Innovation is as much about understanding customer needs as it is about passion, and customer feedback is essential to entrepreneurs. Here are four ways to use customer feedback to improve businesses.
A common word of advice for entrepreneurs is to build what they personally want, but this can prove to be a path to failure. After all, it's said that 90% of startups fail, and the number one cause of those failures is that there's no market need.
From Facebook's metaverse folly to the downfall of Juicero, the story of failed projects is littered with tales of companies that just didn't understand their markets well enough. While passion is, in the words of the late Steve Jobs, "the only thing that keeps you going" when it comes to the long journey of entrepreneurship, it isn't enough. It's equally important to understand the wants and needs of your customer base.
This means that customer feedback is essential for entrepreneurs. With in-depth customer feedback, entrepreneurs can better understand their markets and innovate smarter. It can help them develop products that customers actually want and need, rather than products that founders think they need.
Here are four ways that entrepreneurs can use customer feedback to improve their businesses:
1. Use customer feedback to inform product development
It's also important to use customer feedback to inform product development. This means that entrepreneurs need to take the time to read customer feedback and implement changes where necessary.
For instance, Robinhood CEO Vlad Tenev said that many of the company's product priorities are based on customer feedback. This means that the team is actively listening to customers and making changes based on their feedback.
One early feature that helped Robinhood differentiate itself was a "Fractional Shares" option, which allows customers to buy partial shares of stocks. Another more recent example is Robinhood's decision to provide up to a 4% interest rate on customers' uninvested cash deposited in their accounts. This was based on customer concerns about the impact of inflation on their investments.
By actively listening to customer feedback and incorporating it into product development, entrepreneurs can ensure that their products remain competitive and meet customer needs.
2. Leverage communities for direct communication
An obvious question for entrepreneurs is how to collect customer feedback and hone in on what's important. Social media platforms like Reddit, Twitter and LinkedIn can be great places to start. For instance, Twitter Spaces is a feature that allows users to create a chatroom-like environment with a group of people.
This serves as a great way to get feedback from users. Entrepreneurs from Elon Musk to Neil Patel have leveraged such communities to get feedback from their customers. However, entrepreneurs can go further by establishing their own dedicated communities.
One strategy is to build a Discord server, which is a chat application perfect for connecting with customers and building a community. This works especially well for games and software products, as the format makes it easy for customers to provide feedback. This was the approach taken by Utkarsh Sinha and Siddharth Jain, the co-founders of Martian, a Web3 firm that recently raised $3 million. Sinha notes that their Discord server has more than 150,000 members who are providing valuable feedback.
Another strategy is to host online events, such as webinars. This allows entrepreneurs to get feedback from customers in real time, as well as to showcase their products and services. One challenge with this approach is the relatively smaller size of the potential audience, but it can be a great way to build a loyal customer base. Even if the turnout isn't huge, the feedback received can be invaluable.
3. Quickly ship products based on feedback
Another important way to use customer feedback is to ship products quickly. By moving quickly, entrepreneurs can get feedback from customers about their products and make necessary changes or improvements.
If your business is taking in that valuable customer feedback, but failing to act on it quickly, you might be missing out on a big opportunity. This was something that was highlighted by Siddharth Jain. Jain said that working closely with an engineering team was a big advantage for the firm, as it allowed them to quickly ship products and features whenever customer feedback was received.
In other words, while your sales and marketing or customer support teams may be more closely in touch with customers and their feedback, the engineering team needs to be able to act on that feedback in order to make real change.
4. Use customer feedback to pivot
Customer feedback can also be used to pivot. Pivoting is a term used to describe the process of changing the direction of a business. It's a strategy that some entrepreneurs use when their original product or service isn't succeeding as expected.
For example, when the team behind the video game Fortnite found they weren't getting the traction they wanted, they used customer feedback to pivot. They created a version of the game that was free to play, and the rest is history. Today, Fortnite is one of the most popular video games of all time.
The lesson here is that customer feedback can be used to pivot a business, and it's important for entrepreneurs to be open to using it. That doesn't mean blindly following customer feedback, though; it's still important to use your own judgment and expertise to make the best decisions for your business.
Customer feedback should be an essential part of any business's innovation process. By understanding customer feedback and using it to inform product development, leveraging communities for direct communication, shipping products quickly and pivoting when necessary, entrepreneurs can create products that customers actually want and need. This can lead to greater success for the business in the long term.
Membership is open to businesses and organizations interested in increasing visibility and brand awareness in Westchester County and surrounding areas.