Empathy and Observation

Lecture 5
Lecturer: Huseyn Damirli
Think of the last time you were
frustrated with a product or
service—what was the problem?

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Great entrepreneurs don’t just sell
products; they solve real customer
problems.

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Introduction to
Customer-Centric Thinking
Why is understanding customers crucial for business success?

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Being product-centric or
customer-centric.

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The importance of understanding customers

❏ Every successful product or service solves a real

problem for a customer.
❏ Companies that deeply understand their
customers can create better solutions, leading to
stronger customer loyalty and business growth.
❏ Top brands succeeded due to strong customer
insights (e.g., Apple, Airbnb, Amazon).

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Defining empathy in a business context

❏ Empathy is the ability to put yourself in the

customer’s shoes, understand their emotions, and
feel their challenges.
❏ Empathy allows businesses to create products and
services that truly resonate with customers.

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Connecting empathy and observation to customer
insights

❏ Observation helps businesses see what customers

do, not just what they say they want.
❏ Combining observation and empathy gives a
holistic understanding of customer needs.

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The Power of Empathy in
Customer Understanding
How can we develop empathy for customers?

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What is empathy and why it matters?

❏ Empathy helps in identifying unspoken customer

needs.
❏ It is the foundation of human-centered design and
customer experience.

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What is empathy and why it matters?

How did AirBnB go through empathy process in the early

days?

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Empathetic listening and its role in customer
relationships

❏ Don’t just hear—understand what customers are

feeling.
❏ Use tools like “The Five Whys” to dig deeper into
customer concerns.

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Empathy map

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Observing
Customer Behavior
What can we learn from watching customers?

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The role of observation in understanding needs

❏ People often say one thing but do another.

❏ Observing customers in real-life settings reveals
true pain points.

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Customers often don’t articulate
their true needs—entrepreneurs
must observe their behavior.

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Differentiate between active
observation (direct engagement,
such as interviews or shadowing)
and passive observation(watching
customer behavior without
interaction)

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Methods of observing customer behavior
(in-person, online, etc.)

❏ In-person observation: Watching customers

interact with products in stores.
❏ Online behavior tracking: Analyzing website
interactions and heatmaps.
❏ Social listening: Monitoring conversations on social
media.

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Identifying patterns and insights through
observation

❏ Looking for repetitive behaviors that indicate pain

points.
❏ Noticing workarounds—hacks customers create to
solve problems.

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Key Message: Empathy helps
entrepreneurs uncover real
customer pain points and build
meaningful solutions.

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Customer Segmentation and
Niche Strategies
How can we group customers effectively?

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Overview of customer segmentation

Segmenting customers allows businesses to personalize

marketing and product offerings.
Common segmentation methods:
❏ Demographic (age, gender, income)
❏ Geographic (location, climate)
❏ Psychographic (lifestyle, interests)
❏ Behavioral (purchasing habits, brand loyalty)

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How to identify niche markets

❏ Niches are specialized segments with unmet needs.

❏ Example: How Dollar Shave Club targeted men who
were frustrated with expensive razors.

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Creating targeted solutions for specific customer
segments

❏ Customizing products and messaging for different

segments.
❏ Case study: How Tesla targeted early adopters
before expanding to mass markets.

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Key Message: Entrepreneurs succeed
by deeply understanding a specific
customer group, rather than trying
to serve everyone.

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Key Message: Business ideas should
evolve based on real customer
insights, not just assumptions.

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Defining Problems and
Creating a Unique Value
Proposition (UVP)
How do we design a product/service that truly solves a problem?

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Understanding customer pain points

Understanding customer pain points

❏ A pain point is a frustration or challenge that

customers experience.
❏ Techniques to identify pain points:
❏ Customer interviews
❏ Analyzing complaints and returns
❏ Studying competitor weaknesses

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How to frame problems and develop solutions

Problem Statement Formula:

❏ [Customer] needs a way to [achieve a goal]
because [pain point].

Example: Uber identified the problem of inconvenient

taxi rides and solved it with an app-based system.

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Crafting a UVP that resonates with target customers

A Unique Value Proposition (UVP) should answer:

❏ What problem are you solving?
❏ Why is your solution better than others?
❏ Example: “Spotify – Music for everyone, anywhere,
anytime.”

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In-Class Exercise: Defining
Customer/User Personas
How can we create a realistic picture of our ideal customer?

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Purpose and benefits of customer personas

❏ Helps businesses focus on real client needs instead

of assumptions.
❏ Leads to better product design and targeted
marketing strategies.

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Step-by-step guide to creating detailed personas

❏ Give the persona a name (e.g., "Tech-Savvy Sarah")

❏ Define demographics (age, location, job, etc.)
❏ Describe their goals and challenges
❏ Identify their buying behaviors
❏ List their preferred communication channels

Steps to build a strong persona:

❏ Name & background (age, job, personal traits)

❏ Goals & motivations (what they want to achieve)
❏ Pain points (frustrations, unmet needs)
❏ Buying behavior (how they make decisions)

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Group activity: Defining real-life customer personas
based on observation and empathy

❏ Students break into groups.

❏ Each group selects an industry or startup idea.
❏ They develop a persona and present it (name, age,
goals, pain points, etc.).
❏ Class discussion: What surprised them? What
insights did they gain?

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Refining Problem-Solving
Approaches
How do we use empathy and personas to design better solutions?

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Using empathy and personas to improve
problem-solving

❏ Ensuring that products/services address real pain

points.
❏ Testing ideas with customers before full
development.

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How to design solutions that meet real customer
needs

❏ Prototyping and user testing.

❏ Iterating based on feedback.

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Iterative approach: Testing and adapting solutions

❏ The "Build-Measure-Learn" loop from Lean Startup

methodology.
❏ Rapid testing through A/B testing and pilot
programs.

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Thank you!