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How Tuned In to your Customers Are You?

Posted by Sean Flaherty on April 22, 2016 in categoryStrategy

Customer loyalty is derived from reducing effort for your customers in ways they care about. If we care about creating loyal customers in our market, then it is an organizational imperative to uncover those subtle nuances of effort that will impact our customer’s journey. We have to figure out how to get into our customer’s heads to find that next big idea that will shake up our market. If we don’t do it, our competition will. 
 

So how do we do that? Many leaders write off customer focus groups as ineffective. Steve Jobs said:

“It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.”

How could anyone want something they’ve never seen? They can’t. That is a pretty good explanation for why most disruptive technologies are disruptive. He also famously stated:

“You can't just ask customers what they want and then try to give that to them." - Steve Jobs  

Some say that Henry Ford carried a similar belief:

"If I had asked my customers what they wanted, they would have said faster horses." - Henry Ford

A 2013 Harvard Business Review article dispelled Ford from actually making that quote but the sentiment within is spot on.

There are numerous examples of businesses making broad product or service changes based on customer surveys and focus groups that turned out to be disastrous. New Coke was a complete disaster that was based on a famous statistically significant taste test. Walmart made a $1.85B mistake by listening to customer feedback regarding their shelf space.

Great entrepreneurs understand how to serve their customers and build great products. Building great products that people will actually spend their hard earned money on comes from a combination of things that I believe most great leaders embody. The best, most successful entrepreneurs (like Steve Jobs and Henry Ford) possess:

  1. The Power of Observation. The keen ability to observe customers in real life situations and translate their needs into ideas. Tony Fadell (from Apple) says that: “The first secret of design is to notice."
  2. Empathy for Their Customer’s Pain. The ability to sense and sniff out sources of frustration. They can see things that others can’t and have the ability to identify which frustrations matter; which frustrations people are willing to pay to eliminate from their lives.
  3. A Passion for the Details. The kind of passion that is unrelenting, focused and purposeful. They recognize that nuance is the subtle difference between good enough and amazing. 
  4. A Hyper-Focus on a Purpose. They understand that people connect with products and brands for what they stand for beyond the profit that they are trying to generate and they demonstrate their purpose through their products or services.

The truth is that customers are rarely (if ever) able to articulate what they want. 

“It isn't normal to know what we want. It is a rare and difficult psychological achievement.”  - Abraham Maslow

Does that mean that we shouldn’t ask our customers for feedback? Of course we should, but at the right time and in the right context. We should listen to their feedback with the intention of understanding it. 

We desperately need to find ways that we can better observe our customers to find inspiration for micro-innovations that will move the needle on customer satisfaction, engagement and loyalty. Here are some of the ways it’s been traditionally done:

Customer Surveys.

I’m not a big fan of broad, unsolicited customer surveys for feedback, as I believe they are largely ineffective, annoying and disruptive. In fact, forced or pushed surveys actually serve as micro-experiences that bring your customers down the loyalty ladder.  Surveys can be good for dissecting the past, but there is overwhelming evidence showing that customers are poor at predicting what they will want in the future. 

If you must do surveys, keep them small and as unobtrusive as possible and don’t expect your customers to know what they want from you. Open ended questions that get at the sources of past frustration and pain are the most likely to yield insights.

Customer Focus Groups.

Customer focus groups can provide some value on their own in helping us better understand our customers, their needs, pains and concerns. However, focus groups can be very expensive and time consuming to do well. I have sat through many and have not found them to be a useful source of innovative ideas. They generally confirm for us the things that we already intuitively know. They are also always skewed because the participants are generally paid and biased in some way.

However, it can be extremely valuable to have your customers shift their perspective and work through some brainstorming exercises with your leadership team. If it’s possible to have some real, core customers involved in your workshops, do so. Their involvement is invaluable. 

Feedback.

Unsolicited customer feedback that is given during or after real transactions and touch points inside the customer journey - is gold. But, it should be received on their terms, not yours.

I am a proponent of placing a subtle feedback option on every single user interface that you build. If your customer wants to engage and give you feedback, you should passionately embrace that feedback, whether it is positive or negative. Unsolicited customer feedback is one of the most important parts of the customer loyalty equation and it should be embraced as a core pillar of your product or service innovation initiatives.

When a customer invests their personal time for the betterment of your business, you had better take it seriously and respond with passion.

  • If it’s negative, it’s an opportunity to support your brand promise, respond swiftly and prove to your customer that you care about them. Service disruptions offer the biggest opportunity for earning brand loyalty, if you are swift and effective in rectifying the situation. Recurring problems are also your prime candidates for product innovation and service improvement.
  • If it’s positive feedback, it is an opportunity to build your culture. Share the kudos internally with your team. It’s also an opportunity to recognize brand advocates in the making and figure out ways to recognize and reward them for caring about your business.
  • If it’s an idea or a request, it is simply gold.

