Customer Understanding: Do You Really Know What Your Customers Want And Need?

Right now, companies around the world are barreling down a perilous path — one that isn’t illuminated by customer insights. These companies might think they know what their customers want, but Forrester’s research shows that most companies today have an incomplete — or worse, downright wrong — understanding of who their customers are, how they perceive the current interactions, and what they want and need in the future.

In Forrester’s soon-to-publish book, Outside In, Harley Manning and I illustrate the importance of customer understanding through a case study about Virgin Mobile Australia. The company recently earned the No. 1 spot in customer satisfaction in its market. But in their hearts, Virgin Mobile’s execs knew that the customer experience they provided was pretty much indistinguishable from those of their competitors. And for a company operating under the Virgin brand name, that was a big problem.

Matt Anderson, the former COO of Virgin Mobile, told me, “We weren’t interested in being up to par with industry standards. We wanted to create a differentiated customer experience: one that was uniquely Virgin.” To do that, the company had to take an outside-in view and examine what the Virgin brand meant from the customer perspective.

So Virgin asked some of its customers to create online diaries, and every day for a week asked them questions about Virgin’s brand values: simplicity, fairness, and control. (Words we all naturally associate with our wireless carriers, right?)

Here’s how one customer answered those questions: “I feel like I’m out of control when I am cooking without a recipe. It makes me feel like I am not getting the best possible result. I know the ingredients that I have at hand would make a nice dish, but I cannot get there.”

Before this study, Virgin Mobile thought “control” meant giving customers options to modify their contracts based on their individual needs. To that end, the company was about to move from 19 standard billing plans to a system where customers could slice and dice hundreds of different plan features any way they wanted, like some kind of giant telecom salad bar.

But the diaries indicated that infinite options weren’t what customers wanted at all. To customers, “control” meant having a greater understanding of a smaller number of choices. This was a critical insight — one that compelled the Virgin Mobile execs to change their strategic direction and one that they wouldn’t have learned had they been content to rely on what they thought their customers wanted.

Thinking you know what customers want is incredibly risky. Knowing what they want leads to customer experiences that matter.

Customer understanding is just one of six disciplines that companies must master if they want to achieve the full potential of customer experience. The others are strategy, design, measurement, governance, and culture.  Of course, most of these concepts aren’t new in the business world — but they do take on a slightly different twist when it comes to customer experience. If you’d like to know more about the six disciplines and how they’ll help you create great experiences for your customers, please visit outsidein.forrester.com.

Comments

Nice insight into the

Nice insight into the decision making process of an award winning company. You are spot on when you say, "Knowing what they want leads to customer experiences that matter". More companies should interact with customer this way and adjust company policies and procedures accordingly. Looking forward to reading your book!

Rachel Miller
http://www.impactlearning.com

Excellent post, as always

Excellent post, as always Kerry. I might suggest a seventh discipline to your list, or perhaps you'd include it as part of culture. And that is employee empowerment and engagement (heretofore known as EEE.) Companies that empower all of their employees to provide an exceptional customer experience, not just the front-line "customer service reps", stand to differentiate themselves in a really meaningful way. Not only do their customers benefit from better response times and consistent service.....the employees can feel a sense of ownership and responsibility, leading to better loyalty and retention. I've been a part of that type of organization, and the sense of pride I invested in my customer interactions was very fulfilling.

Bravo Virgin!

Hi Kerry,
Great story about Virgin and I look forward to reading more from your book. Bravo to Virgin for leading the way and using very human and qualitative methods to uncover really personal insights that drove their strategy.

Adrian

http://www.adrianswinscoe.com/blog/

Know your customer.

Quite often we come across clients who don’t know who their customers are and it goes even deeper – what is the demographic of the customers, what is the kind of information & level of engagement they actually seek.

But companies who have taken the trouble to find out & executed them just like you mentioned with Virgin Mobile benefit tremendously in terms of customer satisfaction & retention.

The problem as you have pointed out is Thinking you know what customers want is incredibly risky. Know your customers & what they want, to create a better experience.