Most Important Post I Have Written This Year: What Does It Really Take To Know Your Customers?

This is long conversation and likely to be of interest to those of you who have experienced the limitations of knowledge as it is commonly understood. It may also be of interest to you if you glimpsed the radical difference between knowing and knowing about. If this is not you, then please go do something else.

How Useful Is The Knowledge Gained Through Market Research?

There is a huge industry that caters to the needs of business folks (often those in the marketing function) to know their customers or their target audience/market. I am speaking of the market research industry: qualitative (focus groups etc), quantitative (surveys), and a mix of each. In recent years, a new breed of player has entered this industry: the Voice of the Customer industry with its many technology solutions providers focussed almost exclusively on feedback through surveys. How useful is this research? What are its limits? What can you really know about your customer/s through this kind of knowing?

What Does It Take To Know Your Customer? The Short Answer

There is one well know market research organisation that sells and ‘supplies’ market research to many big brands who are keen to know their customers. This organisation knows it stuff: market research. Given this one would assume that the folks in this organisation would know all they need to know about their customers – those who commission the research (on their customers and target markets). What is actually the case?

One of the growth challenges, of this marketing research organisation, is a lack of understanding, knowledge, of its customers. How can this be?  This organisation has an army of professional market researchers, an array of market research technologies, a broad range of tools that it uses every day; and history/track record of conducting all kinds of research.

Clearly, market research, that this organisations does and sells, does not provide the kind of knowing that it is seeking of its own customers. So the short answer is it takes more than market research whether through focus groups or surveys. Whilst this kind of knowledge may be interesting, even somewhat useful, it is not sufficient.

What Does It Take To Know Your Customer? The Long Answer

To answer this question it is necessary to clearly understand-distinguish between ‘knowing’ and ‘knowing about’.  Once you get this distinction you get why it is that the market research companies has no real understanding of its customers. You will also get why it is that most advice given by sales gurus to sales reps is useless.

Should you use your valuable time to master this distinction?  Let me put it this way, I say, mastering this distinction is one of the most important distinctions, if not the most important, distinction to master for effective living.  Once you master this distinction you can focus on what really generates knowledge. And you will no longer need to be bewitched and misled by the many academic articles, business books, guru, advisors and consultant. You may even see that this stuff is worse than useless, it is dangerous!

What distinguishes ‘knowing’ from ‘knowing about’?

I invite you to read the following passage with someone who has grappled with this question not theoretically but through lived experience:

When I was working on the Meaning of Anxiety, I spent a year and a half in bed in a tuberculosis sanatorium. I had a great deal of time to ponder the meaning of anxiety – and plenty of first hand data on myself and my fellow anxious patients. In the course of time I studied two books ….: one by Freud, The Problem of Anxiety, and the other by Kierkegaard, TheConcept of Anxiety.

I valued highly Freud’s formulations …… But these were still theories.  Kierkegaard, on the other hand, described anxiety as the struggle as the living being with nonbeing which I could immediately experience in my struggle with death or the prospect of being a lifelong invalid……

What powerfully struck me then was that Kierkegaard was writing about exactly what my fellow patients and I were going through. Freud was not..… Kierkegaard was portraying what is immediately experienced by human beings in crisis….. Freud was writing on the technical level, where his genius was supreme ….. he knew about anxiety. Kierkegaard, a genius of a different order, was writing on the existential, ontological level; he knew anxiety.

– Rollo May, The Discovery Of Being

Have you gotten the distinction? Kierkegaard knew anxiety in the only way that generates knowing: through experiencing it, living it, being anxious.  Freud, knew about anxiety.

Failing to distinguish ‘knowing about’ from ‘knowing’ compromises effective action and generates unintended outcomes

Let’s do a thought experiment. Imagine that I can get a bunch of data about you: name, address, age, marital status, number of children, job, income, what you spend your money on, where you spend your time, your height, your weight, colour of your eyes……  Clearly I know about you. And I might get to thinking that I know you. Do I? Do I really know you as a living-breathing human being?

Before you answer that question, I ask you read and truly get present to the profound insight that is being communicated in the following passage:

The Mexican sierra has 17 plus 15 plus 9 spines in the dorsal fin. These can easily be counted. But if the sierra strikes hard on the line so that our hands are burned, if the fish sounds and nearly escapes and finally comes in over the rail, his colors pulsing and his tail beating the air, a whole new relational externality has come into being – an entity which is more than the sum of the fish plus the fisherman.

The only way to count the spines of the sierra unaffected by this second relational reality is to sit in a laboratory, open an evil smelling jar, remove a still colourless fish from the formalin solution, count the spines, and write the truth…… There you have recorded a reality which cannot be assailed – probably the least important reality concerning the fish or yourself.

It is good to know what you are doing. The man with his pickled fish has set down one truth and recorded in his experience many lies. The fish is not that colour, that texture, that dead, nor does he smell that way

– Steinbeck and Ricketts, 1971, pp 3-3

Summing Up

Life occurs in the arena, is dynamic, is ALWAYS relational, and every observation and ‘lesson’ is context specific.  Knowing occurs in the arenaGenuine, deep, insightful knowing occurs in and amongst those who spend sufficient time playing full out in the arena to transcend discrete objects-events and experience-see relationships, patterns and the deeper structures that generate the patterns and thus the events.

