Know Your Customer: How to Build and Quantify Buyer Personas
How well do you know your customer? Well enough to know what they’re willing to spend money on, what they like and dislike about your products?
Every business likes to think they know their customer, but there’s a big difference between thinking you know and being totally confident that the person you’re targeting is someone that will buy from you, nine times out of ten.
That’s what buyer personas do. They turn a general idea of who a customer might be into an accurate representation. Personas help to create greater engagement. They improve customer experience and marketing effectiveness. And they help drive more lead conversions.
Personas help you become a better business.
So useful are buyer personas that 71 percent of companies that exceed revenue and lead goals use them, and 47 percent consistently maintain them. Also, 90 percent of companies using personas have been able to create a clearer understanding of who buyers are, thereby improving revenue, customer retention and profitability.
What to include in a buyer persona
A buyer persona is a semi-fictional representation of your customer. Most people name them so that they’re more relatable. By painting as clear a picture as possible of a buyer, it allows businesses to build relationships and gain a better understanding of who they are.
A persona is made up of the following things:
- Demographics — Age, gender, job title and role, salary, etc.
- Challenges — Things that the buyer faces in their daily work (that your software can help with)
- Goals and aims — What the buyer wants to achieve and what’s important to them in relation to your industry and product
- Communication — how they are mostly like to communicate or prefer communicating (email, phone, social media, live chat, etc.)
- What you can do — how your business and software can help to improve their job and provide a solution to everyday challenges
Building Buyer Personas
Building accurate buyer personas benefits the entire company. Marketers can produce better content, product managers can better quantify the product value, developers can design a more comprehensive product, and sales teams can actively target prospects with an interest in your industry/software.
They also improve the lead conversion rates of instant demos and online sales meetings.
It’s important when creating personas that the process involves multiple departments. As said, the whole organisation benefits from this, so members of management, sales, marketing, design and development should all be involved. Before working on the gathering of intel, it’s important to remember this: the buyer isn’t always the end-user.
In many cases, SaaS users having nothing to do with the purchasing of the product. Budgetary control is in the hands of the decision makers. These are the people you should look to target during research. Understanding who’s going to be the end-user and who will be the budget holder gives you two or more ways into a client, increasing your chances of success.
The following methods can all be used to produce the information you need to build your personas:
- Personal interviews — Face-to-face or online, asking questions about their interests and reasons for buying
- Surveys — Via email or social media asking questions about buying habits, challenges, goals and software usage
- Analytics — Demographics and interest reports can offer great insight into the kind of people that visit your website
- Competitive analysis — Your competition is targeting a similar audience as you. Who is this audience and what’s being done to attract them?
- Market research — Analysing market data within your industry
The easiest way to find your target customer, if possible, is to clone your most engaged customers. Who is getting the most value from your product? How are they using your SaaS to meet challenges and accomplish goals?
Identify engaged users, look for similarities in the things they do and use the information to create personas.
Developing buyer personas is the first step. But that information doesn’t answer questions on what a buyer is willing to pay, or what their Lifetime Value (LTV) is, or what marketing channels they can be found in. This all comes from quantifying.
Using the research you’ve amassed in building personas, you should answer the following questions to quantify buyers:
- What is the buyer willing to pay for SaaS products?
- What is the Lifetime Value (LTV) of the buyer?
- What is the Customer Acquisition Cost (CAC) of the buyer?
- Which features are important to the buyer? And which are of lesser interest?
- What marketing channel(s) are likely to reach the buyer?
In answering each of these questions, be sure to validate everything with data.
Data can come from customer insights, customer support information, instant demos, industry reports, academic papers, surveys — anything that gives a clear signal. Building and quantifying buyers’ personas will allow your SaaS company to thrive in business and updated data of your target audience will help to generate leads and close sales long into the future.