Knowing your customer: 7 changes we will all be part of
When was the last time you looked under the hood of your car? I’m willing to bet you it wasn’t on a random Thursday morning just because you had an itching sensation that you need to know what’s going on there. In case you ever had did have a look it was when something went wrong – the engine refused to start or sounded off or was overheating; your car just stopped in the middle of the road; or you saw a suspicious patch of oily-looking substance under it.
What crises do
That’s what crises do – they rupture the tissue of everyday life and expose what’s beneath. They draw our attention and make you look at things like you never did before. They make us ask questions on why and how are things like that. They make us explore what’s out there as opposed to exploiting what we have.
This is where the opportunity inherent in every crisis stems from. If we’ve questioned our assumptions and if the machinery of life is exposed and we have easy access to it, this also means we can improve things. And then you stich the tissue of everyday life back. What’s beneath now is likely to be different; the surface of it is also probably different; but at the end of the day, it’s a new level of regularity and we get used to it. And what happens with things we are used to? We don’t notice them anymore.
To miss an opportunity like this is to miss a chance to grow. In the memorable words of Rahm Emanuel,
“You never want a serious crisis to go to waste.” Rahm Emanuel
This is almost like once in a lifetime opportunities to do things differently, to change, to grow. In essence, crises, like pain, are a kick in the rear saying ‘Hey, there is something wrong here. Fix it, fix it.’
7 ways not to let this crisis go to waste
A crisis requires a blunt, candid look at things, and I think it’s always better to kick yourself in the rear than to wait for the kick to come from your boss or client in the form of ‘We are cutting your budget’. In what follows I offer a view on what are the benefits everyone interested in understanding customers might reap from the current situation. And by saying everyone I mean the whole ecosystem of customer insights generation – from data collection companies, through insights companies, through consultants, to client-side professionals directly involved in the process, to client-side professionals who thought that’s not important for them.
1. In praise of limitations
We are used to considering creativity as something out of the proverbial box. That’s a good metaphor as it makes us aware of how much our thought process is shaped by unconscious beliefs. What it misses is that creativity also requires constraints. If all the options are open, if you are living in a state of abundance, you are not very likely to give it your best shot. We operate best at moderate levels of challenge. In the field of customer intelligence we are likely to see a decrease in spending for gathering new data and to be frank, that’s not such a bad thing.
More data doesn’t mean better insights. We might just be better off spending a bit more time with the data we already have, interrogating it, being inquisitive about it, than going for the rather simpler solution of just throwing more data at the problem. What I think we’ll see in the future is more creative uses of the data companies already posses. Call it data re-use if you will. I anticipate that clever repurposing of the data at hand is going to be a key source of competitive advantage in a situation of limited new data influx. Think about meta analysis of the numerous studies companies already have for example; or behavioural data analytics; or making use of call center data to drive customer engagement.
To reiterate, the data in most cases is already there – we just don’t spend enough time with it and unfortunately, it’s often dispersed and hard to access. We are likely to see changes in the first, as we saw. But we are also likely to see changes in data access.
In this excellent piece in HBR, Walter Frick identifies investment in technology as one of the moves a company can make to survive a recession. It seems counter-intuitive but there are actually good reasons for that. The lower opportunity costs are one of them; perhaps less obviously,
“Technology can make your business more transparent, more flexible, and more efficient. … The second reason is that digital technology can help cut costs. Companies should prioritize “self-funding” transformation projects that pay off quickly …, such as automating tasks or adopting data-driven decision making. The third reason is that IT investments make companies more agile and therefore better able to handle the uncertainty and rapid change that come with a recession.”
As companies try to leverage these, they are also likely to get rid of obsolete or dispersed technologies. While nowadays it’s common to see bits and pieces of customer data sitting in multiple teams, the drive to transform the business through technology create a trend to centralize data management. This will in turn enable analytics at an unprecedented scale. Algorithms can already predict customer satisfaction, churn, and upsell potential for example. Fed with data with a much broader scope, these algorithms can go much further in accuracy, breadth and depth. And taps into the third shift we are likely to see.
