their journey and where they’ve come from. I’ve worked with companies that are startups and they’re still working out who their target customer is. I would then help them identify who that is by having a look at things like who finds their idea appealing.
You also need to look at it from the business side, so things like what’s the minimum price that they’re willing to sell it at and who can actually afford that product. So it’s a little bit of an art when you’re at that early stage of developing the picture of the ideal customer.
I’ve also worked with companies that are more established and typically know, or have a broad idea, of who their target customer is.
What kind of things do you think you should know about your ideal customer and how would you go about finding this out? If I haven’t even thought about my customer, what kind of questions should I be asking?
The first question you should be asking is who you want to talk to, who you think is the right person for your product.
Presumably, when somebody’s going out and deciding and developing a product they have identified that there is a need that exists or a problem that needs solving and that’s the starting point, who has that problem, who has that issue.
A lot of that early stage is about your own intuition. You’ve decided to develop a product for a very good reason. Don’t put that aside as less important. Once you’ve got that and an idea of what price you’re willing to sell your product for (at the very lowest), there are four key questions you need to be able to answer about your ideal customer.
- The first is a socio-economic one; so this is their personal household income, education, working status, etc, because that ultimately informs what their affordability is, what their needs are and how involved they’re going to be in making that decision.
- The next thing is demographics, if that’s relevant for your product. (Things like age, gender, location, etc.) Personally I think these demographic ones only need to be included if it’s relevant for your product. I.e. If your product is targeting mums, obviously there’s a gender demographic you need to be considering.
- The third thing is what their attitudes towards your category actually are. So let’s say you’ve got a health product, something like green juice, you might want to think about how people feel about the health category as a whole. Maybe you would say I want to target people who always search for low sugar products, or only want to have pure drinks that have no added ingredients, for example.
- Where things start getting really fun is actually having a think about how they feel about life as a whole, and this is where you can start playing with things like their values; what’s important to them and what drives the decisions that they make.
Once you’ve got that part (which is actually the hardest) and you start building that profile, you can start creating communications, articulating your brand story and creating products that really resonate with those people because you’re tapping in to who they are.
I’ve got a great example of that actually. I was a project I was working on with a startup designer shoe company and they were still in the launch phase. Unfortunately things have been halted a little bit with production in Italy at the moment, but they were looking at who their target audience was and one of the key values that came out in their ideal customer was independence. So we worked together on how to articulate their brand story to connect on that independence value level. Ultimately what she decided to do was instead of using the brand name she’d used until that point, she actually decided to rather tell her own story of why she was launching the company and changed the name to her name so it really connected on that value level.
Carrying out customer and market research yourself
How can I do this myself, without conducting (or paying for) formal market research?
There are a number of ways you can build a really robust profile of your ideal customer.
The first is by observing your ideal client. All you need to do here is get a little bit creative about thinking where they are.
At the moment we’re all online and you just need to think about where they are. Social media is absolutely fantastic for that. Facebook groups around certain topics are thriving, so getting yourself into those Facebook groups and observing what people are doing, what they’re talking about and what questions they’re asking about can help you to start creating a picture of what’s important to them.
Once we’re out of lockdown [this was recorded during the covid-19 pandemic] going and observing them in the real world is fantastic.
If I stick with the green juice example maybe you could go to Holland & Barrett and see what people are doing at the shop counter, at the shop shelf, even having a look at what’s actually on the shelf and which brands have the most prominence, what colours those brands have, what marks out your category. Just seeing how your ideal customer is interacting with your category, but also trying to find them somewhere else because they are consumers of other things too.
So if you’re a green juice person you might also be going to yoga studios or doing park runs, but you might also be going to the pub. Trying to understand those contradictions is actually a way you can start creating a really interesting profile of that person because suddenly you’ve moved from being a wooden puppet to a real person.
Would you actually have conversations with people or would you simply observe? How would you go about it
It depends on how bold you’re feeling. I would certainly start with just pure observation, seeing what they’re doing and just getting a sense of even really small things, such as what clothes they’re wearing – are they more formal, or informal, for example, because that starts giving you a picture of the sort of language that you can use.
If you’re observing your ideal customer, let’s say outside Holland & Barrett, and they’re repeatedly wearing active wear you can start making some assumptions about what their working day is, for example.
You can start making some assumptions and once you’ve got that basic picture, if you’ve got the guts, go and ask them if you can ask a few questions. The one thing with being in shops is sometimes shops don’t like it, so you might want to do it outside. Generally I find most people are quite open to a quick five minute conversation about something they’ve already done, because more often that not it’s something that they care about
Can you can get enough from doing all your customer research online?
I think it gives you a starting point. It gives you a picture of what’s going on and the language they’re using. If you want to, you can ask questions in Facebook groups to help start building up a profile and seeing what people answer.
There are other ways that you can do it, in future, like analysing your own customer base (if you’ve already got one). You can look at who those people are, who your typical purchasers are, any interactions that you’ve had with existing or potential customers and how they spoke and what sort of questions they were asking.
The other thing you can do is talk to people that sell your product, or places that you’d like your product to be sold. Go and talk to them and get a picture of the kind of customers they have and how they see the profile of their customers. You can use that to build your own.
