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Real customer insight can't be gained
through traditional channels. Do you know enough about
your customers, prospects, and the marketplace to bet
your company's future on this knowledge? Most every
company solicits feedback from its customers in some form
or another, be it modification requests, sales visits, or
customer service requests. Given the types of feedback I've
seen companies collect, very few should take that risk
Consider the sources of as well as the type
of data gathered from customers. A modification request
typically comes through the customer support organization
where 1 or more levels of support staff may have dealt with
an issue and decided the requested feature or a workaround
for a problem does not exist. In many organizations these
lists of modifications are triaged by a team composed of
support, product management, and engineering, who prioritize
the modification request. The problem may then be resolved
"in the order the call was received."
The biggest problems with this model are
threefold. First, a majority of customer issues are either
never reported or never escalated beyond front-line support.
A survey conducted by TARP indicated that a maximum of 75%
of B2B customers complain to a vendor. Less than 10% of
these complaints are escalated to headquarters. Second,
the input is short-term, typically used within the immediate
or next revision. Finally, non-product issues are filtered
out and go untreated. Of the 75% who complain to a vendor,
only about 10% will complain of mistreatment. Ultimately,
they show their dissatisfaction by walking out the door.
According to the same study, companies could have prevented
nearly 40% of customer defections.
Sales visits may at one time have been hugely
informative, but in my experience the sales person is going
to bring back the feedback that helps them close deals and
make their quota.
Mid- to long-term, directional insight into
customer environment, needs, and future plans cannot be
derived from these limited input channels. As a result,
companies cannot accurately anticipate customer's needs,
which increases the risk of competitive disruptions.
In this age of hyper-competitiveness where
any feature or service-based differentiator is easily duplicated,
in-depth customer understanding is fast becoming
the only truly sustainable competitive advantage.
To succeed, you must know your customers better perhaps
than they even know themselves.
True Customer Insight Is Best Gathered
Face-to-Face
There are many technological ways to purportedly get to
know your customers, but none compare with the traditional,
old-fashioned, customer visit. If done right, you can uncover
enough pearls through these visits that you can have confidence
in betting the business on your customer insight.
To be successful, companies should undertake
an organized process of conducting face-to-face interviews
with economic buyers as well as use buyers and convert this
into the actionable business requirements that you can trust
will make you successful.
This process has 6 basic steps:
- Identify the economic and use buyers
in customer and prospect companies
- Create an interview guide and and conduct
interviews that enable interviewees to describe their
environment, their current problems or "pain points",
and weaknesses with present solutions
- Convert the customer voices into formal,
report-based language
- Develop an image of the customer's environment
and current situation
- Use the image to aggregate the results
of many interviews and discover issues of critical importance
to prospects
- Convert these issues into product and
service requirements
During this process, many companies have
found that key assumptions they have held about what
their customers have valued are false and often discover
latent needs or values they never knew existed.
The only way to obtain the information that
you must have to make strategic plans, develop competitive
advantage, and grow your business is to listen--carefully--to
what your customers are more than willing to tell you.
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