3. Prediction goes mainstream
The desire to know the future is a fundamental human drive but we often time forget that the value of any information we acquire lies in its predictive power. We need to make sense of the world and that’s why we explore why and when and how things unfolded in the past. But the underlying drive, even when looking into the past, is to know the future with some level of certainty. It is, I think, a sin of almost any customer insights report you can find, that it doesn’t try to make predictions.
It’s difficult to make predictions, especially about the future
In times of crisis, What will our customers do next? becomes a much more salient and prominent question, and the best professionals in the customer intelligence field are likely to remember it when things ‘go back to normal’. The data is there. The data science capabilities are there. We are very well equipped to look into the future.
What we need to do is start asking slightly different questions about our customers and our marketing and CX efforts. Questions starting with What if? for example – What if we launch this product instead of the other one? What if we add this functionality? What if we send this offer to this customer? And questions that are more demanding – instead of simply explaining the past, asking What’s the implication for the future?
We also need to keep in mind that the future is not singular. Scenario-building and working with probabilities are likely to become even more vital in the future. It’s all about calculating the chances that if we do this, this is how customers will probably respond; and of course, figuring out whether the effort is justified.
As companies become more confident in their data skills and change the way they ask questions, they will likely embrace the power of predictive analytics more and more. And as they become more demanding, their suppliers will become more innovative and provide more robust and accurate answers. Customer behavior predictions will go mainstream.
The next customer intelligence trend we will explore is also related to mainstream-ization – this time driven by customers’ behavior.
4. Listen first
The fact that online shopping is booming is old news now. I wouldn’t necessarily think it will remain at its current level after the lockdown, but surely it is here to stay. Companies are rushing on the digital transformation path, and not only in customer facing domains,but in remote working and operations as well. This will further boost the growth e-commerce.
These developments will very likely result in customers sharing their thoughts online more than ever before. Word of mouth had always had a huge impact on consumer behavior and decision making – customers check what other people say about products and service, trust other people more, and are more likely to follow a recommendation to purchase from others.
Now all signs point towards online word of mouth becoming ubiquitous. It’s about time that we start taking user-generated content more seriously. People are already giving us answers to a number of the questions we would typically ask them in a survey. For example, by mining what people associate with sustainability, we informed the innovation roadmap for one of the leading beverage producers in the world. This great piece from the MIT Sloan Management Review also provides interesting suggestions how to utilize the power of user-generated content for product development.
The reality is, we can do so much more than this. We can explore people’s lifestyles, we can learn about their experiences, we can even predict if they are likely to churn just by looking at the language they use in reviews they post. Unlike any other source of customer information, user-generated content gives qualitative research type of insights at scale. It’s extremely rare to find a data source providing so rich, vivid customer stories, and the much-needed numbers at the same time.
This goes way beyond the already traditional social media listening. With advances in computer vision we will soon be able to detect what’s in a photo and analyze it automatically. We can also mine what’s available on non-social media websites. With the advent of voice assistants people will start controlling more and more devices by, well, voice. And voice data is already collected but is in my experience underutilized in contact center conversations. The technology is by and large in place. The knowledge how to analyze the data is in place. Now we need to start making the most of it because people are saying the things we want to know – we just need to listen. If we do that, we can make the most of another trend I see as defining our future as customer insights professionals – read on.
There used to be a time when running a tracking survey or doing a pulse-check by different means was enough to give you enough insights and directions. Not so long ago this began to change, as the world became more unpredictable and volatile, and a lot of companies shifted their efforts towards have an (almost) always-on solution to monitor the market. This trend is likely to accelerate and become the norm under the influence of the current crisis. I think we are realizing that unless we have an early warning system in place that flags important shifts in customer behavior and attitudes, we are not well-positioned to grow.
