Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
– T.S. Eliot
How much do you know about your customers? Before you answer let me rephrase the question; how much do you really know about your customers? Do you collaborate with them, interact with them regularly, network with them, observe them, collect lots of data about them, apply the 80/20 rule or not really care as long as they are buying your products?
In an era of Big Data it is easy to think that we really know our customers when all we have is statistics. So we are beguiled into thinking that information equals knowledge, and that knowledge of facts is all we need.
I’m not completely against the gathering of sales and store card information, the collating of statistics on buying patterns, or even those handy little surveys which pop-up on websites on a regular basis. But in too many instances these are seen as the end of the customer information process, rather than part of a much more comprehensive mix.
Ironically, in gathering all this data we are essentially looking to replicate the in-depth knowledge of customers that we once took for granted. Go back to the time of the butcher, the baker, and even the local candlestick maker and there was no need to gather data on your customers because you already knew everything about their lives. More importantly, you knew how changes in patterns of living, the arrival of visitors, a short holiday or an illness would affect their requirements and you could generally prepare in advance to meet changing needs.
So there was little need to gather data because the relationship was very personal. Move forward to the advent of computers and the personal became replaced by the fact. But facts don’t tell the whole story and can therefore lead to a disconnect between customer and business. Facts and data tend to tell you what but rarely why; and for innovation, it’s the why that’s crucial.
A colleague still recalls an early ‘know your customer’ initiative run by one bank in which employees were rewarded for noting down scraps of information about customers. The feeling was that although bank staff knew their customers, the computers (and therefore by extension, head office) didn’t. The initiative therefore transferred information up the line, with sales targets being sent down in return which seemed to be based on volume rather than customer need.
Admittedly that was a very early example and data gathering has become far more sophisticated, but there is still the danger of a disconnect between impersonal assumptions and genuine customer needs. Why does this matter? Well that technological age which enables us to gather lots of data has also ushered in an increasingly homogenous era. When product development can be shared across the globe at the flick of a switch, when small and large businesses can compete equally on the digital stage, increasingly the only differentiator is the ‘how’ rather than the ‘what’.
And if you don’t really know and understand your customer you aren’t going to be able to devise the sort of product experience which will capture imaginations. And if you can’t do that, you certainly aren’t going to be able to deliver new business models through strategic innovation.
In fact, developing genuine customer understanding (intelligence) is one of the core strategic pillars of what I call Next Generation Organisations. These are businesses which understand that the future will not be delivered through existing ways of working and which have taken the decision to build a culture of innovation which sets intelligence, collaboration and adaptability at its heart. We’ll look at collaboration and adaptability in the next two articles in this series.
But if you’re not entirely convinced by the merits of creating lasting transformation through innovation, you may wish to glance at PwC’s 2017 global CEO survey which revealed that innovation was the number one area CEOs most wanted to strengthen in order to capitalise on new opportunities.
These Next Generation Organisation attributes have their roots in design thinking which also puts people at heart of the process. For example, they tie in with the Design Council’s double diamond approach to design which starts with ‘discover’. So it’s no coincidence that human-centric design has become so prominent in recent times.
Next Generation Organisations have taken the decision to build a culture of innovation which sets intelligence, collaboration and adaptability at its heart.
As any designer will tell you, 99% of the solution is the brief and that brief has to be founded on genuine customer understanding. And if you need any more convincing, the Design Management Institute recently released data demonstrating that design-led organisations outperformed the S&P by 211% over 10 years. Proving that innovation is critical if you want to drive growth.
So how do we build genuine customer intelligence?
Well part of the solution is to build a more collaborative model which brings customers into the mix and I’ll cover that in the next article in this series. But businesses which are serious about delivering customer-centric, innovative products, services and experiences would do well to remember that there are more than four ‘W questions’. Big Data will deliver the what, who, when and where answers. Going to the next level also requires the asking of the ‘how’ and ‘why’ questions as well as developing an understanding of ‘what if’.
As the father of two young daughters I’d recommend that you take a leaf out of the children’s book of questioning if you want to develop true customer insight. Forget the fact that the sky is up there and it is coloured blue and instead start asking how far up there is it, when does it stop being the air we breathe and start being sky, when does it stop being sky and start being space, why is it blue in the day and black at night, what can we use the sky for, how does it affect rain and temperature and how I feel?
It is only when we start to delve beneath the statistics that we can really start to gain a true understanding of our customers. And it is only when we really start to understand and empathise with our customers that we can begin to imagine products, services and experiences which won’t just meet their needs but will ‘wow’ them. That’s what innovation is truly about, not just inventing new stuff but looking to solve a genuine problem, which adds real value to the customer and drives growth for the creator.
How much do you really know about your customers? While you think on that I’ll leave you with two quotes from Albert Einstein, who you may perhaps think would deal in absolutes but who understood the importance of questioning and building understanding.
“Imagination is more important than knowledge.“
“The important thing is not to stop questioning. Curiosity has its own reason for existing.”