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The Fast Company Executive Board is a private, fee-based network of influential leaders, experts, executives, and entrepreneurs who share their insights with our audience.

To better understand your customers, you need to become one

Why buying the type of business your company serves can be an excellent business decision.

To better understand your customers, you need to become one
[deagreez/Adobe Stock]

One piece of business advice that we often hear out of leaders’ mouths is that we absolutely must know our customers. But how can you do that well when your company produces something that helps other businesses run?

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Earlier this year, I had a chance to find out when I jumped at the opportunity to buy one of the salons my company supports. That purchase has been one of the best decisions I’ve made and has delivered multiple benefits.

GENERAL FEEDBACK WAS USEFUL FOR YEARS, BUT COVID-19 CHANGED THE GAME

Unlike many entrepreneurs, I didn’t start my company because I personally needed a solution and couldn’t find one on the market. I didn’t own a salon. I just had the idea that it would be great to have software to book haircut appointments online.

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But I did have exposure to the industry: my sister-in-law was a hairdresser. And there was also a salon just down the street, close to my house. When I had my concept, I was able to hear what my sister thought. And I was also able to strike up a friendship with the owner of the nearby salon, take him golfing, and get his feedback on what he’d like from the software. That, combined with a lot of online research, helped me get off the ground.

Once the company launched, I gathered more feedback from salon owners and stylists about what they needed. We’ve relied on that feedback for years, letting people, for instance, request features on a page of our website. But I understood that I needed to balance what they were telling me with my own ideas because customers can’t always tell you what they’ll end up responding to or enjoying. As Henry Ford put it, “If I had asked people what they wanted, they would have said faster horses.”

But then COVID-19 hit. All of a sudden, companies started going out of business. One of the salon owners in danger of closing had been with us for many years. I didn’t want her to pack up and leave; her insights were always so valuable to us. Then I thought, what if my company could buy her salon?

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As a software creator, I knew I needed more information to keep improving what I offered. How can salons make themselves more profitable? How do they usually lose products? How do you address problems like a stylist not returning door keys if they quit?

I could have spent thousands of dollars to collect data and figure all that out. But if we bought the salon, then we’d have a place where we could see firsthand what was happening and what the pain points were. We’d have a place to test things, not to mention all the marketing options (e.g., videos, stylist interviews, collecting customer testimonials, etc.).

So in we jumped.

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IMPROVING FROM THE INSIDE OUT

Once we were directly involved with the salon, we had a lot of instances that inspired us to develop new software features. For example, the manager had been physically depositing checks into the salon’s bank account, so we brainstormed on how to do all that depositing electronically to streamline the task. We figured out how to help stylists easily calculate commissions on haircare products they sell, which can get complicated with the stylist and salon writing checks back and forth. We saw how much more effective it was to send texts versus emails, too.

Each time we ran into an issue, we turned the solution into something that all of the salons we serve could use. We created a model so that we could work out any kinks in our own location before doing a wider rollout. So when other salons get our product, the quality is good and long-term adoption of the software ends up being really high. The investment we made by buying the salon was relatively small compared to what that adoption gives us back in return.

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OWNERSHIP INSIGHTS ARE MORE THAN WORTH YOUR MONEY

Because solving problems for our customers from the inside has worked so well with the salon, my business is toying with the concept of purchasing a fitness business, too. If you can afford to do it, consider buying the type of company you support.

But you don’t have to take on another company to do what I am suggesting here; assuming control of an entire business may not be logistically or financially feasible for everyone. You don’t have to take over the operational side for this to work (though it is enlightening). Alternatively, you can spend a shorter period of time working alongside a business owner who uses your product. Or you can work in their establishment as an employee.

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My main point here is that it’s crucial to think outside the box in order to get inside the mind of the people you are serving. If you want to see what they see, you need to put yourself where they stand.

If buying a company that yours supports is not in the cards financially yet, then at least lay the groundwork, as I did with the salon owner down the street. Develop personal relationships with the people who do own the businesses your company serves. The insights you’ll gain are likely to change everything. Cultivating these connections can take on a variety of forms: drop in on local businesses, reach out to clients with problems you have been able to solve, schedule appointments for a service.

Do whatever you have to do to learn who your clients are; listening to them is at the core of improving everything you do.

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Fady “Fred” Helou has built Vagaro into a business that uses creative problem-solving to help more than 150,000 service providers annually.

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