Most of what is spoken, written about and passes for knowledge in Western society is that which can be observed, relatively painlessly, by sitting in the stands observing what appears to be going on (as viewed by the observer with his particular ‘line of sight’) in the arena: knowing about. It is ok for non-relational objects. It is ok for abstract concepts. It is ok for that which is static. It is totally insufficient when it comes to the living: the individual, the social system, life in its fullest expression.

You can never know a human being (customer, employee) through focus groups or surveys. To know a human being you/i must walk in the shoes of that human being and experience situations, people, encounters as s/he experiences them. And this is not as easy as it sounds. Even when you walk in someone’s shoes it is useful to be aware that it is your feet doing the walking. Which means that to get an appreciation for how the other experiences ‘walking in his/her shoes’ you need to have the genuine openness-willingness-curiousity-patience to walk with the other for long enough to get a feel for the others feet such that you arrive at a place where you can walk in the others shoes.

I leave you with the following quotes:

There are certain things you can only know by creating them for yourself

– Werner Erhard

That which really matters in human life can only be known through lived experience; this knowing can rarely be communicated to those who have not created this knowing for themselves through lived experience.

– maz iqbal

Make it a great week. For my part, I find it a joy to be sharing that which I share with you especially after a wonderful experiential vacation in beautiful Dubrovnik.

 

“Oh … milk!”: Is This The Solution To The Customer Interaction Puzzle?

What Occurred and the Experience of What Occurred

In the last post I shared with a customer interaction that took place at Starbucks. If you are to get value out of this conversation it is necessary for you to go and read that last post. Before we proceed, I feel compelled to issue a warning: this post is not for those whose attention span is limited to 30 seconds.

How are we to make sense of what occurred?  Let’s start with how the author (Anna Papachristos) makes sense of the interaction between her mother and the Starbuck’s barista

I’m not sure what was more baffling–the fact that no one in the coffee shop listened, or that they’ve become blissfully unaware of the basics. I understand that Starbucks stands as a status symbol more than anything, but have we really distanced ourselves from the simple things in life that badly? This barista’s mistake may have been the result of a random miscommunication, but her confusion was nothing short of hilarious.

Making Sense of This Customer Interaction: Multiple Perspectives

Two people took up my invitation, in the last post, to put intellect-expertise into action and generate-share an explanation of what occurred.  First, lets listen to Gord Demers:

I can’t help but wonder if this could be an English as a Second Language (ESL) situation were one of the parties didn’t have English as their first language…… Maybe the music was too loud and the customer spoke softly and the employee never truly heard the correct order?

James Lawther shares a different take on what occurred:

My guess, though difficult as I wasn’t there…  The barista was bored out of her mind, waiting for her shift to end and was in a world of her own. How’s that?

Finally, lets just remind ourselves as to how Don Peppers choose to interpret this interaction:

Starbucks, like the roadside diner and any other business, tries to maintain quality and control costs by standardizing processes and operations. Routine tasks, if they can’t be automated, are at least handled in the same way by every employee.

My Take On What Occurred

It occurs to me another way to look at the situation and what occurred is to make use of the insights of two philosophers: Wittgenstein and Heidegger.

Wittgenstein on Language

Let’s start with Wittgenstein and his insight into language.  Wittgenstein starts his book, Philosophical Investigations, by sharing a quotation from St Augustine in order to put on the table our taken for granted understanding of language.  This is what Wittgenstein says about this account of language:

These words, it seems to me, give us a particular picture of the essence of human language.  It is this: the individual words in language name objects—sentences are combinations of such names. In this picture of language we find the roots of the following idea: Every word has a meaning. This meaning is correlated with the word. It is the object for which the word stands.

Wittgenstein does not see language in this way.  Wittgenstein sees words and language as tools.  What kind of tools?  Social tools for social purposes in specific domains of social life:

A common summary of his argument is that meaning is use—words are not defined by reference to the objects they designate, nor by the mental representations one might associate with them, but by how they are used……

He shows how, in each case, the meaning of the word presupposes our ability to use it….

Wittgenstein’s point is not that it is impossible to define “game”, but that we don’t have a definition, and we don’t need one, because even without the definition, we use the word successfully. Everybody understands what we mean when we talk about playing a game……

Wittgenstein argues that definitions emerge from what he termed “forms of life”, roughly the culture and society in which they are used. Wittgenstein stresses the social aspects of cognition; to see how language works for most cases, we have to see how it functions in a specific social situation. It is this emphasis on becoming attentive to the social backdrop against which language is rendered intelligible that explains Wittgenstein’s elliptical comment that “If a lion could talk, we could not understand him.”

