Why Customer Insight is So Elusive

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The holy grail of many organisations is to be so close to the customer that they truly understand the “world of the customer” (not just the “voice of the customer” – VoC) and all the ways the customer uses their products and services, what they appreciate, what frustrates them, and what they need.  Having such customer insight would allow an organisation to design, produce and deliver their products and services to fulfil those hoy grailneeds better than their competitors.

And I say Holy Grail because very few companies achieve anything close to understanding the world of the customer. One of the biggest mistakes many companies make is the belief that they need a large amount of data that can be retrieved easily and used for customer service purposes as well as analysis for trends, etc.

Enter the world of CRM, short for Customer Relationship Management.  In my mind, trying to understand your customers using a computer and data points is akin to trying to understand your girlfriend (or boyfriend) based on your cumulative experience and data from previous romantic relationships. A certain recipe for relationship disaster!

There is much more to understanding the customer than large amounts of survey data. This week I am sitting in an executive meeting for a heavy equipment manufacturing and sales company in Lugano, Switzerland (okay, not a bad place to be in June) where the response to the leader’s questions of “tell me about your 10 best customers” goes something like, “we need to do more market research”.  At this point the leader explodes in a tirade about knowing the customer vs having data on the customer!

Here are two good examples:

To help design their mini-van and other family focused vehicles, Toyota sent individuals into the homes of families to live with them, 24/7 for a week at a time. They observed the hectic morning dash to school, the frantic grocery shopping trips, the difficulties getting baby buggies in and out.  Real life, not survey questions and data points. Their new designs added in these real life customer insights and created very popular vehicles which sold well, mostly by one family telling another.

I go to a certain restaurant regularly.  I like the food and the owners.  They know where I like to sit, how I like to be served, whether I want coffee with desert or after.  How I like my salad dressing, the type of wines I prefer. I am fully satisfied with my dining experience every time.  They have hundreds of customers like me, and don’t have a CRM system!  They have something better; owners and managers who really care about servicing their customers as people, not data points.

For any business to win with customers, they have to really care! All the rest is added value, but without executives and managers and employees who really care about their customers, nothing else will work.

My experience is that CRM systems do two negative things when overly relied upon. One, they distance executives and managers from real customers (people) and mostly give aggregated, average trends, and I have never met an average customer!

Second, they are an easy excuse for lazy leadership and weak management skills. “We don’t have enough data in the system yet to give you an answer! IT bought a lousy CRM system and it’s too complicated to use! All the functionality isn’t up and running yet!  The average customer prefers . . .. “

As my client screams at his team, “Get out from behind your desk and computer and get into the field to talk to customers. And I mean everyone.  Finance should be meeting customers regularly. HR should go out on customer calls. Engineers should be with customers regularly.”

That’s how you gain real customer insight, not through a mass of ones and zeros.  A handshake is more important than a log-in!

Written and Posted by: John R. Childress

Senior Executive Advisor on Leadership, Culture and Strategy Execution Issues,
Business Author and Advisor to CEOs
Visiting Professor, IE Business School, Madrid

e: john@johnrchildress.com
Twitter @bizjrchildress

Read John’s blog,  Business Books Website

On Amazon: LEVERAGE: The CEO’s Guide to Corporate Culture

Read  The Economist review of LEVERAGE
Also on Amazon:   FASTBREAK: The CEO’s Guide to Strategy Execution

John also writes thriller novels!

About johnrchildress

John Childress is currently Visiting Professor in Strategy and Culture at IE Business School in Madrid and a pioneer in the field of strategy execution, culture change, executive leadership and organization effectiveness, author of several books and numerous articles on leadership, an effective public speaker and workshop facilitator for Boards and senior executive teams. In 1978 John co-founded The Senn-Delaney Leadership Consulting Group, the first international consulting firm to focus exclusively on culture change, leadership development and senior team alignment. Between 1978 and 2000 he served as its President and CEO and guided the international expansion of the company. His work with senior leadership teams has included companies in crisis (GPU Nuclear – owner of the Three Mile Island Nuclear Plants following the accident), deregulated industries (natural gas pipelines, telecommunications and the breakup of The Bell Telephone Companies), mergers and acquisitions and classic business turnaround scenarios with global organizations from the Fortune 500 and FTSE 250 ranks. He has designed and conducted consulting engagements in the US, UK, Europe, Middle East, Africa, China and Asia. Currently John is an independent advisor to CEO’s, Boards, management teams and organisations on strategy execution, corporate culture, leadership team effectiveness, business performance and executive development. John was born in the Cascade Mountains of Oregon and eventually moved to Carmel Highlands, California during most of his business career. John is a Phi Beta Kappa scholar with a BA degree (Magna cum Laude) from the University of California, a Masters Degree from Harvard University and was a PhD candidate at the University of Hawaii before deciding on a career as a business entrepreneur in the mid-70s. In 1968-69 he attended the American University of Beirut and it was there that his interest in cultures, leadership and group dynamics began to take shape. John Childress resides in London and the south of France with his family and is an avid flyfisherman, with recent trips to Alaska, the Amazon River, Tierra del Fuego, and Kamchatka in the far east of Russia. He is a trustee for Young Virtuosi, a foundation to support talented young musicians. You can reach John at john@johnrchildress.com or john.childress@theprincipiagroup.com
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