How To Become More Customer Centric With Better Customer Research
by Jan van Veen
Customer research is an integral business practice driving improvements and adding value across an organisation. All too often however, research practices fall short of providing customer-driven insights. Results have proven time and again that there exists no correlation between customer satisfaction surveys and repurchase, yet companies continue to propel these methods. Customer metrics used by firms today tend to be rear-view mirrors reporting the past or dashboards reporting the present. Given today’s market and competitive pressures, it is imperative that businesses glean customer-centric information to really drive them forward.
According to Noventum’s Jan van Veen, companies should be developing adaptive foresights by exploring changes in their environment and by anticipating customer behaviour. Although most businesses already have raw data to hand (from research, complaints, service, account management and sales), but they need to be asking; how do they analyse that data to draw meaningful insights and how do they generate richer raw customer-driven data?
Ask yourself what type of customer research your business is conducting. If it’s customer satisfaction or loyalty surveys, they actually provide very little information towards developing adequate customer insights. Analysis reveals there exists very little correlation between satisfaction scores and re-sales. What’s more the results gleaned from these surveys are mostly circumstantial with answers dependent upon the customer’s motivation for responding (to complain or to compliment) and dependent upon who is asking the questions (a known contactor an independent third party) and dependent upon the respondent’s mood. So how can companies circumvent these disparities and what research should they conduct that is ultimately reliable?
What is Customer Insight Research?
Customer Insight Research is essentially a discovery about your customer. It is a concrete methodology which answers the question of what connects your business with your customer’s business or with his life. In contrast to a customer satisfaction survey asking about performance, Customer Insight makes relevant any knowledge about your customer’s needs, expectations, perceptions and ideas, towards the development of your business. More than just a fanciful ‘pie in the sky’ concept, it provides a concrete tangible model which, when applied systematically, can lead to innumerable new avenues for development across all aspects of your business.
The structure of an insight can be simply broken down into three steps:
1)understanding the aspiration of your client
2)clearly defining clearly the current situation
3)identifying the need gap between the two
This need gap will provide your insight and it should be identified in the language of the customer and from his perspective. The next step is to develop a promise that fulfills this need gap. You might already have a solution available or you might have to go back to the drawing board to develop a new proposition entirely. Based on this simple but concrete framework, businesses can develop multiple insights putting in place a continuing process for development across all aspects of their business, from the customer experience to product, service, operations and sales development.
A simple example might be a person’s desire to own a sports car.
The aspiration could be: ‘It would be cool to have a sporty car’
The current situation might be: ‘But I can’t afford one, and even if I could my partner might not justify the expense.’
Than the need gap could then be: ‘But this dream keeps on taunting me. I wish there was an affordable alternative’.
The insight would therefore be that there exists a desire for this product but a lack of funds. This could lead to the development of an affordable car with some of the attributes of an expensive sports car or a marketing concept addressing how to position an offering for this specific market segment.
A working case
A working B2B example is offered through our recent collaboration with a Japanese electrical engineering and software company. In essence, their customer’s aspirations were to improve the performance of their chemical plants safely, given that petrochemical plant managers tend to be resistant to change. Their situation at the time however, was that their customers did not possess the right information and insights in order to be able to do so. Their need gap was essentially to have the right information about which direction to take towards improving in a safe way.
Based on this insight, our client’s new promise was to provide their customers with adequate insights on their performance making suggestions for improvements. One of the propositions we developed based on this insight was to deliver a regular benchmark report on the performance of their customer’s petrochemical plants, suggesting improvement measures. This new offering was highly interesting for their customers executive stakeholders, who are important decision-makers within their organisation, but with whom they traditionally had little contact. By arranging for our client to visit their plant managers with benchmark information, these decisions makers were able to build a positive experience about our client and therefore improved the perception of the value they offer.
So how did Noventum Service Managementis help them do this? We processed the raw data our client already had available, but also gleaned customer-centric information using in-depth interviews with both their customers and managers. Here, the truly insightful information we gathered went far beyond the things that their customers said they needed or were even aware of. It was the intangible information we were able to glean about their customers which ultimately lead to valuable new service innovations.
There exist several methods for gathering intangible information, to include in-depth interviews, panel meetings, and other associative methods – what they all have in common is that they ask open-ended questions and that respondents are primed to encourage a mindset and atmosphere encouraging them to talk openly about what they need.
With a career spanning 20 years in service management consulting, Jan van Veen specialises in service strategy, change management, people development and benchmarking. He has been helping clients from SME’s to major global organisations create profit though their service organisations. He is currently a partner with Noventum Service Management.