Source: Wikipedia/Philosophical Investigations

Heidegger: human being as being-in-the-world

In grappling with the question of being Heidegger chooses to look at the being who has an understanding of being: human being.  In so looking, Heidegger asserts that a human being is a being-in-the-world. It is tempting to interpret this as meaning that the world is a container, say a glass, and the human being is in the world, as water is in a glass. Wrong!  A more accurate representation is to see a tapestry and a human being is one thread in the tapestry. Notice, there is not a thread isolated from the tapestry – the two are one!

Not only is a human being a being-in-the-world, it is also so that a human being is situated within specific worlds. What kind of ‘worlds’?  The world of academia.  The world of business. The world of politics. The world of education-schooling. The world of Christianity.  The world of Islam. The world of the high-tech start up. The VC world. The world of finance …… 

What constitutes a world?  A world consists of human beings, their concerns, roles, interactions between human beings, tasks and equipment (stuff). 

“Oh … milk!”: the solution to the riddle?

In our average everydayness what is closest to us is our environment (Umwelt) in which we are caught up in our concerns and activities.

– Heidegger

Situated in a world, busy with the concerns-activities-equipment, we approach each encounter from a particular understanding. What kind of understanding?  The automatic-default understanding of a particular world.  For example, in the world of dining at restaurants you automatically ask for the bill, pay, leave a tip. Do you do the same after enjoying a delicious meal at a friends house when you have been invited as a guest?  What would happen if you did ask your hostess for a bill? Or insist on paying for the meal?  

It occurs to me that the author (Anna Papachristos) committed the same kind of blunder (asking your host for a bill at the end of the meal) when the authors mother walked into Starbucks and asked for “Milk”.  In the world of Starbucks, the world of coffee and coffee drinkers, one does not walk into a Starbucks, stand in line, get to the barista and ask for milk.

The barista is in the world of coffee and in a dance with customers who show up and ask for a coffee. In this world the request for milk is puzzling. It is nonsensical in the sense that one cannot automatically make sense of it.  How does the barista make sense of it?  Probably by looking for the coffee word that sounds closest to milk: “Mocha?”  Notice, that the barista did not get milk until the authors mother said: “No. Two percent white milk.”. What was the barista’s response? “Oh … milk!” Finally, the barista has made sense of the nonsensical request for “milk”.

What makes me confident of my interpretation?  The author writes (the bolding is my work):

This barista’s mistake may have been the result of a random miscommunication, but her confusion was nothing short of hilarious.

Yes, the barista was confused. She was as confused by the request for milk as a hostess would be by a guest’s request for a bill!

Let’s move on and consider why it is that even when the barista got the demand for milk, Starbucks delivered steamed milk and not cold milk:

Our barista proceeded to ask if we’d like the milk steamed, but we opted for cold. (They steamed it anyway.) Eventually, we managed to get our order straightened out.

Think back to Wittgenstein: the meaning of a word is the use to which it is put within a particular social world.  What is the meaning-use of the word ‘milk’ in Starbucks?  Milk that goes into coffee. What kind of milk is that? Steamed milk.  Put differently, in a game of chess ‘castle’ does not mean a castle as in a castle where a lord lives. Nor does castling in chess mean moving between castles in real life!

Why Have I Made Such An Effort With This Challenge?

Think research: how can you be sure that the question that you asked is the question that the customer answered?

Think Voice of the Customer feedback: how can you be sure that what you took the customer’s feedback to mean is what the customer meant?

Think requirements gathering: how can you be sure that you have understand the requirement that the customer is actual communicating?

Think experience design: how can you be sure that you have gotten the experience of the customer that you talking to, right now?

Lessons: 

To truly understand our fellow human beings we have to immerse ourselves in them. How? By living in their worlds. Which is why it takes a nurse to understand a nurse, a doctor to understand a doctor, a CEO to understand a CEO, a woman to understand a woman, a person with back pain to understand a person with back pain, an immigrant to understand an immigrant.

If you do want to understand another then learn from Undercover Boss.  Get out of your office.  Dive into a particular world by fulfilling a particular role in that world.  Dress for that role, train for that role. Dive into the activities that go with that role by actually doing the activities – not as a simulation but for real. And spend enough time, at least five days, living that role.

It takes a woman to understand a woman, a CEO to understand a CEO, an immigrant to understand an immigrant, a teenager to understand a teenager, a person with back pain to understand another person with back pain …….. How do you know when you have arrived at this level of understanding?  You live-breathe-speak the same language! And it speaks you.  Enough for today ..

Customer Insight & Analytics Exchange: highlights from Day 2

If your read my last post you will know that I have been participating in the Customer Insight & Analytics Exchange that took place on the 10th and 11th July in London.  In this post I want to share with you what caught my attention from Day 2.

KBC Bank: getting marketers to make good use of analytics is not that easy

This is what I took away from listening to Patrick Glenison, Head of Customer Analytics and Market Research at KBC Bank:

Marketers and marketers are not analytically oriented.   Propensity models created by the analytics team were not used by the marketers.  Furthermore, marketers and the marketing function is not analytically oriented and as such the marketing function has under invested in business intelligence tools.

