7 Behaviors of Companies That Don’t Know Their Customers

Every organization, without exception, was established to provide a good or service to a customer. So why is obtaining and considering the voice of the customer—an organization’s raison d’etre—monumentally difficult for so many?

Lean management centers on developing people and improving processes to create value and prosperity while consuming the least possible resources. Creating value and prosperity is accomplished through a variety of means: better product design, better quality, better pricing, less operational waste, faster delivery, better post-sales service (often more important than product features),  and so on. But, as I described in my recent book, The Outstanding Organization, businesses must gain impeccable clarity about who their customers are and what they value. In other words, what—very specifically—are their needs and preferences? It is only by doing the heavy lifting to answer this core question that businesses have any chance at all of creating greater value and prosperity and, therefore, becoming a Lean enterprise.

For the sake of brevity, I’ll skip the discussion about first defining who one’s customers are. (But skipping the topic doesn’t diminish its importance. Some businesses are extremely clear, while others are shockingly unaware who they’re actually serving. More about this in my book.)

Time and time again when I work with clients, I find that even leaders who oversee customer service have difficulty answering basic questions about what their customers value. Why? I’ve found the answers fall into seven buckets:

1. They don’t ask.

The comic strip below (shared with permission from Gordon Pritchard) describes a shockingly common problem that typically stems from lack of interest, lack of time, fear of the truth, or lack of skill. But there’s zero chance of achieving any level of excellence if you don’t ask. Don’t ask, don’t tell, doesn’t work in life and it doesn’t work in business.

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2. They rely solely on surveys.

While surveys of any sort provide an efficient means to gather data from large numbers of people, there’s a big difference between data and information, and effectiveness trumps efficiency any day of the week. The biggest problem with surveys is that data interpretation and the resulting conclusions depend on sound surveys and survey processes to begin with—a requirement that is shockingly difficult to achieve. You need facts, not merely data points.

3. They discount the importance of qualitative data.

Getting to know one’s customers is best done in their environment, as they’re interfacing with an organization’s goods or services. Gaining a deep understanding about variation in needs and preferences is best achieved by observation and conversation, neither one of which can be accomplished via surveys. I like the term “thick data” (as opposed to “big data”), which I just learned while reading a well-written piece on the subject of qualitative data in this weekend’s Wall Street Journal.

4. They ask the wrong questions.

I recently received three customer surveys on a single day. Two of them were the wildly popular and, in my opinion, woefully ineffective Net Promoter Score (NPS) surveys that presumably measure customer loyalty.

I’ve long questioned the cause-and-effect conclusion where recommendations necessarily translate into long-term customer loyalty. The minute a better product comes along, customers flock to those products, so today’s customer mindset isn’t necessarily an accurate predictor of future success.

Even worse, customer loyalty today isn’t necessarily a strong indicator that organizations are providing high value. I’ve interfaced with many organizations who receive decent NPS scores, but have significant operational problems that frustrate customers. In nearly every case, their NPS scores provided a false sense of security to senior leaders and slowed the desire for and pace of improvement.

Don’t get me wrong. In concept, I like the simplicity of a single-question survey. But if that’s your goal, I believe the question to customers should be: “What can we do better that would improve your experience?” The answers to this question provide actionable information (which NPS lacks) and gets far closer to truly understanding customer value. The “downside”: You need to actually do something with the answers or your customers will quickly catch on that you’re merely checking a box and have no real interest in what they think.

5. They survey too much.

If I get another automated pop-up asking me to complete a customer survey, I’m going to scream. While it’s good news that seeking customer feedback is on the rise, it’s both lazy and disrespectful to program in a pop-up survey with every single interaction a customer has with a business. Nor is it wise to send an email with a survey link after each and every order a customer places.

While it’s good news that seeking customer feedback is on the rise, it’s both lazy and disrespectful to program in a pop-up survey with every single interaction a customer has with a business.

At best, survey overkill breeds cynicism (“they don’t really care about me”) and at worse it erodes the customer experience. Plus, this practice often gives skewed results that are based on someone’s tolerance level for the intrusion versus reflecting their actual customer experience.

6. They attempt to influence the results.

You either want to know the truth or you don’t. Companies that attempt to influence their ratings are better off not asking for feedback at all. It’s insulting to a customer and the resulting data may bear little resemblance to reality.

Influencing takes form in many ways from overt face-to-face begging (“please, our store will look better if you rate us a 5″) to the “casual reminder” that’s not casual at all: “When you receive the survey, we hope we’ve earned a 10, to more subtle means such as timing a survey shortly after a “good news” event.

Whether unintentional or not, pre-selecting highest ratings is a form of influencing that can cloud the truth as I experienced recently with Delta’s onboard survey, pictured below. If organizations don’t want the unvarnished truth, they should stop wasting their customers’ time.

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7. They draw the wrong conclusions.

Drawing the wrong conclusions, which can lead to poor decisions, is the greatest risk with quantitative data. A good example appears in the Lego story in the Wall Street Journal article I mentioned above. Only when Lego took the time and effort to truly get to know its customers did their business turn around. The information was clear, which resulted in better decisions, which led to better results.

If you want to get to know your customers and what they truly value, talking with them directly is the only way. Aim for getting “thick data” over “big data.” You need to hear their stories.

When you go the gemba (the real place—in this case, to the customer) and talk and observe, you get far richer information that even a well-written, well-administered survey can yield. Does it take more time and effort? Yes. But as I asserted earlier, effectiveness trumps efficiency. If you want to get to know your customers and what they truly value, talking with them directly is the only way. Aim for getting “thick data” over “big data.” You need to hear their stories.

(Note: For efficiency’s sake, email is a viable option as long as you ask well-constructed open-ended questions, you carefully analyze their responses, and you ask follow-up questions to clarify, if needed.)

 

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Image credit: loganban / 123RF Stock Photo

Editor’s Note: This article has been repurposed from The Karen Martin Group, with permission.

 

Karen Martin is the Shingo Prize winning author of The Outstanding Organization, where she addresses how companies can reduce the organizational chaos they create for themselves. She is a leading authority on business performance improvement and a highly-regarded speaker who wows her audiences with practical takeaways. After serving as the Director of Quality for a firm that managed 22 million Americans’ healthcare, and building and managing three operations with triple-digit annual growth, Karen started her own consulting firm to help businesses achieve the same levels of performance her teams were able to achieve. Karen has worked with clients in nearly every industry, including Chevron, the U.S. Navy, Franklin Templeton Investments, Hallmark Cards, Intel, Mayo Clinic, Goodwill Industries, and GlaxoSmithKline. She teaches at the University of California, San Diego and is an Industry Advisor for the University of San Diego’s Industrial and Systems Engineering program.

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