Innovation Requires Real Customer Understanding

So, what do you know about your customers? Sure, you may have some quite sophisticated statistical analysis program that combines sales and store card data in order to track spending patterns for example, but in reality, how much does that actually help you to really understand your customers?

Let me say at the outset that there is nothing wrong in data gathering, but statistics are only as good as the person who is asking the questions. After all, knowing that customer A buys five extra bottles of milk on a Thursday may help with ordering and stock management, but does it really help you to interact and provide added value for your customer? The reality is that even a simple understanding of what they are using the extra milk for and why on a Thursday could bring some important cross selling opportunities, help generate some extra goodwill or more importantly, help you understand where there’s a problem or opportunity to focus your innovation efforts on.

For example, if the milk was being used as part of a volunteer session at a local junior sports club then is there an opportunity to offer a local club discount or to make a donation in kind at a sports day. Perhaps one or two of your employees might like to volunteer or perhaps you might be able to offer a bag packing session to help to raise money for the club. And then of course there are all the cross selling opportunities which could be provided if you understood the nature of the club and its requirements.

That’s one very simple example but it does help to illustrate the difference between having statistics and really understanding the customer. So you’d think therefore that building customer understanding is a business imperative and yet 60% of major UK business leaders admit their senior teams fail to understand their customers. It’s hardly surprising therefore that a culture of innovation is increasingly becoming not just an imperative for business but the imperative for business with a Wazoku innovation report revealing that 90% of respondents saw innovation as a way to improve the customer experience.

Really understanding the customer starts with the change of attitude and that change has to be evidenced throughout the organisation. Your customers aren’t simply ‘people’ that buy your products, they’re a valuable element of the organisational team, they should be considered partners. However, shifting an organisation towards a culture of innovation-focused customer interaction may well require more than a simple change of attitude but also of process, procedure and training.

For example, building customer understanding may well require you to build a measure of rapport with your customer and that isn’t going to be done if your employees are either targeted to answer queries in the shortest possible time or haven’t been trained to communicate really well. After all, any customer faced with an officious or sullen employee isn’t likely to divulge extraneous information.

So any organisation that wants to build a culture of customer inclusivity or more importantly, customer-led innovation needs to work with its employees to build the right attitude, ethos and approach. Naturally that starts with appointing the right employees in the first place, but it also requires training in communication, understanding and questioning skills, alongside telephone and face-to-face interview techniques and the crucial, design thinking component of empathy. More than that, it requires a resetting of organisational structure and expectations to ensure that everyone, customer facing or not, considers the customer outcome in their every decision and action. Ultimately, that’s when you’ll be on your way to becoming an innovation-led organisation.

In January 2015 the Institute of Customer Service reported that the UK’s customer satisfaction index reflected profound shifts in the market environment with customer expectations evolving rapidly. This reflects an earlier report from illumiti in 2013 in which 47% of businesses put shifting customer expectations as being the trend which most affected their business. However, statistics will only go so far and whilst they may a guide to past performance they cannot accurately reflect future trends. It is only when businesses ally statistics gathered to a culture of customer understanding which looks to develop deep insight and intelligence that a game changing shift in the customer relationship can take place. Do you understand your customer dimension? Perhaps it’s time you did!