The open comments, in the customer surveys, are a rich source of customer insight.  I took this to mean that the quantitative questions whilst allowing a scorecard to be put together  are not helpful in working out what is not working for customers and what changes need to be made.

The challenge is to get the various parts of the organisation – product, marketing, sales, call-centre – to play together so that there is a noticeable impact on the customer’s experience of the bank.

Westminster City Council: use insight to engage the public and manage expectations

Neil Wholey, the Head of Research and Customer Insight for Westminster left me with the following:

Benchmarking is not necessarily useful.  If your organisation does better than the average then everyone in the organisation is content and put their feet up.  If your organisation is average then just about everyone in the organisation is satisfied with that.  On the other hand, if your organisation does worse than the average then the stance is that the survey is wrong!

You can increase the satisfaction of your customers even if you cannot cut the price (taxes), cannot increase quality of services, and may have to cut services.  How? By entering into a conversation with your customers so that get a better appreciation of what you are doing and why – including the constraints that you are operating under.

An effective use of customer insight is to open up new avenues for people within the organisation to undertake operational and marketing campaigns to do new stuff or do things differently so that this impacts your customer positively and they think more of your organisation.  He gave an example: saving money by recycling.

How about engaging customers, genuinely, around stuff that matters to them like decisions around services – which should be kept, which should be cut etc?   Engagement itself is valued by customers and thus positively affects their perceptions of your organisation.  Engagement also means closing the loop: letting your customers know what you have done with their input.

Metro Bank: “Lots of people talk about customer experience, few do it”

My favourite session of the day was listening to Anthony Thomson the co-founder and Chairman of Metro Bank.  Why?  Because he illustrated that competing on the ‘customer experience’ is a business model issue.  And it involves a specific business philosophy that is embodied through a distinct set of practices.   Here are other highlights:

Metro Bank is competing on the basis of the customer experience and that means competing on convenience and service.  This convenience and service has to be paid for in some way by the customer.  And so the bargain made with the customer is that the customer gets lower rates of interest.

Convenience means being there for the customer when the customer wants you to be there.  So, Metro Bank is open when the other banks are not open – it’s opening hours are designed to suit the lives/needs of its customers. Metro Bank is open 7 days a week: from 8am to 8pm from Monday to Friday; on Saturday it is open from 8am to 6pm; and on Sunday it is open from 11am to 5pm.  More accounts are opened and business transacted when other banks are closed than when they are open!

Transparency matters.  Metro Bank does not engage in the misleading/manipulative marketing practices that the UK banks practice day in day out like offering attractive headline rates of interest and taking them away through the small print.

Metro Bank is channel agnostic.  The focus is on allowing the customer to use the channels that work best for him or her.  And to provide a great experience across any/all channels – the stores, the internet, the call-centre.

A customer can walk and open an account within 20 minutes and that includes issuing the customer with a debit card to operate the account.  For some customers this is too much, they do not believe it is possible and so they go and use it at a non Metro bank ATM to make sure that it works.  This shock is understandable because it can take up to four weeks for other banks to open an account and issue that debit card.

Great attention is given to hiring people who are a good fit with the business philosophy of Metro Bank.  People who want to and are good at generating a great customer experience.  At start-up Metro Bank interviewed 3,500 people for 60 posts.

Getting the Metro Bank customer facing staff to get that they are empowered to do what it takes to generate a great customer experience requires the Tops showing/modeling what that means.   It is not enough simply to tell them that they are empowered to deliver a great customer experience.  If that customer has clocked up a £8 parking charge as she has been in the branch for three hours what is the right course of action?  Should the teller contribute anything towards that cost?  If so then how much?  In this case the teller thought he should contribute 50% toward that parking charge.  And Anthony had to show the teller that £8 is only £8 and that the right thing was to pay for it all.

Saying no to prospective customers is part of the process – not all customers are right for Metro Bank.  Where Metro Bank is different is that the customer gets told “No” rapidly and delicately as opposed to being made to go through many loops and finding out after four weeks that the decision is no.

Members of staff are awarded £10 every time they identify a ‘stupid bank rule’.  Why?  The commitment of Metro Banks is ‘no stupid bank rules’.

And finally

I noticed several times that many (if not all) of the participants are firmly gripped by two notions:

  • that customers will take advantage of and exploit any generosity, any humanity, put forth by the enterprise; and
  • being customer-centric and doing what is right is in conflict with making money (revenues, profits, margins)

And I sense that this is the heart of the issue when it comes to the chasm between the talk and the reality.   ‘Business as usual’ means managing companies to make profit and everything else is secondary.   Whatever will help make the numbers gets done, what doesn’t gets cut.  Whereas in a genuinely customer-centric business the profit is a byproduct of everyone, including the Tops, being focussed on doing something well/great for the customer.  Think Apple, think Amazon, think John Lewis…….


Why price matters and how it is tied up with marketing, service and customer experience

In a recent post, I wrote:

“Bob Thompson shared the results of research he had been involved in some years ago.  When customers were asked what constituted ‘customer-centricity’ they came up with:  product quality/fitness for purpose; customer service excellence; being treated fairly; and price.  Bob made a big play, as do others, about price only being fourth on the list.  I will be writing a post on the price myth soon.”

