Where does your interaction with your customers begin? Is it when they see an advert in a paper or click on an e-mail, perhaps it’s when they browse the net for their next purchase, or does customer interaction start and end when they step over your threshold? If you think any of these things then your business is very much in trouble.
In truth everything you do as an organisation is part of the customer interaction process. More importantly, every decision, every action, every process should be carried out with the sole aim of providing an exceptional customer experience and building connections with customers that inform your innovation process. But this begs the question ‘how well do you know your customers’ and more importantly ‘how well do you understand your customers and their lives?’
The trouble with living in an information age, when big data abounds and surveys are only a mouse click away is that it is all too easy to confuse facts with understanding. You may know the average age, sex and spending patterns of your customer base. You may even have carried out some whizzy survey which shows how many newspapers your customer reads or whether they like indoor or outdoor pursuits. But do you really know them? How much do you really understand about the daily lives of your customers and how they interact with your product and competitors products? More importantly how far does this translate into providing different products, services and experiences, which will go over and above meeting customer needs?
With 60% of major company directors admitting their leadership teams fail to understand their customers its easy to see why there is currently a disconnect and low or little customer-driven innovation, meaning little differentiation and more perceived homogeneity.
As an aside and I’m going to be blunt here; If you value short-term income over long-term customer loyalty then don’t waste your time with innovation. Because at heart, innovation is now about delivering long-term competitive advantage through differentiated business models and exceptional customer experiences.
There needs to be a deeper understanding about what organisations ‘know’ about the world, their customers, consumers, existing and future trends and so on and I think that requires a shift from ‘Insight’ to ‘Intelligence’.
The online encyclopedia Wikipedia defines ‘insight’ as;
“the understanding of a specific cause and effect in a specific context.”
However, it defines ‘intelligence’ as;
“A capability that, among other things, involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience. It reflects a broader and deeper capability for comprehending our surroundings, catching on, making sense of things, or ‘figuring out’ what to do.”
In the bad old days if you thought about your customer at all it was to find out their habits so you could target advertising and flog them more of what they didn’t need. Knowing your customer meant know how much junk, or quasi-insurance schemes, you could add on to whatever they were buying. But, the chickens have come home to roost, the public has wised up and now people are looking for something more, they want the future, now! Unfortunately 30% of senior executives cite predicting future trends as a specific barrier to innovation. Being future-oriented requires businesses to stop thinking they ‘know’ their customers because of typical ‘insight’, and gain real ‘intelligence’ in order to stop dictating what can be bought and to start collaborating and co-creating with existing and new customers.
It’s the age-old dilemma. Do you give people what they want or what they really need? Do you satisfy whims or enrich their lives? Let’s look at one theoretical example. Say you manufacture toothpaste and want to know more about your customers. You send out surveys, you run focus groups, you may even observe as customers brush their teeth in the mornings. But all of that activity only tells you about the time when your customers are actually using your product therefore will likely only result in incremental change to that existing product. But what happens over the rest of the day? What do they eat and drink, who do they see, what environment are they in? Deeper observation and understanding may persuade you to look again and come up with a new product, which your customers can use as an adjunct to their brushing schedule whilst they are on the move? As an ex-designer myself, I can tell you that these are things that designers consider; they understand customer and consumer lifestyles and use it to inform the design process. It’s why ‘design thinking’ is rapidly becoming a significant tool in building corporate innovation capability.
But gaining a deep understanding of your customers requires a new approach. If you want to know more about the world and how to use it to create opportunities, shape markets and change the game then you need intelligence not traditional data or insight. Technology has moved on to such an extent that every organisation has access to information gathering techniques which were unheard of only a few years ago. Store card use, monitoring web interactions, social media traffic: all have the potential to help businesses to really gain intelligence about their customer base. 7-Eleven is one organisation, which is going further in its search for using new approaches to gather insights that increase its intelligence, enabling it to create differentiated opportunities and change the game.
The convenience chain has developed a customer-driven app, which is designed to drive the business to respond better to customer needs. Whilst the app does have standard features such as nearest store, it also responds to searches by products and services and allows for outside factors such as time of day or temperature.
With future developments of the app being customer driven the app already “helps people find a store, solve a problem, get a deal and talk to us.” By using technology to interact with peoples’ lives the organisation is on the pathway towards really understanding its customers as well as moving towards a more innovative and collaborative way of interacting and co-creating.
Building a deep understanding of the importance of intelligence, of truly understanding customers as opposed to knowing facts is the first step in designing a Next Generation Organisation. Organisations which strive to be exceptional, to provide the highest levels of experiences in order to differentiate themselves from the marketplace have to become intelligent before they can move in to create experiences through collaboration and adaptability. It’s not easy. The old adage that you need to walk a mile in someone’s shoes before you understand them is frankly un-ambitious. But the process starts with the desire to make a difference and with the realisation that facts or a ‘shed-load-of-data’ won’t help you to gain true understanding.
If you want to make a difference and build a Next Generation Organisation, which puts its customers at the heart of innovation, start by getting to know them better in order for them to help you co-create the products, services and experiences that they really want and that you can deliver! Real ‘intelligence’ trumps traditional insight every time and organisations need to start gathering intelligence about the world in order to truly out-innovate the competition. After all, the CIA isn’t called the Central ‘Insight’ Agency is it!
Everyone says they want or need to drive innovation-led growth but few actually do. If you want to be one of the few and you’ve got a question or you’d like to know more about becoming a Next Generation Organisation, email Cris at cris@thefutureshapers.com or browse further for more information.