Customer Understanding

POV: On customer understanding

Traditionally, business has been all about capitalising on serendipitous market opportunities. It’s been like this for a very long time: build it and they will come.

However, today’s most accomplished business leaders quote customer obsession as the most important factors of their company’s success.

There are many ways to center a business. […] But in my view, obsessive customer focus is by far the most protective of Day 1 vitality. – Jeff Bezos

Your most unhappy customers are your greatest source of learning – Bill Gates

You’ve got to start with the customer experience and work your way back to technology – Steve Jobs

This is a bit of a flip of the traditional model: instead of looking for market opportunities you create new ones. It starts by solving unmet needs or bringing about significant improvements to the customers’ lives even before people realise they need or want them. This can sometimes lead to inventing whole new categories and even new markets, changing the market dynamics in the process.

Customer-obsession is a new way of looking at business: solve for the customer needs and success will follow.

What changed?

Because of its complicated (and rather ‘soft’) nature, customer understanding has always been seen more as a theoretical thing. But the proliferation of data-driven technology has made building an accurate picture of customer needs, wants and expectations very straightforward. This changed the game completely.

Those who have cracked it are still reaping the benefits and will probably keep doing this.

How is customer understanding done right?

It starts with two things:

  1. acknowledging that data and the customer are both sides of the same coin
  2. asking the right questions

First, we need to understand what sources of data are available; what additional sources of data can we tap into; what other types of data (previously not considered) could be useful. Then we need to connect and bring them all together so they become information that we can start learning from.

At the same time we need to approach things from the other end: who is the (potential) customer?

If available, we look at existing customers and ask: what is the profile of our biggest segment; who are our most valuable customers; who are the outliers/anomalies?

We then look at non-customers and ask: who are the customers of our competitors; who is not using our product/service and why; are they using something different; do they even know a solution exists?

Tie it all together and a clear picture starts to emerge: understanding of the customer needs, wants and expectations as well as where they stand in their decision-making process, i.e. how ready they are to buy your product/service. Not to forget that sometimes they might not even know they are looking for a solution.

Armed with this understanding you can start thinking about how to approach the problem based on where the business is on its journey: creating relevant products/services, designing the brand experience, articulating the go to market proposition or setting up the right communication channels and strategies.

‘Experts’ assume, data reflects reality

There is no more need for assumptions, data can now lead to clear, coherent and actionable insights. Ask the right question, gather the right data (both quant and qual), connect the dots and you can now solve for the customer, rather than for volatile market opportunities.

Solving for the customer need leads to the right briefs and the right briefs lead to the right solutions. Always start here to set the business up for sustainable success.