Cyrus Allen, CapFeather’s Managing Partner, prompts organisations to consider the deep customer knowledge they already have inside their business. He suggests companies stall too long, waiting for perfect customer insights. He encourages companies to leverage the asset they have and take action to design and market test valuable new initiatives.
Companies are sitting on a pot of gold and don’t realise it
I want to dispel the commonly held idea that your organisation doesn’t have enough customer insight and understanding. Most organisations have plenty - they are literally sitting on a pot of gold. That’s rarely the issue. The problem that we see time and again is concern about having perfect insight in order to act, and that is getting in the way of creating value. It’s time to change the paradigm.
Of course, understanding what drives and motivates your customers and how they behave relative to what your organisation offers is very important. Customer research, the organisational capability to develop insight, and the skill to use that to design value propositions and experiences that matter is critical. However, many organisations over-index on developing the ‘perfect insight’ and in doing so miss out on creating real value. Increasingly, research is getting in the way of action.
Customer insight is critical for strategy development and innovation - but don’t sacrifice action for perfect insights.
Cyrus Allen, Managing Partner, CapFeather
Where do customer insights come from?
There are typically three sources of insight available for companies:
Prior primary research - data your organisation has previously conducted around a specific question or opportunity;
Secondary research - sector, market, customer research etc.; and
The accumulated experiences, perspectives, anecdotes and opinions of your employees.
Most organisations already have a deep treasure trove of data which delivers customer insights.
In almost every organisation I have worked with over the last 10 years of customer strategy and customer experience innovation consulting three common themes related to customer insights have been evident. Either the organisation: doesn’t have the right insight; believes it doesn’t (but actually does), or; has the information but doesn’t effectively leverage this asset to create value.
In all three cases, the response is often to spend more time and money trying to get ‘the right’ insight, and that gets in the way of creating real impact. Let’s briefly explore these three conditions.
The first condition is straight forward: the organisation hasn’t invested in customer research sufficiently to be able to apply it to the challenges and opportunities presented in customer strategy and CX development.
When an organisation isn’t effectively leveraging what they have there are typically three reasons why:
It is not accessible to the wider organisation. The insights/research team haven’t figured out how to democratise customer insight in the right way for practical use across the organisation.
The research they have commissioned is not appropriate for the organisation or the objective it was originally intended for. This is surprisingly common.
People in the business don’t have the skills and processes to understand and use the insight effectively in their roles. This is almost universal, and relates strongly to the first point. Organisations spend a lot of time and money on developing customer insight, but so often haven’t done the work to allow the organisation to use it for impact.
The most intriguing is the organisation who believes it doesn’t have the right insight, when in fact it is sitting on a treasure trove. Executives in these firms believe more research is needed to support action. Frankly, this perspective is often promoted by consulting firms who like doing customer research without any accountability for achieving real impact. This belief is largely incorrect.
determining the value of your existing data
Use this framework to determine what level of research your organisation should undertake. CapFeather’s Research Preparation Framework classifies your organisation’s customer insight readiness by Depth of Understanding and Primary Focus. Internal focus is directed toward company processes, while external is directed towards the market.
What type of organisation are you in?
Are you in a firm that seems out of touch with contemporary needs, wants and drivers of customer behaviour and need to perform extensive foundational research? This situation is quite rare in my experience, however if this sounds like your organisation, see below for how to approach it.
Are you in a firm that already has detailed customer data and are ready to leverage your asset? If this is you - excellent! You are ready to achieve scaled value quickly.
However, most firms sit in the middle. They have conducted some level of market and customer research to have a reasonable suite of market and customer insights useful for Lean CX innovation. They may only require a ‘top up’ to freshen their insight with a convenient sample of key customers to fill in some gaps before commencing CX innovation. They do not need to invest in extensive research - it just wastes time and money.
If your organisation has a low level of understanding there are two customer research strategies required to support CX innovation. Organisations in the bottom left - or Research - box have good market orientation but don’t know much about their customers. The optimal approach is to invest in customer research to maximise their ability to get cut-through. Typical examples are tech-push companies. They think they have the answer, however often miss many aspects impacting customer take up.
Organisations in the top left - or Reset - box require a different approach. They are often monopoly or tight oligopoly firms, including government departments, and haven’t deeply considered what their customers (or citizens) need, think or feel. We call them ‘reset’ firms because a reset is required around the value and importance of a customer focus - which becomes the motivator for doing customer research.
Do you recognise where your organisation is today in terms of customer research readiness?
As I outlined above, most organisations are already awash in customer insight, and rich in acumen held across teams that have been running the business successfully for years. They have enough data. They need to turn this into CX action. In the absence of action that creates real value, executives are becoming impatient. So, what’s the answer?
Rather than commissioning new research, companies should look inwards for customer insights.
Focus on Minimal Viable Research (MVR)
Using the same theory as Minimum Viable Products (from Lean Start Up) of Minimum Viable Initiatives (from Lean CX), Minimum Viable Research realizes value more quickly. Instead of spending a large amount of time and money doing more primary customer research, start with harvesting what the organisation has today. Seek to be comfortable that there’s enough ‘signal’ to help direct thinking and exploration around a particular focus. If more insight is needed, it gets done.
Lean CX leverages your existing asset and creates scalable value
The Lean CX process operates to leverage organisational acumen together with existing research and insights as quickly as possible. This allows us to move quickly through opportunity/problem exploration and ideation, taking days, not months. That means CX projects can move into the design, test and scale part of the process much more quickly. That is, get to value faster by leveraging what you have today to design and deliver CX enhancements and innovations quickly.
Understand the valuable asset you already have
The bottom line is that companies need to prioritise action over perfect insights. That’s even truer today where we see a high degree of customer, market and sector change. Unfortunately, many organisations haven’t yet developed the ‘insights muscle’ required to keep on top of things. If that is the case, then spending the time to assess and leverage what you already have is well worth it. If you don’t have enough data, that will quickly become clear. Just don’t let commissioning expensive primary research be the default setting for every new initiative.
Cyrus Allen is a Founding Partner at CapFeather Global with more than 2o years of corporate experience locally and internationally with Ericsson, Sony Ericsson, Telstra and ANZ, together with over 10 years senior consulting and advisory Customer Strategy and Customer Experience Innovation. He has held three non-executive board directorships and has been involved in start ups in the aged care and delivery technology sectors.
Cyrus Allen is a co-author in Lean CX: How to Differentiate at Lowest Cost and Least Risk, available at your favourite book retailer.