Customer centricity is a buzzword to which most companies pay lip service, but few achieve. Recently, the CMO Council and SAP found that only 14 per cent of senior marketers in major companies see customer centricity as a hallmark of their company, yet nearly three quarters said it was a critical requirement for business.
According to a new IBM/Econsultancy study, customers confirm this gap between ambition and reality, revealing that an overwhelming majority of them (80 per cent) feel that the average brand doesn’t ‘get’ them as individuals.
Although businesses know that they need to change and move closer to their customers, they haven’t managed to become any less insulated from customer sentiment, and in some cases, relationships with customers have even deteriorated.
So why do companies find it so hard to home in on their customers, and what do they need to do to overcome these barriers?
Big data paralysis
Understanding the customer is the mantra of the modern business world, with organisations collecting ‘big data’ on their customers around the clock. However ‘data’ does not equal ‘insight’ and knowing ‘what’ happened in the market place does not help understand the all-important ‘why’ behind the behaviour of real people.
Another issue is that numbers are an easily malleable entity: too often data is collected, analysed, and used to justify decisions that serve the company’s interest and not necessarily the customer’s.
Building relations with real people, not data-points
Often the only experience that executives have of their customers is through sanitized slides or the occasional focus group. Most business leaders have no true relationships with any of their customers. This is a missed opportunity because listening to customers’ voices can unearth critical issues and accelerate change.
There is growing evidence showing that building relationships between brands and their customers represents a greater commercial opportunity than basing business decisions on data alone.
Key to this is bringing customers into the fold and getting them to share their perceptions, needs and intuition around the brand.
Greeting card company Hallmark realised that data would only be partially useful when making decisions on new products for its core audience. Hallmark therefore engages with a community of hundreds of 18-33 year old mums to explore what drives and affects them in their relationships with friends and family. It is these real relationships with real customers – beyond the generalised facts and averaged figures about them – that guide the brand in connecting with mums and delivering the products and services they want.
From consumer ideas to successful products
When it first launched, UK mobile operator EE worked with a group of consumers to understand what they wanted from their mobile phone provider. One idea that came out of this co-creation initiative was solving the ‘oh crap’ moment when you realise that you have lost your phone for good. What about a vending machine that spits out a ‘clone phone’ within twenty minutes? The benefit of getting a new phone quickly, with all your data and content on it, was worth paying for when replacing a phone could take weeks and cloud data storage was still fledgling. The idea become reality with an insurance proposition that promised to replace phones within two days: ‘Clone Phone’ generated 250,000 customers in the first six months at an average additional value of £10 per customer.
Toy brick maker Lego wanted to work more closely with its customers by creating Lego Ideas, an online forum where people unleash their design skills and submit their own LEGO set concepts. Besides turning into actual sales, Lego also views the initiative as a successful route to engage with customers and ‘fans’ on a one-to-one basis.
Merging insight and engagement
As these examples show, customer centricity cannot be achieved by poring over data alone. As consumers and markets change faster than ever, the companies which succeed won’t be the ones that collect the most data or ask the most questions.
The winners will be those that can establish real, long-term relationships with their customers by genuinely listening to the voices, lives, realities, and inspirations of the people they serve and by acting on what they learn from these interactions.
By Felix Koch, joint managing director at Promise Communispace.
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