The premise of my “how to compete with free” post was that the best weapon against “free” is a “better” product. I argued that there are real and perceived benefits that consumers want and are willing to pay for and that the challenge for you as a publisher is to find the benefits that matter to your target customer/market and relentlessly polish your offering to ensure your offering is #1 for those specific benefits.

The obvious question then is how do you know what is most important to your customers? The answer: spend some time getting to know your customers, the answer will quickly reveal itself.

Here are a few tips to help you learn more about your customers.

Tip 1: Listen to your current customers.
An easy way to learn what customers want/need is to spend a little time – daily, weekly, monthly – reading support emails. Support email provides great insight into how your current customers are using your software; what their problems are; and how (they think) you can improve your product.

Tip 2: Join the conversation.
“Web 2.0” and Social media is your friend… For better or worse, people are talking. People are voicing their opinions in comments on your blog, on your competitor’s site, in your forums, on Twitter, etc. You need to find out where they are talking and what they are saying.

There are a variety of tools that make social media monitoring easy, such as Google Alerts and TweetBeep. Used correctly, web 2.0/social media sites are a free form of market research. So get involved in the conversation.

Tip 3: Site and keyword analysis.
Another way to learn about your customers – albeit more convoluted – is by analyzing the search terms/phrases that are bringing them to your site. Google Analytics allows you to drill down into the search terms/phrases people are using when they come to your site. Additionally, you may want to spend some time analyzing the pages they visit most. This can be especially beneficial if you have specific content, such as tutorials, focused on specific problems and/or tasks.

Maybe people aren’t coming to your site (yet). No problem, Google’s keyword tool (and other similar services) allow you to see the search terms/phrases people are using on search engines in relation to your product.

Together, the search terms/phrases and the “top content”, can further illuminate what matters most to your customers.

Tip 4: Formal market research.
Of course, if you have the resources, formal market research is by far the best method to determine what is important to your target customers. The previous methods, while they have their benefits, are subject to various types of bias such as availability heuristic, confirmation bias, etc. This isn’t a post about psychology so let’s just get back to the matter at hand.

Market research doesn’t have to be a high-price marketing company; you can start with a simple survey or sit down with a group of users and learn how they use your software.

If you want a formal study, but are on a budget, go to the local university and ask the marketing department to help you with a research project – university professors (grad and undergrad) will typically welcome the opportunity to give their students a “real world” application for the concepts they are studying.

With knowledge on your side, you can make better strategic choices in your fight against “free”.

As always, remember… People are not looking for “software”, they are using your software to solve problems. Think “problems” first and features second. Your goal is to understand the problems your customers face and develop “features” that solve those problems. Too many times we like to think about features first and then how those features can be used (to solve problems) second.

Tags: linkedin, Marketing, Strategy

This entry was posted on Tuesday, November 17th, 2009 and is filed under Marketing, Strategy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.