Can you count on customers to tell the ‘truth’?

Before we can grapple with the ‘price is not that important, other stuff is more importantmyth we have to grapple with the customer/market research myth.   Why?  Because the people who make customer related claims – including on the matter of price – almost always refer to the results of customer surveys and market research.

Research simply discloses how a specific bunch of people responded to/answered a set of questions given the way that these questions were worded/framed and how/when the research was conducted.  ‘That is it – that is all it tells you!  You cannot use it to make declarative statements of ‘truth’ about what matters to customers nor what they actually do when they are shopping in the real life shopping environment. Even if we assume that all bias has been stripped out of the surveying/research process we are confronted with this:  people deceive themselves whilst being convinced that they are espousing the truth – neuroscience suggest that this is a fundamental feature due to the design of the brain, which is really many brains in one.

Asking about price, and how much it matters or not, is like asking about sex.  Why?  Because the question is laden with meaning which puts one’s identity, self-esteem and ‘social face’ at stake.  If you are a woman and answer that you have had many partners and love sex then you are likely to be thought of as being ‘loose’ and looked down upon.  And you, the woman that is being asked that question know that and so you modulate your answer – you lie.  Now imagine that you are a man.  How likely are you to say that you have had no sex at all in the last three months?  I recently took part in a speed awareness course where only 2 people out of 23 claimed not to be ‘better than the average driver’  Was it because most of us in that room (including me) are deluded or is it some of us were not willing to admit that we are not good drivers in front of our fellows?  Possibly and most likely both.

First the price question will be answered differently by different segments and you cannot average it out – to some people it might matter a lot, to others not at all. Second, there will be a ‘right’ answer (socially desirable) given the current circumstances – have you noticed how thrift is in and conspicuous spending out?  Third, what people say (and even think they do and what matters to them) is often very different to what is so.  And even when you educate them on what is so they tend to ignore it – they were blind to it for a very good reason.

In short,the scientifically correct thing to do is to be skeptical about what people say: you simply cannot count on human beings to have accurate insights into themselves or their behaviour.  And you cannot count on them to tell the ‘truth’ as it shows up for them if their ‘social identity’ is at stake.

What is our relationship to price?

Take a look at what is happening on the high street. We go and try out products and get advice in stores and then go home and buy it online because we can get the same product cheaper.  Is this why so many stores have closed in the UK and why high streets are littered with empty or boarded up shops?  Remember Gateway?  The  online PC seller who opened stores and designed/delivered a great shopping experience?  It ended up closing the stores.  Why?  Consumers tuned up at the stores got great advice and then they went home and bought online from Dell because Dell was cheaper.  What was the fear with the internet?  Ease of finding/comparing prices.  Why?  Because it would enable buyers to buy from the cheapest seller.  Why do offline retailers fear smartphones?  Because they enable shoppers to compare prices and either buy it online (cheaper) or head for a store down the street that supplies the same product at a cheaper price.

Look at Ryanair and Easyjet – these low cost airlines exist because they have come up with a low price value proposition for air travel that speaks to people whose first and foremost requirement is price – cheap.   Look at IKEA – it had done the same for furniture.  Then there is WalMart in the USA and Matalan in the UK – doing very well by selling merchandise at value prices.  In short these players are doing well because they are playing the price card well.

Price can also be an indicator or quality and thus assuage our concerns about being swindled/making the wrong choice.  For example, experiments show that if you have a high end product and a low end product then you can do better by introducing a ‘in between product’ in terms of price.  When you do that what happens?  You make more money because you help people to buy.  Most people will buy the ‘in between’ priced product – these people fear buying the ‘cheap’ products (quality concerns) and are not up for buying the top priced product.  Note: it is essential that the shoppers is uncertain about the quality of the products for this behaviour to show up.

What is my point of view on Price?

I say that price does matter especially in the current economic climate.   We are all sensitive to price – our sensitivity depends on our sense of our financial well being.  It depends on current savings, current income and how we see the future. If our income/savings are low then we will be price sensitive.  Last summer I spent some time in the New Forest and in particular in a locale where only the rich can afford to live – property price are high.  Yet, I was shocked to see busy ‘cheap stores’ nestled in amongst the expensive stores. Then I got that there are plenty of old folks who have retire in this locale.  They have used their savings to buy their homes and their incomes are limited and so they use the ‘cheap’ stores.  Finally, the future matters, if the future looks bleak then we are more price sensitive than if the future looks bright.

I say that we will not willingly pay more than we have to for the same product if all things are equal.  A great example of this is insurance – most people buy on price as they assume that all companies, all policies are alike.   Only those that have made a claim, become wise to and factor in what the policy covers and the claims experience.  That means that if store A wants to charge us more than Store B  for an identical product then the people at store A have to invent differences and communicate these differences so that the customer can justify paying the higher price.

