Customer loyalty is a top concern for 88 percent of leaders surveyed in the KPMG CEO Outlook (2016). But just 40 percent of them currently feel their organisations are capable of “responding quickly” to emerging customer needs. This lack of responsiveness could be devastating to businesses, as customers enjoy greater choice than ever today, which is eroding loyalty (a willingness to sacrifice personal advantage) to even well-established relationships.
Agility is the new CEO buzzword - but old paradigm thinking dominates Digital platforms connect the world at virtually zero cost, yet many organisations do little more than use this to “significantly increase the number of customer segments [and] include more targeted segments.” This focus on greater “cost effectiveness” may be attractive from the CEO perspective but does little to increase loyalty from the customer perspective.
BNP Paribas Wealth Management took an approach increasingly popular amongst CEOs: they sped up product delivery; facilitating cross-silo, non-linear project work with team members “assigned to projects for two full days a week, during which they work on the project at hand only, free from the daily duties of their regular jobs.” Yet faster product delivery cycles only risk making organisations fail faster if they're not accompanied by an understanding of how these products are being experienced by customers and whether they are amplifying or dampening their brand loyalty.
No loyal customer ever left you because you weren’t quick enough to sell them a new product! Understanding how customers experience your products or services requires understanding how they make sense of the world around them. What do ‘things’ mean to them and which relationships to which things matter most? But paradoxically, if you need to ask them then you don’t have a loyalty-based relationship in the first place. For asking questions “is not really connecting. It is actually a sign that you're creating a distance between you and your target group. You wouldn’t normally ask your friend about his ‘motives’, because based on your intuitive knowledge of his needs, you would already understand them.”
In the mid-2000s Samsung and Sony battled it out for the high-end TV market. Walking into a store at this time you would have been met by screens covered in stickers listing the latest technological features inside. But something didn’t feel right to the Samsung executives. They were seeing signs of growing dissatisfaction with the added features. Customers simply didn’t seem to care! So they started to shift from an internal focus to an external one: instead of ‘how do we sell more TVs?’ they started to wonder what the experience of having a TV in the home was like for people. They became interested in the relationship potential customers had to their TVs.
So Samsung deployed anthropologists to observe how people interacted with TVs in their home. What they saw surprised them. Their big insight, from months of observations, was that a TV was not just experienced as a piece of technology, but as a piece of furniture as well. This insight - though perhaps obvious with hindsight - signalled a major breakthrough, opening the door to “redesigning its entire product line based on its new point of view.” They immersed themselves in their new philosophy; engaging Scandinavian designers - famed for functional and simple elegance - and pumped R&D money into new directions. The result was a true game changer: the flat screen LED, setting “an entirely new standard for TV design” propelling Samsung to market leader (for example, if you have a high-end TV at home today chances are it’s a Samsung).
The ‘sense-making’ journey - seeing the world through the eyes of customers - initially gained Samsung 11.3% of the TV market. Five years later that share had doubled Good market researchers have always been aware of the fact that consumers do not always say what they mean, or mean what they say. This means we need to elicit richer, more complex, emotional responses rather than just the super rationalised thinking triggered by traditional quantitative methods - for ‘reason’ alone has never been a creative power. This richer, sense-making approach, requires us to recognise that ‘meaning’ is not in the things themselves, but in customers’ relationship to them. So we must:
We, ourselves, don’t employ teams of expensive anthropologists in our global operations. Instead we deploy a tool called SenseMaker® that lets customers share their experiences of a brand in free-form ‘narratives’ (micro-stories), which they ‘tag’ (or label) to add extra layers of meaning. Visualisation technology then presents these responses en masse as patterns, clearly visible to anyone (without the need for special training). Any interesting patterns (e.g. why do we have affluent customers sharing negative experiences about service speed, what’s happening there?) can be drilled down into to get at the original underlying experiences. This lets - and forces - you to see the world as experienced by your customers, letting you make a genuine connection to them.
Seeing the world through the eyes of those that matter most to you triggers fresh insights and leads to genuine breakthrough action It has been said that you cannot understand a man until you have walked a thousand miles in his shoes. Tools such as SenseMaker® enable you to do this now, rapidly and at scale: giving the CEO who worries about customer attrition the chance to make the genuine connections that help deepen loyalty, before it’s too late.
© Narrative Insights 2013 - 2017
Part of the global Cognitive Edge & Cynefin Centre network
"It ain't what you don't know that gets you in trouble; it's what you think you know for sure that just ain't so"
- Mark Twain