How to Identify and Address Customer Pain Points

2020-10-19

By João Alves

    Being able to identify customer pain points early on and address them faster than competitors is what successful businesses are founded on. Take Warby Parker for example. The prescription glasses vendor was able to shake up an established industry and become a $3 billion company in just 10 years by addressing customer pain points when it comes to buying glasses. Below we get into how you can use customer feedback to solve pain points and get an edge on the competition just like some of the most successful brands out there.

    What Are Customer Pain Points?

    Customer pain points are any problems that your customers are experiencing with your product, with a competitor’s product, or with their own internal processes.

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    Pain points can be broadly categorized into four types:

    1. Support - Lack of necessary information, help, or support from the company
    2. Financial - The product is too expensive or the value doesn’t match the quality
    3. Productivity - The product isn’t efficient to use, it’s either too time or effort-intensive
    4. Process - Customers need help improving a task or process

    To continue with the example above, we can see how Warby Parker addressed several of these categories. First, they recognized the financial and productivity pain points within the glasses industry: Prescription glasses are both expensive and effort-intensive to get in-person when many would prefer to buy online.

    To address these points, they made ordering glasses available online and lowered prices below competitors. They also realized a process pain point would be that customers aren’t able to try on frames before buying. They countered this by allowing customers to order several pairs of glasses to try on for free at home before paying for the prescription version.

    You may be wondering, how did they know where to start? How did they figure out which pain points matter the most to consumers? The answer is customer feedback, which we’ll get into below.

    How to Identify Customer Pain Points

    The key to discovering the issues that really matter to your customers is data, data, data. There are a number of ways you can gather this data and build out the voice of your customer, through both internal and external sources.

    Conduct Qualitative Research

    There are dozens of ways you can collect data about your customers’ likes, dislikes, needs, wants, fears, and other types of pain points. A few of the most popular include:

    • Feedback Surveys - Surveys are great for gathering quantitative data like NPS responses, but also for asking open-ended questions about the customer’s experience. Surveys can be triggered to automatically send after a customer takes a certain action for easier data collection as well.
    • Reviews - Depending on the company, you may have a robust source of qualitative feedback from review sites like Yelp, G2 Crowd, Google Reviews, the App Store, and many others.
    • Support Feedback - Recording conversations between customers and support agents, along with the conversations between customers and chatbots, is another valuable source of open-ended feedback.

    Once you’ve collected qualitative data, you can code it and combine it with quantitative data such as site behavior (including metrics like bounce rate, click-through rate, conversion rate, and more) to get a clearer understanding of trends and frequent pain points.

    Conduct Competitor Research

    Gathering information about pain points from your customers is one half of the equation, with the other being competitor research. You should constantly keep a pulse on competitor pricing and marketing strategies, along with tweaks they’re making to their product. These can indicate customer pain points they’ve noticed and are working to address, and can help you take advantage of these same issues. Where are you losing customers to competitors, where are they capitalizing on your shortcomings?

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    In addition to just addressing current pain points, you should also be on the lookout for places you can better optimize existing practices, even if they are currently successful. Sometimes customers don’t recognize pain points if they’re not aware better options are out there.

    The next step is to meet with your CX, customer service, and executive teams in order to thoroughly discuss the data and identify the next steps. To dig beyond the four basic pain point categories, you can ask yourselves questions like:

    • Why are your customers churning?
    • What are your competitors doing better?
    • What do you spend the most time working on?
    • What is upper management most concerned with?
    • Where are customers dropping off before purchasing?

    When you’re able to answer the majority of these questions, you’ll be able to more specifically identify the areas of your business you need to work on to fix pain points.

    What to Do Once You’ve Identified Pain Points

    Once you’ve met with your team internally to lay out the data-backed pain points you’d like to focus on, there are several next steps to take to make sure your efforts have the greatest chance of paying off.

    1. Establish a Metric and Stick With it

    It’s important to establish one or more KPI’s with your team ahead of time so that you’ll be able to actually track your results. Otherwise, you may not know exactly how effective your efforts have been at fixing customer pain points. Examples of KPI’s to track could be increase to NPS rating, customer retention rates over a set time, or increased purchases of a certain product.

    2. Make Changes Based on Difficulty and Customer Priority

    When you have a long list of pain points and initiatives to address them, it can be hard to know where to start. However, there are two basic rules you can follow to help determine the priority of these tasks.

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    Effort - If the change is quick, easy, and won’t take a lot of employee bandwidth to implement, then it should be at the top of your list. Customer Segment - If the change will greatly affect one of your most valuable customer segments, then it is also important to prioritize it.

    From here, you can conclude that the priority of tasks should look something like: Low Effort/High Impact, High Effort/High Impact, Low Effort/Low Impact, and High Effort/Low Impact (even it’s even worth making changes at this stage).

    To help bring context to this hierarchy, think about tasks in terms of specific KPI’s upfront, such as predicting a certain change will lead to “5x revenue growth” or “improve CSAT 10%.” Adding predicted results to your established KPI’s will allow you to better prioritize tasks that don’t neatly fall into the effort/impact hierarchy.

    3. Communicate Changes to Your Customers

    Now that you have a prioritized list of changes you plan on making, you should communicate these plans to your customers. Not only is this necessary for letting them know that your services are going to be offline for fixes, but on a wider scale, it’s important to communicate to customers that you’re taking their feedback seriously.

    This lets them know that you respect and value their needs and it may convince customers who were thinking about churning to stick with you while you address their pain points.

    4. Advertise to Stand Out From Competitors

    In addition to communicating changes directly to your customers, these initiatives also make the perfect content for advertising. If your customers are experiencing a certain pain point, then it’s likely that your competitor’s customers are experiencing the same issue.

    By highlighting the specific changes you’re making to address this pain point, you may be able to win customers away from competitors through ads highlighting these changes on social media and search engines, as well as adding callouts to your website.

    Real-Life Example: How Chattermill Helped Cleo Address Pain Points

    To demonstrate how gathering feedback to address pain points works in practice to fuel company growth, we’ll briefly discuss how we helped our client Cleo do just that. Cleo is a conversational money management app with a distinct tone of voice: she helps people understand their spending habits and manage their money.

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    As a chat bot-based UX, nuances in language are of paramount importance to Cleo since customers interact and understand her primarily through her tone of voice. At the time, the Cleo team was receiving customer feedback from multiple sources and geographies, making it impossible to understand and reconcile differences in customer attitudes.

    To solve for this lack of data, Chattermill was implemented to provide a unified view of customer sentiment across data sources and channels. By analyzing what customers were saying about Cleo, Chattermill identified granular insights that enabled Cleo to create a better brand identify and product.

    The end result was Cleo’s implementation of their “Roast Me” feature, which matched the tone of voice of the community perfectly and fulfilled a valuable user pain point: you just type “Roast Me” to Cleo and she will give you all sorts of grief for your spending habits!

    Since working with Chattermill, Cleo has:

    • Grown 400% from .5 to 2.5 million users
    • Scaled their team from less than 20 to over 100 people
    • Doubled their NPS score in the U.S.

    So, after seeing those results, are you reading to start learning more about your customers’ pain points and what you can do? The first step for uncovering pain points is to talk to your customers. Chattermill can help you compile and analyze feedback to make sure you are understanding things accurately through our unified data analytics platform.

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