The central challenge of business continues to be inventing differences – real and imagined – so as to get the customer to pay a higher price than s/he would otherwise pay.  The factors that companies have to play with are: product and product development; marketing and the art/science of impression/perception management (notice the interest in neuroscience and neuromarketing); service (not the function called Customer Services) and in its broadest/modern sense Customer Experience; and business model design – what you charge for, how you charge….  Apple does it through great products.  Zappos does it through great service. Amazon does it through the ease of the purchasing process.  USAA does it through the ‘community’ and ‘integrity’ and ‘service’.  Zane’s Cycles does it through the customer experience and ‘community’………

Put differently, the justification for investments in marketing, in service, in the customer experience are based on counteracting the buyers propensity to buy on price if all things are equal.  That means that the purpose of marketing, service, customer experience is to ensure that all things are not equal in the minds of buyers.  Manipulating perceptions – the role of marketing – used to be enough because only marketer had access to media. Media exists to shape minds – always.  Marketing no longer works that well due to the democratisation of voice. Which is why there is pressure to actually be different: stand out products; stand out service; stand out customer experience. This requires a fundamental change in organisational behaviour: investments have to move from marketing (impression management) to the product and/or the operations that enable buyers to buy, own and use the product.  Few organisations have made that shift in priorities and spending.  Which is why so much customer talk is simply empty talk.  Now compare that with the companies that stand out in terms of product-service-customer experience: do you notice that they don’t spend anywhere near as much on marketing as their competitors?

What is the good news?  Whilst price matters it is not the only thing matters.  Our dignity matters to us – we are selves who are aware of ourselves and who are driven to relate to ourselves as worthy/important/as mattering.  And this need is as important as the need for a ‘good deal’.  As such this provides an opening for organisations who honour our need for validation, for dignity, for wanting to feel there are good guys out there and that we live in a ‘good’ world.  Which is why companies like Zappos and Zane’s Cycles are doing well – they charge premium prices in turn for honouring us ‘as the best of ourselves’ .  And enough of us are willing to pay the premium price and talk about these companies as if they are our friends.  Because they show up for as being our friends.  Amongst friends, price is not the most important thing, it is trust, it is looking after one another, it is acting equitably/fairly.  It is giving a helping hand now, in the full knowledge that our friend will be there when we need that hand in return.  As and when that expectation is violated by our friend/s then we speak out – think Netflix.


VoC: what’s wrong with VoC and how do you get it right? (Part I)

I like the folks at Mindshare Technologies – specialists in customer surveys and enterprise feedback.  We share a philosophy, YOLOMAD: you only live once, make a difference.   From what I can tell they are passionate about helping companies to get access to the Voice of the Customer and use that to improve the customer experience and cultivate customer loyalty that delivers revenues and profits.

With that context in mind  reached out to Erich Dietz, VP of Business Solutions to get his view on VoC stands – the reality and not hype or commentary.  Before I do that let me tell you a little about Erich.   Mindshare started up in Nov 2002 and Erich joined in January 2003; Mindshare has over 250 clients and around 105 employees –  Erich was employee no 7.  And he runs on of the key verticals:  the contact centre vertical.  He has a degree in industrial engineering and so has a penchant for finding a better way to do stuff.  When he worked as a barman he had intimate contact with people so you could say that he understands people – perhaps better than some of us.

What’s the big issue with how companies are going about Voice of the Customer?

You may have noticed that has been a backlash about customer survey.  It appears that customers and people who write about customer related topics like customer service and customer experience have had enough – it has got to the state where requests for customer surveys are having a negative impact on the Customer Experience!

What does Erich say about that?  Erich gets the issue.  He is also clear that VoC, done right, can and does create value for customers and the enterprise – Mindshare has the data to prove it.  Which begs the question: what is the key issue with VoC?  Why are so many companies not doing it right?  Here’s what Erich says:

“No-one is really doing VoC surveys with the customer in mind!”  

By this he is pointing out the following:

1. Customers are not given an incentive to take part in the surveying process.  Put differently, the question “What would entice our customers to give up their time and provide us with valuable feedback?” is not being addressed.  Erich’s view is that a monetary incentive should be provided to kick start ‘engagement’ with the customer.

2. The customer surveys are too long, asking unnecessary questions and so asking too much of customers in terms of the effort and customer time.  I pointed out this issues in this post, ‘The Coppid Beech Hotel: are you asking the right questions?’

3. Companies are not showing customers what they are doing / have done with the feedback.  Customers want to know that they are not wasting their time providing their feedback.  Customers also want to see the changes that have been made – that their feedback can/does make an impact in the way that the company does business.  Enterprises are not providing this feedback – not at the individual customer level nor at the aggregate level – and as such not meeting a vital customer need.

Why is this happening?  What is the root cause?

OK, I get the issue now tell me what is giving rise to this behaviour? That is the question I posed and this is Erich’s answer: companies do not get VoC is about engaging customers in a meaningful dialogue (around the customer experience) and not simply surveying customers! 

