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How CX leaders can foster a more effective customer insight culture

Too often, customer insight just confirms what was already common knowledge about the customer base. Here's how leaders can stimulate fresh thinking and help to surface fresh insights. 

25th Mar 2021
Partner Leadership Forum
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Too often the quest for truly new customer insight stops short at data analysis, often just confirming what was already fairly common knowledge about the customer base. 

So, before your customer insight team starts its next project and risks ending up with a report that elicits a response of “So what’s new?” from senior management, the team leader should begin by asking four key questions that will stimulate fresh thinking and can ultimately lead to truly breakthrough insights. 

To illustrate, let us consider these four case examples where leaders could have guided the customer insight teams to go beyond mere data analysis to discover a major change in their customer base or to identify a significant new threat or opportunity.

First challenge: Find a truly new insight

What this team had concluded:

Customer satisfaction data confirmed that customers continue to be incredibly happy with the firm’s online order system - a conclusion that was a classic example of merely descriptive customer data.

What they had missed:

While only a relatively small number of customers were ordering via the firm’s mobile app, which was poorly designed and considered cumbersome, customers were migrating fast to using the mobile app. Early indications of customers’ experience with the mobile app were negative - customers found it awkward to use and counter intuitive and were likely to become very dissatisfied.

Question #1 that a team leader should have asked before they get started:

When you conclude your data analysis, prepare to go further by asking yourselves “What new customer understanding have we reached?” The emphasis here is on new. It asks the team to build the case that supports the new understanding.

Second challenge: Identify what’s different about the new insight

What this team had concluded:

The segment of potential customers that we have studied intensively using sophisticated quantitative analysis were delighted with the firm’s new product’s functionality. These potential customers “are all about product use and application”; they want a product that works and requires minimal attention and service.

What the team had missed:

A series of in-depth interviews with a sample of the same customer segment revealed deep and persisting antagonism toward the firm’s brand. Many of them associated the brand with poor customer service and unresponsiveness to their complaints.

Question #2 that a team leader should have asked:

When you identify a truly new customer understanding, ask yourselves: “How does the new customer understanding compare to the old understanding?” In this case, the new understanding was this: Customers have deep “brand- related resistance” to purchasing from the firm - in effect, negative brand equity. The firm’s old understanding was that their superior product functionality would be sufficient to entice customers to purchase. Deliberations around the difference in understanding allows those involved to ask more penetrating questions about the data and the analysis that might otherwise be overlooked or missed entirely. For example, what data and reasoning supports or refutes the brand- related customer resistance?

Third challenge: Identify what should change

What this team had concluded:

Based on the assessments of internal customer-facing groups (marketing, product development, sales, and service), the customer insight team concluded that the variety of service types provided by the firm was the top reason customers bought from the firm rather than rivals. So strong was the conviction about this customer assessment, it was included as a customer assumption in the firm’s marketing plans.

What they had missed:

A syndicated report by a market research consultancy provided conclusive evidence that the firm’s service was ranked only 5th out of 7 providers. Furthermore, the firm’s service was not even ranked in the top three reasons noted why customers did buy from the firm. In fact, there were many comments from current customers lambasting the firm’s service.

Question #3 that a team leader should have asked:

When you reach a clear understanding of how the new understanding compares to the old understanding, ask yourselves: How does the new understanding about customers’ dissatisfaction with our service suggest a need to change our assumptions about customers and the broader marketplace? The difference in understanding often leads to the need to adopt new beliefs and assumptions about customers or to modify existing ones. In this case, the prior customer service assumption had to be eliminated and new assumptions, about why customers purchased had to be crafted.

Fourth challenge: How should the strategy change

What this team had concluded:  

In this firm that sells information technologies to small and medium-sized firms, the marketing team had determined via ongoing customer surveys that its customers’ primary need was access to state-of-the-art technologies that enabled them to continually enhance operating efficiencies and reduce overhead costs.

What they had missed:

A combination of survey and in-person interviews made clear what the marketing team had missed over the years. What managers in these small and medium-sized firms most desired was to get the responsibility for staying up to date with technology change “off their backs.” They wanted to outsource the full responsibility for identifying and installing technology upgrades rather than manage the tracking and installation of new versions of software. This discovery led to a fundamentally new understanding of customer needs, a shift from focusing almost exclusively on systems functionality to addressing customers’ service requirements and emotional need for peace of mind.

Question #4 that the team leader should have asked:

The difference between the new and old understanding should always lead to the following question: How does our new understanding make a difference to our customer-focused strategy and its execution? Asking this question brings customer analysis full circle, from data gathering to crafting insight to determining business implications. In this case, the difference in understanding caused the marketing team to shift the focus of its value proposition from operational efficiency and cost savings to creating peace of mind for owners and managers that their information technology requirements were being managed by a partner “who would stay with them every step of the way in buying and integrating information technologies into every facet of their business.” The marketing team developed a new service-oriented tag line for the firm, dramatically changed the content of its communications materials, and trained the salesforce on how to sell based on the new understanding of the customers’ needs.”

A final comment:

Leaders at every level in an organisation should begin by asking these four questions if they want to get beyond the ever-greater volumes of data and increasingly sophisticated analysis methodologies in pursuit of genuine insights about customers - that is, new understandings that will make a difference to your thinking, decision-making and action.

Rather than simply hoping that breakthrough insights will suddenly strike like lightning, you can use these initial questions and many additional techniques to attain the insights that can lead to your market leadership.

 

Dr Liam Fahey, Professor of Management Practice at Babson College USA, Cofounder of Leadership Forum and author of new book, The Insight Discipline, Emerald Publishing, £15.99

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