In the post-crisis world I invite you to explore, we will have always on systems that will become a weather-forecast of a kind, at least in their spread and use. In this world, business leaders can check immediately and at any time of the day how is their brand performing, what’s the level of customer experience their company is providing, how did their recent efforts impact customers, or any other indicator that’s important for their business.
As with most of the other trends, the technology for this is already in place, and more importantly, it’s easy to automate. These systems will be accompanied by an ability to quickly deep-dive when something out of the ordinary happens. Again, as outlined in the second point above, this is likely to be made much easier when silos preventing data access within the same company fall down.
6. At the right time
Henri Cartier-Bresson, one of the most influential photographers of all time is famous, among other things, with the concept of the ‘decisive moment’: that moment when “visual and psychological elements of people in a real life scene spontaneously and briefly come together in perfect resonance to express the essence of that situation.” Not unlike us, Cartier-Bresson was after the moment in which all elements combine for maximum impact. In a fast-paced world like ours, it is crucial to get the timing of the engagement with customers right.
A trend closely related to the ‘Always on’ one is the shift towards event-triggered research. This is again something we’ve been seeing in the last decade and is likely to get accelerated in the current business environment. The times in which we could afford to have long surveys emailed to thousands of people at random points in time are likely to be gone in a world with limited budgets. And I believe that is not only not a bad thing but something we should welcome and advocate for.
I’m not suggesting that we scrap research altogether – on the contrary, we should and will be running research (be it quantitative or qualitative one). But it’s imperative that we do it in the right moment and to take into account the situation participants are in. In a hectic everyday life, few people can answer to our questions for 15-20-30 minutes. Let’s admit it, these surveys are likely to bore us as well if we had to fill them in.
And it’s not just that – the thing is, we often ask participants to reply to questions about things that happened months ago or things they never thought about. These studies had their important role – they supplied information that fueled strategic marketing and product development decisions. If we can get this information from other sources though, it no longer makes sense to have them in their current shape and form.
What we can do instead is focus on short, in-the-moment surveys triggered by specific events. A customer visits your website? That’s an excellent moment to ask for their opinion. A customer called the call center? Keep him on the line for one more minute and understand what they think. A customer is using your product less than usual? Why don’t we email them a survey to find out why. The opportunity to do this is at our fingertips. And hopefully, this will contribute to the last trend I invite you to consider.
7. We are all in the business of understanding our customers
If there is one driver for companies successfully dealing with crisis, it’s probably this – how much respect did they pay to their customers before the crisis hit. I guess one can argue that how brands react during the times of crisis is what matters, and I have no doubt this is the case. But then again, can a company suddenly start reacting differently? Isn’t it’s behavior driven by the same principles and culture that governed it before the crisis hit? I’d rather argue that it’s the culture that existed in the company before that and in particular it’s part related to how it treated its customers is what really matters.
Recovering from a crisis is a lot about trust. With so many moving parts customers, nay, people will long for islands of stability, predictability, and safety. In a climate of plummeting customer confidence, it will take a really special brand to retain its customers and gain new ones. And that which makes a brand special is how it treats its customers, what is the experience it designs and delivers to them, is it there when they need the brand. I believe that it’s not so much about otherwise meaningful things like brand purpose. It’s about the much simple How does this brand make me feel about myself? Does it make me a better person? Does it enhance and promote what I want to be known for?
And there is no brand in the world that can deliver on these unless it acts in a coordinated and coherent manner, and with the same objective in mind. To do that, companies need to know what their customers want. I want to make explicit what’s only hinted in the last sentence – companies are people; when you shake them off all that is left is the people who made this company. I believe it is and it will be everyone’s job to know the company’s customers. This is not a one-man show and it’s not a job for a Head of CX or CMO. They can clearly add a lot of value. But in the trenches – in logistics, in marketing, in finance, in product development, in HR – you have people who need to keep their eyes on the target. If companies turn everyone into a customer evangelist, they will succeed no matter what hardships life throws at them.
My best wishes for a great day ahead!