This led me to ask this question, why are companies approaching VoC as customer surveying rather than a meaningful dialogue around the customer experience? Here is Erich’s answer:

1.  There is an existing strong tradition of surveying customers. This traditions comes for the marketing world – that of surveying customers and/or holding focus groups.  In both cases the research is expensive to set-up and do and so companies are intent to get the most out of this research. As such companies (and researchers) see customers as a valuable captive audience and want to get as much out of them as possible – hence the battery of questions that strive to ask about anything and everything that might be useful.

2.  There is no tradition and accepted practice around engaging in a genuine dialogue with customers.  Exploring this further, Erich and I agreed that there isn’t even any genuine dialogue within the enterprise – between the manager and the people that report into him, between colleagues, between one department and another….. In short companies run on a ‘command and control’ mode and in that mode there is no room, no space, no opening for dialogue, discussion, batting things back and forth.  In ‘command and control’ the Tops decide, the Middles relay the orders, the Bottoms execute.  And this is exactly what is happening with VoC.

Part II coming next

In Part II (coming next and soon) I will share with you Erich’s views on the second critical issue with VoC – getting value out of it!  I will close this series with Part III, where I will set out Erich’s recommendations on how to do VoC right and get value out of it.  I thank you for listening to my speaking.


Four interesting and useful perspectives on ‘Customer Insight’:

There is lots of talk about ‘customer insight’ rightly so because ‘customer insight’ is the foundation for creating value.  So let’s take a deeper look.  Before I dive in I want to make two points.  First, ‘market research’ is market research it is not necessarily ‘customer insight’.  Second,  ‘customer analytics’ is ‘customer analytics’ and not necessarily ‘customer insight’.  If you have grappled with ‘customer insight’ for long enough you will know this.   Now lets move on and explore four different perspectives related to/on ‘customer insight’

Bruce Temkin’s view

Bruce wrote an interesting post on market research. According to Bruce, market research is not generating ‘actionable customer insight’ and the few glimmers of  insight are not being acted upon.  If you read the entire post Bruce gives the impression that ‘customer insights’ are lying around just waiting to be tapped.  In his words “There’s a wealth of information available about customers beyond periodic surveys from sources like call center records, interaction data, employee feedback, and social media.” And he concludes his post by writing “The bottom line: Customer insights are an under-tapped asset”.

To sum up Bruce’s view: stop making things complicated, stop wasting money on market research (and surveys) and simple tap into the customer insights and take action.  It is as simple as that.

Dave Trott’s view

Dave Trott is an advertising guy and his blog is worth checking out because he has interesting things to say.  In this recent post (which I encourage you to read) Dave makes an interesting observation:  the disconnect between the customer and the folks in advertising and marketing seeking to influence that customer’s behaviour.  He also recognises that this does not have to be so because the folks working in advertising and marketing can step into the customer’s shoes.  Let me share Dave’s words with you (just in case you cannot get to his blog):

We work in advertising.
We work in mass communication to ordinary people.
We could choose to experience what that feels like, how it really works, anytime we want.
We could go back to being ordinary people, because we are ordinary people.
When we leave work and go into a supermarket to buy something, we aren’t marketing experts.
We’re people shopping.
We could watch ourselves from the inside.
And when we experience ourselves like ordinary people we can see how little most advertising affects our choices.
We can see how irrelevant and silly all the subtleties and details we argue about are.
But we don’t do that.
We observe ordinary people through a microscope.
As if we are scientists and they are bacteria.
We have research groups and planners to tell us how ordinary people behave, and what they think.
We have marketing people to tell us the nuances of the meanings.
We have creatives to tell us which executions will win awards and be seen as creative breakthroughs.
And all of that is an illusion.
Try an experiment.
Be an ordinary person for just a minute.
We are told everyone is exposed to 1,000 advertising messages a day.
Quick, name ten you remember from yesterday.
(Because ten would be 1% unprompted recall.)
Can’t do ten, okay name one.
(One would be 0.01% unprompted recall.)
The difficulty in remembering even a single ad from yesterday gives you an insight into the real problem.
When we are ordinary people it’s blindingly obvious.
But when we revert to being advertising experts it somehow isn’t.
So that’s the real problem.
The problem is we don’t behave like ordinary people.
So we never see the problem.

We turned off our brains when we became advertising experts.”

To sum up Dave’s view (as I understand it) is that people working in marketing and advertising are disconnected from the reality of the customer’s world.  And that getting access to the customer’s world is as simple as connecting with themselves and observing their own lives and shopping behaviour.

Mohan Sawhney’s view

Mohan Sawhney has lots of useful views on marketing, new media and technology.  This is what he says on ‘customer insight:

To create value for customers (and yourself) you need to get a better and deeper understanding of customers – ”customer insight’

‘Customer insight’ is a fresh and non-obvious understanding of customer needs, behaviour and especially frustrations.  And this understanding can become the basis of a business opportunity.

A ‘non-obvious’ way of looking is a way of looking that others have not seen or have not considered because it is counter-intuitive.  That is to say that the herd is moving in one direction and you move in the other direction.

