Vol. 127 - NO. 39

Blog Startup CPG

SINCE 2019

Using Automation to
Listen to Your Customers

By Stephen Selgrade, Marketing Director of Cin7

David Downing is the Co-Founder & CEO at ChipMonk Baking

 

At ChipMonk Baking, we’re huge believers in building relationships with our customers to drive overall strategy and brand positioning. How can you possibly grow your brand if you don’t even understand why your customers are buying it?

The trouble is, at some point talking to every single customer can become overwhelmingly time-consuming. You also need to make sure you’re talking to the right people. Going to farmers markets and talking to every single person might lead you down the wrong road. Does the opinion of someone who ultimately wouldn’t ever be a customer of your product really matter? You have to figure out a way to filter the noise and focus on those superfans who will drive immense repeat revenue and word-of-mouth marketing.

Before I dive into how to do that, let’s cover a couple of concepts.

Pareto Principle

Also known as the 80/20 rule, The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes. In the world of business, that often equates to 20% of your customers driving 80% of your revenue. It’s not going to be exact, but I can guarantee if you look at your list of e-commerce or wholesale customers, generally a “vital few” will be driving a disproportionate chunk of your overall business.

Keep this in mind. How can you focus on that 20% and cut back your time and spend on the 80%.

1,000 True Fans

The 1,000 True Fans Theory comes from an essay written by Kevin Kelly in 2008. The principle is simple. If you have 1,000 true fans who buy just $100 annually from your business, you’ve built yourself a $100,000 business. Are you going to be a behemoth like Costco or RX Bar? No. But by focusing on a core group of true fans, you’re building a strong foundation for a profitable business. Assuming your product ultimately helps more than 1,000 folks, you’re also building a process and pathway for broader growth.

How to Find and Listen to Your Top Customers

Okay, so now we’ve established how important a relatively small group of your top customers can be. Not only are they capable of driving a huge chunk of your financial performance, but they can also offer clues about how to tell the story of your brand in a product in a way that will attract even more of these super fans.

But how to do it?

Here’s where technology can be put to good use, and here’s how we do it at ChipMonk. Note, this assumes that you are operating a D2C website with a good chunk of your overall sales. It could potentially be applied to your B2B customers as well.

Step 1 – Filter: Use your online sales data to filter your customers. You can do this by number of orders, total historical purchase value, or a combination of the two. Basically you want to create a filter for your very best customers. This can be down with automated flows like the email marketing app Klaviyo, which can plug into your website’s data to know when to filter and send emails.

Step 2 – Scheduling Calls: Using your email or SMS marketing app, create an automated flow that messages your filtered top customers. Offer them a big incentive (e.g., a $20 off coupon) and ask them to schedule a call with you. It’s important that the email comes from the founder themselves and that the call is with the founder. Use a calendar scheduling tool like Calendly to send them a link where they can easily schedule a call. Keep it to 15 minutes and block off a time of your week just for these meetings (I do Fridays).

Alternatively, if you want to expedite the process, simply call those customers directly yourself (assuming you have their phone numbers in your online sales system). You’d be surprised at how many people are surprised and excited to speak with you. Outside of information gathering, speaking with your top customers will buy you a lot of goodwill with them. They’ll understand how much you care about your business and them.

Step 3 – Interview Questions: Don’t just ask any old questions when you get the customer on the phone. Ultimately you need to figure out the Why. Specifically, why they repeatedly buy your product.

The trick here is you can’t just straight up ask them “why?”. You need to ask them seemingly surface-level questions so you can unwrap the why yourselves. Here are some questions I like to ask:

“What do you do for a living?” – this could reveal a social group (e.g., firefighters, nurses, lawyers) who have adopted your product

“What do you do for fun?” – another option to find relevant social groups in love with your product (e.g., running clubs, dungeons and dragons gamers)

“Can you describe the most recent time you had our product…” – insight into how they like to use your product during their day (e.g., breakfast, afternoon pick-me-up, post-dinner treat)

“Did your opinion of the product change after you tried it for the first time?” – this could reveal attributes about your product that are driving repeat customer sales but aren’t yet promoted on your packaging or marketing (but should be!)

“Before you tried our product, do you remember what you used to have on moments like the one you just described?” – this allows you to identify relevant brands and study their marketing and key selling points. This is also a great way to identify potential brand partners for social media collaboration campaigns.

We originally got this survey concept and many of our questions for Dr. James Richardson who has an excellent online course called Scrappy Consumer Research for Founders as well as a book Ramping Your Brand: How to Ride the Killer CPG Growth Curve. I highly recommend the book to any CPG founder, as it really explains why you must understand your top customers to craft a longer-term strategy for your brand.

Step 4 – Analyze Results and Implement Change: You can try doing some quantitative analysis on your results (e.g., word clouds where you see if any word like “keto” keeps popping up) or just qualitatively review your notes and see if you can identify similar trends.

What key product attributes are driving repeat customer sales? What social groups popped up?

From there, you can potentially update your packaging, so it calls out those newly discovered attributes or is designed in a way to appeal to those social groups. Similarly, you can adapt all of your marketing materials and advertisement to better target or speak to the things you learned from your customers. If you are working on any kind of packaging that will be purchased in mass and hit the retail shelves, I highly recommend you go through this exercise beforehand. It will save you a lot of headache!

Conclusion – Your Customers Are Key

At the end of the day, you need to listen to the people who are actually buying and consuming your product. There is no more valuable source of information, but it is easy to forget that and get buried behind your computer or doing sales calls to big buyers and distributors. Don’t make the mistake of thinking your wholesale buyers know more about your customers. You’re in the unique position to listen and learn from your customers and deliver a product and messaging that resonates in a way that will keep them coming back. Using your DTC data can allow you to unlock amazing insights in an efficient and cost-effective way.

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