Customer behaviors around the world are changing. Fast. For businesses, the risk in not keeping up is all too real.
The companies that really "get" their customers, like Apple and Amazon, are setting the standards, raising the bar high.
Because of "Uberization"—in broad terms, displacement and marginalization by nontraditional competitors—customers across all industries now have higher expectations.
As a result, staying relevant to customers is becoming increasingly difficult to achieve in a time when doing so couldn't be more critical to success.
Gradually, leaders are recognizing that relevancy demands empathy—to know customers as the real, complex, creative people they are—then instilling that empathy across the entire organization. It's why, according to a recent IBM C-suite global study, 66% of C-level execs say they plan to focus on customers as individuals rather than segments (up from 54% who said so in 2013).
But cultivating a shared understanding of customers as individuals is easier said than done, especially for multinationals with millions of customers and dozens of offices scattered across continents. It requires departments to align and pay closer attention to the people they serve. To embrace new perspectives and fresh ways of seeing the world and the business. To then internalize that knowledge and use it to act with intuition and urgency. And, it needs to happen on an ongoing basis—not on a need-to-know basis—to meet customers' needs as they change, therefore making the business more agile and adaptable.
The way most businesses are structured today, it's the market research and insights teams that are positioned to champion the customer-as-individual. Those departments are the official caretakers of consumer truths, and they are the people in the organization closest to customers.
The question is whether market research departments are empowered enough, and have the right resources for, inspiring leaders and the company culture to change.
The answer, usually, is no. Most market research departments operate as 20th century customer feedback engines, focused primarily on collecting and disseminating customer information through a well-intentioned series of disparate messages and reports. That approach rarely creates the desired impact. The empathy generated is fleeting, at best; and the drive to action stalls.
Businesses can't afford to continue to operate that way. Not when they're faced with new challenges like "Uberization"; 21st century challenges require 21st century market research.
The market research department must play a dual role: consultant and marketer, expert in both uncovering opportunities from customer stories and motivating colleagues, with clarity and simplicity, to take action. It will function with as much vigor on engaging stakeholders within the business as it does in collecting customer information from outside of it.
That change will give Market Research a permanent seat at the C-level table. It'll be held accountable by leaders to create broad customer empathy that drives growth, complete with defined goals, measurable KPIs, smart strategies, and creative tactics.
Researchers will need to update their LinkedIn profiles and resumes to match the following four business objectives of the 21st century market research department.
1. Connect the dots to bring customers to life
Ask any market researcher today, and she or he will tell you: I don't need more information, I need help synthesizing what it all means for the business. Finding value in a sea of data from various sources is difficult. And once found, it's how it's socialized that actually matters. It needs to be such a powerful and memorable narrative that it inspires decision-makers.
For example, a retail bank launched an initiative to help their employees understand different types of banking customers more intimately. After collecting data on household income, average number of credit cards, retailers frequented, and other spending and saving behaviors, the insights team brought those customers to life in a fun and creative way. It assembled individual customers' wallets (based on the bank's key customer personas), each filled with common items, like a driver's license, receipts, credit cards, loyalty rewards cards, cash, and family photos. Though the wallets weren't "real," they were tangible replicas, just about the realest window one can get into how a customer spends and saves. The wallets were shared among employees so that they could see, feel, and experience exactly who their customers are and how they manage their money.
2. Create buy-in to help others see and act on the opportunity
All the insight in the world doesn't matter if it doesn't somehow create urgency and willingness to make a meaningful change. And making that change means that everyone feels what the customer feels and understands the opportunity for the business.
For example, a major retailer had lots of data showing customers' frustrations with advertised products that were often sold out—or simply not there—by the time customers got to the store. But the data alone wasn't persuasive enough to initiate action to fix the problems. So the insights team created a documentary-style film about one woman's daily routine, highlighting the gaps in her experience and why the store's failures made her life harder. It humanized the customer's problems, leaders felt her pain immediately, and the company responded with greater urgency to fix them as a result.
3. Align priorities and departments with a clear and collective agenda
Facilitating alignment across departments can be complicated when teams are siloed and have their own priorities and perspectives based on their role and department. To create a collective agenda, you must make customers the central rallying point.
In fact, 63% of CEOs say rallying their organization around the customer is one of their top three investment priorities.
It makes sense: Customers create focus; centering work on their needs ends debate and swiftly moves solutions into action.
A great example of this comes from a major pet food and supply retailer. The company realized that pet owners were answering questions about their pets from their pet's perspective, not the owners': "Prudence loves her new grain-free wet food!" for instance, or "Rufus is such a calm pup when he's in the hands of the grooming staff." That realization led to a game-changing insight: Owners consider their pets as the customer. In-person collaboration between executives at the most senior levels and shoppers helped the company land on a guiding principle that put pets at the center of business, like stocking foods at "pet-level" or pinning the names of employee's pets to their lapels. Today, it's a pet-centric lens through which every decision by every employee—from cashiers to the marketing team to the C-level—is made.
4. Infuse a constant flow of customer empathy that affects company culture
People become fluent in a new language by immersing themselves in the culture of native speakers—not just by listening to Rosetta Stone on their commute to work. The same is true when trying to build genuine customer empathy among employees. It can't be a one-off engagement. It needs to be an immersive and ongoing experience that evolves over time, ultimately altering the company culture.
Take, for example, a well-known consumer electronics company that had enjoyed years of success when led by its product-focused engineers. But, as competition heated up, the company's growth stagnated. It wasn't until company leaders made a long-term investment in embedding customers' voices, experiences, and stories to drive strategy across divisions that the culture truly began to change. Executives and customers now regularly solve problems together in face-to-face sessions. Engineers innovate outside the box thanks to pictures and videos of the creative and unexpected ways customers use the company's products. The culture has shifted, fueled by one thing: the customer. The business is growing enormously today as a result.
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The ability to learn from customers and evolve with them is inextricably linked to a company's potential for growth. After consultant and marketer, there might be a third hat that the 21st century market researcher wears: teacher.
It's the researcher's job to shape the minds of the business so that everyone knows the rich and diverse perspectives of the customer. It's the best defense against "Uberization," and the only sustainable way companies will grow in the 21st century.