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Listen to Your Customers: Turn to Data to Discover Their Truth Consumers aren't great at telling companies what they want -- but their data can be.

By Rashan Dixon

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

Mitch Blunt | Getty Images

Consider the rise of customer success. Because 74 percent of consumers feel contacting customer service is a frustrating experience, few speak up until they've had a truly bad time. The trouble is, just one negative experience is all it takes to send more than half of consumers packing for a competitor.

That's why, instead of waiting for customers to call in, customer success managers monitor usage data like average session duration and login frequency. Although customers might hesitate to reach out about a page that won't load, constant refreshing can signal that they're struggling. Among U.S. adults, 87 percent want companies to proactively contact them before small issues turn into serious trouble.

Related: 10 Questions to Ask When Collecting Customer Data

Customer success's data-doesn't-lie approach doesn't just benefit users, either. A SaaS provider in the healthcare industry that implemented Gainsight, a popular customer success solution, reportedly cut its customer churn rate by 50 percent and boosted cross-sell leads by 10 percent. By capturing and consolidating user data streams, Gainsight's 360 Customer View tool gives companies the full picture of what their customers actually want.

But customer success isn't the only area where leaders need to pay attention. By sleuthing out signals in audience data, entrepreneurs can identify unmet needs, root out unwanted functionalities, and discover new ways to monetize existing products.

Related: 4 Strategies That Drive Brand Loyalty

All users aren't created equal.

With almost any product, highly engaged users make up a small percentage of total users. Among those talking about the product, however, engaged users tend to dominate the conversation. As a result, companies often assume that what engaged users want is what the user base as a whole wants.

For example, when design and development firm Yeti built Tiny Eye, a freemium VR app reminiscent of "I Spy," it tried to monetize Tiny Eye with a paid level pack. Although Yeti priced the paid levels at $1.99, a mere 1 percent of total users purchased them.

Before sinking resources into a new monetization scheme, cross-reference user feedback and engagement metrics. If an app's existing user base is large but unwilling to pay more, it may not make sense to listen to the diehard fans who want paid content. In-app advertisements may be a less time-consuming, more effective way to generate revenue.

Other software companies try to boost profits by adding more features. Apple's iTunes, for instance, was once a lean and much-loved music player. In 2003, when it debuted, it did little other than store, play, and manage music.

But as Apple expanded, iTunes did, too. The iPhone could play videos, so of course users needed a place to store them. It could run apps, so iTunes became a platform for purchasing and managing those, too. Spotify and Pandora helped users discover new music, so suddenly iTunes added Genius, a recommendation engine. At its high water mark, iTunes did at least 56 things for its users.

By adding every feature its users could possibly ask for, Apple had created what Digital Music News called "a big, fat, bloated disaster of an app." Although Apple has since started cutting features from iTunes, most recently removing the App Store itself, the damage had been done. As music lovers left, Apple pivoted iTunes to a television and movie platform. But iTunes has been bleeding film customers to Amazon and even Comcast, and Apple Music executive Jimmy Iovine recently announced that Apple will shut down iTunes music downloads.

In crashing iTunes, Apple learned a hard lesson: When in doubt, trust data over user requests.

Related: How Millennials Signal Personal Identity Through Brand Preference

In data we trust.

At first, social media might seem a lot like the streaming music and video space: too crowded for new market entrants. But at least one entrepreneur saw an opportunity in data for a different sort of social network.

Mappen co-founder Jared Allgood noticed back in 2014 that teens were ditching Facebook in droves for bite-sized social media like Instagram. A few years later, Allgood spotted a study that linked teen depression and suicide to screen time. Connecting the dots, he wondered: Could a new kind of social app -- one that actually brings teens together in the real world -- be what adolescents are actually looking for?

Although Allgood interviewed audience members as part of his entrepreneurial diligence, he wasn't phased by the fact that few, if any, asked for an app that would get them to put down their phones. He was driven by the data, which told him that, contrary to how much teens use social media, they do it because they crave human connection.

User feedback is powerful, but it only goes so far. To deliver what consumers ultimately want, entrepreneurs can't rely on words alone. In the court of business, it's data that tells the truth, the whole truth, and nothing but the truth.

Rashan Dixon

Entrepreneur Leadership Network® Contributor

Co-founder of Techincon and Senior Business Consultant for Microsoft

Rashan Dixon is a senior business systems analyst at Microsoft, entrepreneur and a writer for various business and technology publications.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

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