Let’s face it: it’s no longer just a good idea or a nice gesture to listen to your consumers: If you don’t, someone else will. Anyone who gets a thrill out of statistics will know that there are thousands out there about the importance of customer satisfaction for business success. Here are three juicy ones* that should have us focussing on customer experience, or CX:
- Good CX accounts for only 45% of customer retention – customers stay for products they love, among other things – but poor CX accounts for 85-95% of customer churn
- The cost of getting new customers is 6-7 times higher than keeping existing ones
- Increasing customer retention rates by 5% could increase profits from 25% to 95%
*I haven’t included a source for these stats – they are ubiquitous, along with an army of equally unsettling ones.
We are not our consumers
Not listening to your customers means you are making important business decisions based on your own assumptions, which are based on your own experiences, which are likely to be quite removed from the experiences of your customers. How can you be in touch with what people want, need or care about?
Consumers today are spoilt: we want choice, flexibility, customised offerings – and we want them now. We want to feel that we are giving our money to someone who deserves it – someone who is making our and others’ lives better. And how are businesses to do that if they don’t ask the market, How are you? What’s happening in your world? What’s important to you right now? How can we help you to achieve your objectives?
If we think we can go on making business decisions as we always have – by sitting a small team in a room and coming to conclusions based purely on our expertise and inspiration – we are not going to last, even though we know what we’re doing and we’ve always done it this way; even if we have been highly successful making decisions based on our own brilliance up to now. Things have changed. Businesses need to change, too.
Listen or become obsolete.
What we stand to gain by listening: the competitive edge
It’s something we really don’t want to do: listen. We’re not good at it; we don’t have the time or the budget; people don’t know what they want, so why ask them? But if we ask and listen, we get to improve our offering and at the same time build and grow our relationship with our market – they see that we are listening, and they appreciate that. It’s not about always getting it right; it’s about communicating and making an effort, like good humans should.
The standard of service in restaurants in South Africa is above average. When I go to a restaurant, I know I’m expected to tip, and I generally feel it’s deserved. We really do have great waitrons in this country. But I am much more likely to tip heavily a waitron who is friendly and lets me know what’s going on – even if they make mistakes – than one who is perfectly efficient but cold. I want the human element in my interaction with the brand. And make no mistake: that waitron is my interaction with the brand, or at least a huge part of it. So stuff it up, but smile and tell me that you’ve stuffed it up, and let me decide what I want to do about it.
Listening to your market and implementing the feedback you get gives you the opportunity to get ahead of your competitors because you have the inside scoop – you heard it from the horse’s mouth (and other such idioms). It’s like a shortcut: you find out what people need, and you give it to them. It’s obvious! And if you do it well, you can bet you’re doing it better than your competition.
Anyone can know the what – the advantage is knowing the why
There’s a massive and justified leaning towards mining mountains of quantitative data to find out about consumer behaviour. This is understandable: technology has made it so easy to mine. But the what – the figures we get – from quantitative data is useless without the why. Knowing the what means you can put more of something out there, but if you don’t know the why, you won’t know why it works or doesn’t, and then it’s back to the drawing board. The why gives you the edge; it gives you the wisdom to decide what to do when x doesn’t work. The why is about emotional and social motivations, not just functional – and believe me, decisions to purchase go way beyond the functional. Knowing the why is what will give you the competitive advantage.
Sure, it’s not as easy as just asking people what they want. At Tenaka part of our job is listening to and understanding our clients’ customers/consumers/end users/most valued humans. It’s true: people don’t know what they want. You have to carefully construct questions and use cleverly designed methods to get to the bottom of what makes people tick. You have to really listen and empathise with a person, leaving your own prejudices and lenses at the door. Then, you have to identify common themes that come up across your data and establish the real issues. From these issues – the real gold – you can uncover your business opportunities to design something that makes a difference; something people want; something that makes lives better.