The importance of research
The importance of doing research and what you’ll get out of it.
I think a lot of people are very aware of the need to do market research and I hear a lot of people talking about making sure you’re connecting with your customer. It’s a brilliant starting point to have that awareness.
I think the problem is that the research isn’t always done in the best way possible. The problem when research isn’t done properly is it means that you’re not getting the right answers to your questions. When you’re then going and making big business decisions, like whether you should launch a product or what price you should put it at, you’re then making big business decisions on incorrect information.
If I knew that I was making business decisions, on something that was quite big, based on information that was false, that would make me feel really uncomfortable. I think that’s probably one of the biggest problems.
I’ve seen the biggest mistakes are in two areas:
- Who people are choosing to interview or survey.
- How they’re actually going about doing it.
Who you choose to interview
A mistake I often see is people carrying out research using family and friends.
The first problem with that is often those family and friends aren’t actually their ideal customer. Even if we assume your friends are your ideal customer, the problem is that they’re too close to your story to give true and genuine feedback.
What ends up happening is one of two things; either they’re overly positive because they want to make you feel good, or they’re overly negative because they don’t want to fail so they’re very very cautious on your behalf. On top of that, because they’re so close to your context, they know what effort you’ve put in, they know your values and morals and ethics, so when they evaluate your product and give you feedback they’re giving it to you with all of that context in mind.
Of course your real life customer wouldn’t know all of that when they saw your product. They’d see it and make a snap decision about whether it’s for them or not. So going and interviewing your friends and family won’t give you a real life reflection of what your actual customers would do.
A great example of this is Innocent Smoothies. Before Innocent launched they actually surveyed their family and friends and all of their family members told them not to do it, that it was too risky. At that point it was a completely new category in ready to drink drinks, so their family said “no, you guys can’t quit your day job, you can’t go that way because it’s too much, the market isn’t ready.” They were just being overly cautious on their behalf and thank goodness they didn’t listen to them because they started an entirely new category that didn’t exist before.
How you go about it
The main issue is how you actually ask the questions – particularly if you ask questions that are leading. An example of that would be do you like this product or do you love this product? Implicit in that question is the assumption that they liked the product at all, so what ends up happening is you end up getting overly positive results. What you should be doing is asking something that’s much more open like “how do you feel about this product” and “what made you give that answer?”
Coming back to the Innocent story, after doing research with their family and friends they decided they still believed in their idea and they were going to still take it forward. They went to a music festival and had a sample stand. They had a sign above the stand asking people if they thought that they should give up their day jobs and make smoothies. They had two bins where people could toss their empty bottles once they’d finished drinking them; one that said yes and one that said no.
It was a really simple way of finding out what people thought of their product. It was very simple, very non-leading and it gave them a positive answer ultimately in the end, hence they launched.
Of course what it did miss and what they couldn’t have known, was whether everyone who tried it was their ideal customer and why people said no if they did say no. It was still a good start and a great example of having a question that’s open enough that you can get to the real response, rather than something that is framed in a way that is overly positive.
If you’re going to carry out your own market research what are good questions to ask?
Firstly you need to establish whether there’s a need for your product, or what problem the product is solving. Without knowing this you actually don’t know if your product is relevant or not.
After that if you want to simplify it as much as possible. There are three questions that I always include:
- How appealing the idea is (if it’s still at an idea stage).
- How likely they are to buy your product.
- How unique they think the idea is.
The best way to do this is with a scale going from extremely unappealing to extremely appealing (as an example for the first question), so you can get a range of responses.
There’s a lot of evidence that those three questions are the key markers of success in a new product launch.
If you want to include some extra questions, to get some depth and understanding around what people are responding, I would add in things like:
- What they like or dislike about the idea – because that gives you some feedback on where you can optimise and improve it. The things they like can also help you with your launch communications.
- How relevant it is.
- How believable the product claims are.
- What they’d expect to pay for it – because that gives a baseline for where you could be potentially pricing it.
Establishing your product price
How would I go about establishing the ideal price for my product?
The way to go about asking your ideal customer is really simple and surprisingly direct. If you’re talking to the right people, they generally are quite knowledgeable about price.
It’s known as the Van Westendorp Pricing Meter. It’s four questions about price and you use those four questions to find the sweet spot for your pricing from a consumer perspective.
The four questions are:
- At what price would it be so expensive that you would never consider buying it.
- At what price would it be so cheap that you’d assume the quality would be poor.
- At what price would you think it’s beginning to get expensive but you’d still consider it.
- At what price would you say it’s a bargain but a great buy for the money.
You then get the ranges of those prices and you find the sweet spot where it’s not so expensive and not so cheap that it undermines quality. I won’t go through all of the ways to analyse that now. There’s ample advice online about how to actually identify that sweet spot. That is by far, in my opinion, the best and easiest way of establishing a price point from a consumer perspective
One last thing that I would add as an option is going and having a look at your competitors and seeing what they’re doing, where they’re doing it, what price they’re selling similar products for. Even online, you can look at how they present it, how they promote, what imagery they’re using, etc. I think that that as a technique for market research it goes an incredibly long way.
If you’ve found this useful, you can find more about Abbey and Embark Insight.