I would argue that unsolicited customer feedback should serve as a trigger for a powerful human-to-human engagement. A personalized human touch is one of the four sources of customer loyalty and one of the more powerful ways to catapult your customers up the loyalty ladder towards brand advocacy. Treat it like gold and make sure that you build this belief system into your service culture. More specifically, make sure that your customer service staff recognizes feedback as a customer investment that should be honored. 

Don't listen to feedback with the intent to respond or react. Listen with only the intent to understand. Once you understand the feedback you are receiving and the root source of your customer’s feedback, you can form experiments to continue moving their experience forward.

Customer Observation. Direct customer observation is a great way to analyze sources of effort and frustration and to empathize with customer experience. Watching real customers in real situations, without them knowing that you are watching them is ideal and can be done with discipline to elicit some great ideas for simplification, effort reduction and handling service disruptions, but it’s not going to yield anything revolutionary without dissecting what is making the customer tick. Also, it is time consuming and difficult to obtain a broad perspective.

Competitive Analysis. While operating blindly in your market is never a good idea, you should study your competition with the intent to learn, but not copy. Your competition is always up to something and it’s important to stay on top of them, but you would much rather be the one competitors are scrambling to copy. 

Customer Communities. Keeping an eye on the social media landscape and chatter around your products and services is a great way for larger companies to extract data, identify trends and gather customer insights into the market. If you have your own customer community, you should be studying it every day and be there to respond. Dive deeper into issues or look for new ideas from your most passionate fans. If there are self-organized groups of customers out there, you need to be a part of that conversation and make those folks feel as if they are on the inside.

Analytics. Analytics are a great source of passive data that your product strategists should take very seriously. Understanding what devices and browsers your customers are using and how usage is trending is necessary for making good decisions. Understanding where your customers are when they are using your product and studying every micro-transaction - even down to the keystroke. But, studying analytics alone will not bear many new ideas.

Logs. Customer service logs, call logs, bug reports and search logs are another source of passive data that should be regularly studied for patterns by your product strategists. They should be analyzed for sources of customer effort, obvious frustrations and recurring issues which invariably lead to frustration.

Your search logs can be the lowest hanging fruit for discovering sources of user frustration. That little search box in the upper-right hand corner of your software product is generally the escape hatch for a frustrated user. It is most likely the first place they will go when they cannot find what they are looking for. Your product development team should be studying what people are searching for regularly to inspect for patterns of common frustration and repeat searches. 

User Studies. User studies are valuable for identifying nuances in your user interfaces and for testing new ideas. All of your ideas cannot possibly be great, and can always be incrementally improved. User testing is really important for validating your concepts. If you can afford it, you should be doing a lot of user studies on your products. Occasionally, user studies may even produce ideas for your products either from the users themselves or through the observation of the users during the testing. But new idea generation during user testing and user studies is rare in my opinion.

Team Surveys. Surveys to those closest to your customers, if done right, can provide micro-insights that may lead to new ideas and experiments. By this, I mean surveying your sales and customer service teams with open ended questions constructed to discover the source of your customer’s frustration and pain. The people in your organization that are most likely to interact with your customers on a regular basis are the best possible perspectives to consider because they are the closest to the action. Surveying your team costs very little and can lead to some extremely impactful insights.

Team Workshops. Your customers interact with your firm on a transactional basis. They each have one set of experiences with your firm. However, your people at the front line who interact with your customers daily represent the lowest hanging fruit for finding those micro-innovations that are going to matter. These are the people who have the deepest knowledge of where your customers are expending effort and getting frustrated. 

Tapping into their experience and knowledge with some proven tools that are designed to help you understand your customers and their needs is the best way we’ve found to derive valuable product innovations. Engaging your people to evaluate your customers from different angles and analyze your customer’s concerns is extremely valuable. 

Some research has shown that raw, unfocused brainstorming yields few, if any, new ideas. In fact, the same group of people is often better off working independently than working within a larger group to brainstorm. However, this is likely due to political tension, unrecognized fear or even worse, workplace malaise. A good facilitator can help your team to create a safe and fun environment to overcome these challenges and create a path forward.

Momentum is extremely valuable with your software products and once it starts, it’s difficult to slow down. Help your teams create a vision and roadmap together and you will have the alignment and motivation needed to overcome any organizational resistance that may have previously plagued your product.

Sources:
Blink by Malcolm Gladwell: http://uxmyths.com/post/746610684/myth-21-people-can-tell-you-what-they-want
Tony Fadell video: http://www.ted.com/talks/tony_fadell_the_first_secret_of_design_is_noticing#t-751401
Steve Jobs quote:  http://www.inc.com/magazine/19890401/5602.html
Henry Ford Quote:  https://hbr.org/2011/08/henry-ford-never-said-the-fast
New Coke:  http://www.qualtrics.com/blog/coca-cola-market-research/
Walmart:  http://goodexperience.com/blog/2011/04/ignore-the-customer-e.php
The Brainstorming Myth:Furnham, Adrian






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