The Customer Intelligence Pyramid: A structural approach to understanding your customers
As Product Managers, we know that for an individual or business to buy a product, it must solve a problem for them. There must be a tangible or intangible return on their investment.
It’s difficult to solve your customers’ problems without knowing who they really are.
The Customer Intelligence Pyramid provides a structural way of gathering customer intelligence to build a solid understanding of your customers. Customer intelligence is much more than just knowing a few key details about them. The four levels of the Customer Intelligence Pyramid are: customer characteristics, the industry and market landscape, motivators, beliefs and core values, and ultimately, their unmet needs.
At the base of the pyramid is knowing your customers’ characteristics. For B2C products, this includes your customers’ demographics. Understand the basics, such as gender, age, education, region, income, family composition etc. Specifics can depend on your product. For a B2B product, know your businesses’ firmographics. Examples of firmographic data include: the industry your customers operate in, their revenue, market share, years in business, locations(s), number of employees, etc. Understand the status of your customers’ business: are they a multinational or a local business? Are they privately held or a publicly owned organization? Get a sense of their company culture, their business values, and organizational structure to start building out a customer persona. This sets the foundation for the higher levels of the pyramid.
Market Conditions and Industry Landscape
Individuals and businesses don’t function in isolation. External factors such as the trends affecting the market your users operate in, new and disruptive technologies, regulations and government policies, and the political and social landscape all affect your customers’ decision-making process and how they buy or use your products.
Covid-19 is a recent example of how external factors and situations can have a drastic impact on individuals and businesses. When the world stopped traveling, Airbnb was hit hard. They pivoted and started to provide online experiences to their customers to keep them engaged from the comfort of their home.
Another example is the onset of Industry 4.0 and its impact on manufacturing and supply chain industry. Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. Industry 4.0 marries physical production and operations with smart digital technology to enable manufacturing and supply chain companies optimize for high efficiency, agility, and resilience. Product managers and leaders working in companies with clients in manufacturing and supply chain, can benefit from understanding the impact of Industry 4.0, and pivot their strategy to accommodate this industry shift. Being aware of the factors that impact the economy and the landscape of the market allows will allow you to pivot your strategy to not only meet the changing demands of the market you operate in but get in the market on time to have the most impact.
Customer Motivations, Beliefs and Core Values
Intrinsic or extrinsic motivations drive human behavior. As Product Managers, our business is to understand the underlying “Why” behind customers’ behavior. Tapping into the underlying motivations, beliefs and core values allows you to build a product that will resonate with their underlying decision making mental model. For example: people are hard-wired to respond to instant gratification, and social media platforms have tapped into that drive. Businesses on the other hand are driven by their vision, mission, strategic pillars, financial goals, and the problems they are trying to solve for their customers. While all businesses are profit driven, some businesses might just be focussed on increasing revenue while others might be willing to sacrifice short term revenue goals to increase customer engagement which will increase revenue in the long term. Amazon is a perfect example. If you’re a B2B product manager, tapping in to these drivers will help you ask better questions to meet the true needs of your customers.
For Product Managers to build a product that their customers love, it must solve a problem for them. To understand their unmet needs, start with how they are solving that problem today. What alternate methods they are using and what are the associated challenges? Keep an eye on the competition, but always keep your focus on solving for the unmet needs of your customers.
If you want to improve an existing product, understand how satisfied the customers are with the existing products, processes and operations. What are their areas of dissatisfaction and how important are these problems to the customers? It’s necessary to examine the challenges holistically and not only through the lens of the core product.
There are plenty of customer intelligence tools in the market to provide insights on how customers are interacting with your product. For a thorough discovery of unmet needs, talk to your customers. By having a solid understanding of who they are, their intrinsic and extrinsic drivers, and insights on how they use your product, you will ask better questions and dig deeper.
It’s difficult to find all your blindspots while gathering customer intelligence. Customer Intelligence Pyramid ensures that you have a 360 degree view of your customers so you build products they truly adore!
Customer Intelligence is the heart of Product Management. Keep it healthy!