  • One example is Sam Walton who put large stores in sparsely populated locations – the opposite of retail orthodoxy – because he ‘understood’ that the vastly improved highway system had made it easy for shoppers from the larger urban areas to travel to these stores and for the suppliers to deliver goods cheaply.
  • Another example is Steve Jobs insisting that the iMac was launched with four colours because he got that colour is a way that people express themselves and makes the computer personal.  This did not go down well with the left-brained people who could say the negatives: delayed launch, higher inventory, more pressure in forecasting etc.

‘Customer insight’ never comes from quantitative research so don’t look for it in your surveys.

‘Customer insight’ involves going deep into customer lives in a empathetic manner so that you really  get (physically and emotionally) your customer’s life and her point of view. As such ‘customer insight’ involves qualitative, exploratory, research using electic methods and empathetic design.

‘Customer insight’ often comes from anomalies.

  • He gives the example of Kodak moving into the digital camera market.  Upon studying the market Kodak learned that 75% of the analogue photos were taken by women but only 25%.  Upon studying this Kodak realised that women had 3 issues with digital cameras.  Kodak came up with the Easyshare camera and gallery to fix these 3 issues – to make the camera and the photos easy to use.

‘Customer insight’ can come from the intersection of trends.

  • He gives the example of the Apple ipod.  Apple looked at two trends: personal music (Walkman) and digital music (Napster).  By asking why the convergence of the two had not taken off Apples learned that people wanted to take all of their music with them unobtrusively and wanted a simple and legal way to download music.  This insight led to 3 innovations: size of ipod, storage (10,000 songs) and iTunes.

Let’s sum up Mohan’s view.  ‘Customer insight’ involves a “penetrating view of the obvious, looking at things differently and doing this by getting into the lives and minds of the customer.” And “it involves moving your blinders – that means walking in your customer’s shoes but first you have to take off your own!”

My view

There is ‘truth and value’ from learning and acting on each of the three perspectives (Bruce, Dave and Mohan).  To build a new business you can help yourself by listening and acting on what Mohan Sawhney has to say.  To do better marketing and advertising you can really benefit from listening to Dave Trott.  And to simply get started on improving the customer’s daily experience of doing business with your organisation – to make things easier, to take out the effort, to fix what is broken – it pays to listen to and act on what Bruce Temkin has to say.

I leave you with the following quote from a Zen master and an incredibly wise man:

“if you want the truth to stand clear for you, never be for and against. The struggle “for” and “against” is the mind’s worst disease”    — Sent-ts’an (zen master c, 700 CE)

2011: time to merge marketing and customer services?

Many years ago I worked for International Distillers & Vintners (IDV), a company that sold premium branded alcoholic drinks to the supermarkets, restaurants, clubs, cafes etc.  One of the challenges that the salesmen encountered was that almost always they were on the back foot.  As soon as they started the sales discussions (for new orders) the customer invariably brought up the issues he was experiencing with the company: not getting the products on time, receiving the wrong products, receiving the wrong quantities, pricing, discounts, billings….  This made it really difficult for the salesmen to sell.  The salesmen had to apologise and sort out the problems first and then talk about sales.  Or they had to promise to sort out the issues and offer even bigger discounts to get the customer to place the order.

It seems to me that we have arrived at the same situation in the B2C.  Anyone with access to the internet can share their views and their experiences with, and on, any organisation.  And everyone with access to the internet can read those views and experiences.  This puts the B2C marketer in the same position as the IDV salesmen.  If the marketer is going to succeed then he/she either has to sort out the customer issues or give a big discount to tempt people to buy.

Surely the sensible option is to sort out, even prevent, the issue that are resulting in poor customer experiences and a negative word of mouth.  Who has the access to this information?  Who knows what customers are ringing up about?  Who knows why they are ringing?  Who knows what business policies, practices and operations are failing the customer?  The Customer Services function.

If that is not reason enough to merge these functions and put them under one department, I can think of several more:

  • Marketing actions impact the customer and where they impact the customer negatively it is the people in customer services who get to know about it first;
  • Marketing spends considerable sums of money with market research agencies to better a better picture of customers yet the customer services function is interacting with many thousands of customers on a daily basis and can provide customer insight as well as conduct research;
  • The performance of the Customer Services function has a direct impact on the word of mouth that is taking place online and offline and WOM is marketing;
  • The new role of the Marketing function is the design and orchestration of a superior customer experience and in that role the Customer Services function plays a key role;
  • By fusing with the functions together it may encourage marketers to actually speak with real customers rather than reading about customers as abstractions in market research reports;
  • The fusion will allow the Customer Services function to escape the relentless focus on cost-cutting and making its treasure (customer insight) available to a function that has more clout; and
  • From a customer perspective it makes a difference if the left arm (Customer Services) knows what the right arm (Marketing) is up to.

In the new world, where we trust TripAdvisor more than any hotel, Marketing and Customer Services are two sides of the same coin.  When one side of the coin is ugly it really does not matter how beautiful the other side is – the coin, as a whole, is not attractive as one in which both sides are beautiful.  I am convinced that the potential for synergy – where 1+1 > 2 – is there.

What do you think?  What have I missed – apart from the fact that it is unlikely to happen any time soon?