Long-term declines in many industries have forced companies to make fundamental changes in how they understand, anticipate, and partner with their customers. However, many companies are mistaking frenzy for change and "more of the same" for innovation, as is evidenced by continual churn, reorgs, and the continued failure rate of new products.
Moreover, the "sharing economy," with its upstart business models like those pioneered by Uber and AirBnB, is only increasing the frenzy. But a frenzied organization isn't a nimble one.
What companies really need to survive and prosper in this increasingly dynamic, interdependent business environment is agility. But fast, effective, incremental action in response to changing conditions is only possible when enabled by intuition, a well-developed "gut feeling" about what will anger, delight, and motivate the people a business is trying to serve.
Psychologist Gary Klein defines intuition as "a pattern-matching process, a means by which we use previous experiences to categorize and interpret unfolding events."
Think about shopping for your child or spouse, recommending a movie, or listening to your lightning-fast internal dialogue as you decide what (or what not) to say.
In all those cases, you know what your loved one is going to value or hate, or welcome or dismiss. You don't need a study or quantitative evidence. You trust your gut, based on long, intimate interpersonal experience.
Now think about how the market-research or consumer-insights function within businesses has typically been tasked with helping companies understand their customers. You can see how traditional research methods can pit the means against the end.
Intuition is essentially "System 1" thinking, internalized knowledge that we act on almost unconsciously and with lightning-fast speed.
In contrast, "data" and "models" imply objectivity and suggest some judgment above the din of human beings just trying to figure stuff out. Data or models take long to acquire, interpret, and derive some of their credibility from those very attributes.
It's understandable that we turn to data drawn from outside of our own experience when trying to make decisions with big dollars and personal careers at stake. Having numbers to point to makes us feel safer, and sometimes it should. But even when the numbers say "go," the sad fact is that 85% of all new products fail.
So what if we turn that data-driven paradigm on its head? How can we drive innovation and derive comfort from the human intuition borne of customer closeness as well as from statistical probability?
An Example of Empathy-Driven customer experience
Rental car companies are generally not known for their innovation or customer experience. And newer entrants to the rental car fray like ZipCar make it easy for rental car brands to enter into frenzied push for change.
One car rental company has figured out how to avoid frenzy and instead drive incremental innovation by putting customers at the center of everything it does. National Car Rental has long prided itself on its dedication to customer-centricity. It's a philosophy that touches every part of the organization, from technology to marketing to customer interactions.
For National Car, building an award-winning customer experience starts not with data but with collaborating with and listening to customers. Since 2010, frequent travelers have made their voices heard in a private, online community, where members share ideas, offer valuable feedback, and discuss with National and each other how to enhance the customer experience at every touchpoint. So whether that means co-creating an innovative mobile app that streamlines the car rental process or designing a service that allows customers to bypass the counter and head straight to the lot to select their car, customers are driving the experience they want from National.
"I like to talk about the members of our communities as the eyes and ears of my team," says Carol Jones, director of Insights & Intelligence for Enterprise Holdings, National Car's parent company. "Often, when we don't have the bandwidth to get out and visit these locations—these airports—we send our community members out, and they come back to us with photos and videos and narratives about what they've seen and what they've experienced. So they really are an extension of our department, and they are really good at what they do."
For National, intuition drives innovation. Making customers members of their team has enabled the company to develop the agility needed to thrive in a changing marketplace.
Bringing Consumers to Life Within the Organization
For a brand like Hallmark (which is rooted in the business of emotion), intuition and empathy are key to driving its success.
Employees are tasked with continually creating new products that connect emotionally with their customers. The company needs to have an ongoing emotional connection with customers so that it can quickly decide what kinds of products and messaging to create.
Data alone isn't sufficient to reveal how a mom thinks about her relationship with her parents or what keeps her up at night or how her kids secretly play with new toys.
To build and sustain its customer "gut," Hallmark engages with a community of hundreds of Millennial-aged mothers to explore and celebrate the moments of motherhood, daughterhood, and friendship that make life special. These real relationships with real mothers—beyond the generalized facts and figures about them—guide the brand in making authentic connections and delivering the products and services moms want.
To infuse that consumer presence throughout the company, Hallmark's consumer insights team builds immersive experiences like art exhibits in its headquarters to bring customers to life and build empathy and intuition among its employees.
In today's analytical and data-rich world, it's easy to lose sight of the people behind the data points. But the most innovative companies are also some of the most intuitive.
Consider a business like Virgin Atlantic, the only airline based out of Silicon Valley, which prides itself on operating like an incubator. Its focus on incremental innovation has paid off, with a 2014 revenue of close to $1.5 billion and customers who feel at the center of the company's business.
Virgin, like National and Hallmark, relies on close ties with its consumers to fuel its intuition. Virgin developed VX Next, a community of 30 entrepreneurs who are also frequent flyers, to collaborate on new ideas for the airline. They developed the idea of Virgin's in-flight social network, co-creating an app that connects flyers with fellow flyers.
Virgin's close ties to its customers have paid off in other ways. Some 30,000 Virgin-fanatics signed a Change.org petition to secure two gates for the airline at Dallas Love Field Airport.
* * *
In an age of consumer empowerment, the key to long-term success doesn't lie solely in maximizing shareholder value but in recognizing a company's interdependence with customers, suppliers, and distributors, and focusing on stakeholder value.
What will delight and inspire? That knowledge, which over time becomes internalized as intuition, can only be developed through ongoing, transparent relationships and trust between companies and the people they serve.
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