Why It is Important to Know Your Customer?

[Mika]

If you use financial services, for instance, online payment wallets like paypal, crypto exchanges, and wallets, banks, etc. you will have to do KYC, which is a short form of Know Your Customer. I do not see this being done by small businesses but knowing your customers is as important to small businesses as for big businesses.

Not all products appeal to everyone. Just because your neighbor loves Candy Crush doesn't mean their grandma will. When you know your customers, you can easily sell your products. Analyze their needs, interests, and existing habits to determine whether they will buy your products or not. When you offer your products to the right crowd, your chances of selling your product increase and you thrive in the market.

 

[Phantasm]

In various sectors such as finance, banking or e-commerce, it is essential to know the customer (KYC) which helps in reducing risks, enhancing security and ensuring that businesses builds trust with the customers. KYC consists of confirming the customers’ identity, to avoid fraud and identity theft, comply with regulatory requirements and manage risks as well as offer products and services that respond to their specific needs. This way, a company can also build stronger relationships, anticipate account takeovers and be flexible on changing risks by knowing what their consumers prefer. Such strong measures also allow for maintaining customer trust while meeting their safety demands since they want a robust KYC plan. For companies to operate securely, adhere regulations and establish lasting customer base relationships this is why it’s important.

 

[Etini]

Knowing your customers as a small business creates a sense of loyalty that would lead to extended patronage from such customers. In an era, where customers loyalty is not a common concept, one can use relationships with customers as a bait to stimulate loyalty.

When a business knows it's customers, it would be easier for it to communicate sensitive issues like price increase and have a solid understanding with the customer. Also, knowing your customer breeds trust between the customer and the business. The customer would always recommend you because of the solid relationship between a customer and a business.

 

[Good-Guy]

Knowing your customers as a small business creates a sense of loyalty that would lead to extended patronage from such customers. In an era, where customers loyalty is not a common concept, one can use relationships with customers as a bait to stimulate loyalty.

When a business knows it's customers, it would be easier for it to communicate sensitive issues like price increase and have a solid understanding with the customer. Also, knowing your customer breeds trust between the customer and the business. The customer would always recommend you because of the solid relationship between a customer and a business.

The Know Your Customer (KYC) is a process where you tend to "identify" your customer. This may include many things such as collection personal information about your customer. This also means that you may collect information such as date, name, address, and other details about your customers

The Know Your Customer (KYC) process is not needed in many cases

The Know You Customer is not a mandatory thing in many cases. If you are serving random people in a random manner, then you may not need to collect the information. For example, when you visit a restaurant, the chances are that the waiter or the restaurant manager may never ask you about your details such as your date of birth, name, address. This is because such information is irrelevant when you run a restaurant.

The KYC is mandatory under specific circumstances

We must understand that there could be some exceptions where you may be required by the law to obtain information of your customer. For example, when you run an exchange or a finance company, then you may be required by the law to obtain information and verify your customers. So, this depends a lot on the kind of business you are running.