According to Alberto Perlman, co-founder and CEO of Zumba Fitness, the “biggest mistake” entrepreneurs make is thinking they “know more than their customer,” he tells CNBC Make It.
Perlman has spent nearly two decades building Zumba’s global brand (in 2012, The New York Times reported Zumba was valued at $500 million after Insight Venture Partners and the Raine Group invested in the company). And throughout, he has listened to and used customer feedback as a tool to further its success.
“You have to always be listening, and listening between the lines, to your customer,” Perlman says.
When customers share what they’re “frustrated with, struggling with, and what they love” about a business, owners should use the feedback to their advantage, he says.
“You can start connecting dots, and that’s how you create and solve their problem,” because to be successful in business, entrepreneurs must be good at problem solving, Perlman says. “It’s about falling in love with the problem that you’re trying to solve, finding a solution for it and being passionate about it.”
Perlman himself is “constantly” learning from and listening to customer feedback, he says, which has helped Zumba over the years.
For example, Zumba, originally a dance workout, launched Strong Nation, a high intensity interval training (HIIT) program, in 2016 after customers expressed interest in the HIIT trend.
“We saw that a lot of people wanted to do HIIT training,” Perlman said. As a result, “Strong Nation [has] been growing like a weed.”
Listening to customers also helped Zumba thrive amid the Covid-19 pandemic.
The fitness industry was one of the hardest hit due to the coronavirus’ spread. Fitness clubs forced to close faced $10 billion in revenue lost as customers cancelled their memberships and at least 500,000 employees were furloughed, according to a survey by investment bank Harrison Co. conducted in April.
Like gyms and other exercise brands, Zumba pivoted once stay-at-home orders were mandated. While Zumba is typically licensed and used by gyms for in-person, group classes, Perlman and his team launched an online platform for customers to take virtual Zumba classes with trainers.
Almost every week since its launch, “we keep updating it [with] new features” based on customer and trainer feedback, Perlman says, which is “driving more people to the instructor’s classes.” As a result, “instructors generate more income, reach more people and have more students,” despite the pandemic woes. Perlman declined to give any revenue numbers.
Perlman is not alone in extoling the importance of what customers have to say – Jeff Bezos, founder and CEO of Amazon has built his company around it.
In 1994, Bezos started Amazon as an online bookstore, but shifted to become “the everything store” after he emailed 1,000 random customers asking for feedback.
“Much of what we build at Amazon Web Services is based on listening to customers,” Bezos wrote in his 2018 letter to shareholders. “It’s critical to ask customers what they want, listen carefully to their answers, and figure out a plan to provide it thoughtfully and quickly.”
That year, Bezos also said he continues to read customer complaint emails and forwards them to his executives to prompt adjustment.
“Customers cannot tell you what to do, but they can tell you what they’re frustrated with,” Perlman says.
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