The global insight research industry is enormous. In 2013, its size in terms of turnover was estimated to be over $40bn. Considering the growth trends, this is likely to have risen since then, and will undoubtedly continue to rise in the future. Lots of organisations looking to gather a lot of information.
Within the commercial research sector, what are these businesses hoping to understand about their current and potential customers? The applications for customer research are numerous, from product development to service design to marketing communications to customer satisfaction to pricing management to name but a few. The most surprising issue, however, is exactly how much customer research is used for… absolutely nothing!
Thousands of research reports and studies are commissioned every year by companies, however it is shocking how many of these end up gathering dust on office shelves or cluttering up inboxes until they become irrelevant, outdated and ultimately… thrown away or deleted.
Why so much customer research is wasted is a big subject that we will come back to. For now, suffice it to say that the fault lies with both the research firms and the client organisations. Frequently, they seek to address trivial questions and they fail to engage executives in the research process itself and the review of findings.
Customer Research – what are we trying to find out?
Customer research is a key cornerstone of any effective Customer Experience transformation activity. Without an accurate understanding of the needs and expectations of customers, an organisation cannot expect to make improvements that helps create greater satisfaction and loyalty from its customers. From a Customer Experience perspective, there are three main things that organisations are looking to understand through a combination of qualitative and quantitative research.
- Existing Customers perceptions of your current proposition
Understanding the customer’s satisfaction with the way things are right now is essential. Organisations having been running CSAT studies for decades; and in the last 10 years, other approaches such as NPS (Net Promoter Score) and CES (Customer Effort Score) have risen as challengers to the customer satisfaction crown. Organisations clearly need to be doing something with the information they gather in order to retain their current customers, however understanding the way things are right now might not always be enough…
- Consumers expectations of about benefits offered by an ideal proposition
The competitive environment is getting ever tougher. Sometimes, in order to move a business forward, a step change is required. This is often possible through innovation and invention. As conventional thinking typically won’t help companies to get there, they often need to understand customers’ expectations of an ideal proposition. By reframing the ‘Voice of the Customer’ exercise, companies are able to better understand the customer’s expectation of ‘ideal’, and then build their future product, service and channel propositions around this. This approach was followed very effectively by CP2 and middle-eastern telecommunications company Ooredoo in Kuwait, not only for the development of their future Customer Journey, but also their Promises & Commitments, which used to reposition their brand and provide context to their transformational change programme.
- Prospective customer’s expectations of your proposition
A proportion of your potential customers either buy from your competitors or buy from no-one. These people have clear reasons, either real or perceived, behind their decision-making. But before you can persuade these people that you are a better option, you need to understand their reasoning, and then either improve their proposition in line with the customer’s thinking; or – if your proposition is already more closely aligned with their needs than that of your competitors – improve your communications to persuade them that this is the case. This approach was utilised very effectively by a client in the utilities sector, not only to make improvements to their core proposition, but also to more effectively communicate the benefits of the offering, leading to a 7% increase in their sales conversion rate.
Simply put what you really want to know is:
- What are the key gaps between customers’ expectations and the company’s current performance?
- What are the ‘value drivers’ – those expectations that have the greatest impact on customers’ behaviour?
- How well is the organisation performing against the value drivers?
- How well is the competition performing?
So, if your organisation is planning a customer transformation initiative and you don’t know the answer to these questions – with some degree of rigour – then hold on tight. Your journey is going to be all the more difficult.
John Aves – Chief Executive.
If you would like to discuss any aspect of your customer experience and training strategy contact us at Johna@cp2experience.com or 07850 603 723.