Customers are constantly “speaking” to the companies that serve them, but do they listen? Most businesses track customer satisfaction, retention, returns, etc. but they seldom listen well enough to translate patterns of customer behavior and interaction into higher levels of organization performance. Fundamentally, customer listening is good business and the companies that do it well tend to out operate, out innovate, and generally out maneuver their competition. According to a 2020 study from Aberdeen, businesses with data-driven customer success programs outperform significantly on several important measures.
However, according to HubSpot an astonishing 42% of companies don’t survey their customers or collect customer feedback. Understanding how your customers are experiencing you, your products, and your services is critical to your very survival. Interestingly, the average lifespan of companies listed in Standard & Poor’s 500 was 61 years in 1958 – today it’s less than 18 years. In our experience businesses that do survive and sustain success over many decades know their customer better than the competition. Unfortunately, most companies make simple mistakes that undermine their efforts to build this listening muscle:
These mistakes are easily corrected with the right planning and disciplined execution. Let’s talk about how your business can develop a strategic capability to give you an edge over the competition.
Running a one-time initiative will address an immediate need but the ROI on building a methodology that can be deployed and provide continuous insights is much higher and requires only incremental effort. Listening that is inconsistent or sporadic will introduce operational complexity unnecessarily. Why redo what you can build from scratch and instead put a permanent and foundational element in place on your journey to becoming a more data-driven organization. If you listen to customers by opening the door to two-way communication, it will shape and change the course of your business over time and in a very good way.
Looking at information in silos and drawing conclusions from one cause and effect relationship might be useful but will fall short of what’s possible. When you drive down the road you naturally look for and use visual (proximity of other vehicles), audio (sirens from emergency vehicles), and tactile feedback (antilock braking) that together provide a more complete view of your environment. You don’t think of these as independent inputs for action but rather collectively give you a more comprehensive understanding of what you’re facing on the road to inform how you act through multiple pathways (e.g., direction, speed, acceleration). The same concept applies here and modern analytical techniques (e.g., multivariate regression, clustering) have dramatically improved our ability to explore these more complex relationships.
Interesting information is just that, interesting. Customer listening should be designed to provide insights that inform action. Otherwise, it just becomes a check the box exercise for a few people to feel good about. As a very first step, develop a set of hypotheses that explain the factors influencing customer experience positively or negatively. Prioritize the list and determine what you hope to learn by testing each one, then simulate taking action once you have that information. Having defined the problem, you’re now in a great position to design the initiatives that will move the needle on performance.
If I had only one hour to save the world, I would spend fifty-five minutes defining
the problem, and only five minutes finding the solution. – Albert Einstein
The customer information ecosystem has become more complicated over the years. Think about every touch point you have from building awareness to closing a deal to servicing the account over time. Every point of interaction is a source of information that can be tapped for insights. All together looking across multiple systems and processes this can seem and often is overwhelming, especially when you’re just getting started. So, start simple, focus your efforts on the levers that have the greatest impact, demonstrate success, and then scale as early adopters often become your biggest supporters and internal marketers.
Information about the customer is available at every interaction between you and that account or prospect. Some of this information is captured in the CRM, some is embedded in your sales data, some in your invoicing system, etc. Customer insights are sitting hidden in call center data, phone, email, and calendar records and through extraction and analysis can reveal how different segments or types of accounts interact with staff under different scenarios. Determine the use case most important to your business and start there.
Prioritize markets and segments with the highest value or potential for your business. Talk to a sample of customers and prospects to understand what they care about and how they’ve experienced you or your business. Many companies skip this step and think they can go directly to quantitative analysis, but conversations with the customer are essential to providing the context needed to both direct analytical efforts and interpret the analysis once it’s done. Without it, insights provided to the business will almost certainly miss the mark. Think about the whole initiative as the first step towards building a replicable process that you will run continuously throughout the year. Your approach should be open minded and highly agile as you learn from each iteration.
Customer journey maps may vary by market or segment and even by behavioral characteristic. So, start with the dominant mode of interaction and the journey most typically traveled by your highest value customers. Complete this exercise in a small team where you bring together customer facing resources from different parts of the business and work collaboratively to build the journey map. The map should detail critical points of interaction with the customer making sure to represent stops along the way where brand perceptions are established, or where value is added/detracted. This visual provides a touchstone for identifying gaps or opportunities (to delight customers). These points of influence become the roadmap for where and how to intervene to enhance customer experience.
Starting with the most significant opportunities, develop a theory for how changes might translate into operational, financial, and customer outcomes. See if you can connect a bad experience with customer growth, retention, margins, etc. Sometimes the data isn’t available – that might be OK if you close that gap by developing a defensible theory that explains how these factors connect to one another. Use conservative assumptions until you’ve put the systems and processes in place to gather the data and confirm your hypothesis. At a minimum, it will give you a good rationale to support your recommendations to leadership and to secure investment for a pilot before you scale.
Use your assessment of business impact to determine which actions should be prioritized and at what level of investment. Design supporting processes to identify promptly when action is needed (speed matters) and how resources will be deployed to address the need. Determine how the outcomes you are looking for will be measured and then focus on piloting with a subset of customers. Test the system from identification, notification through action and look to refine your approach, confirm or update your understanding and evaluate the level of impact you’re having.
Listening to customers is not only good business – it’s critical to your survival. Doing it well requires a combination of qualitative and quantitative information sources focused on developing complete insights in the few areas that can provide your company with a significant competitive advantage.