How you can implement a practiced customer focus in just five steps …
and develop products and services which really strike a chord with your customers.
The key to actual customer centricity lies in customer behaviour. Companies have for all too long become entrenched in the idea that all they must do to understand what their customers really want is just ask the questions better or listen better. Ultimately though, the customer alone is the only expert in knowing what he or she is missing to complete their fortune.
Now, the sad news is that the consumers frequently don’t know it themselves. This feeling of what latent dissatisfaction provokes is difficult to express. It’s even more difficult than imagining how exactly the actual solution should be and what they would do if it was really available. (Buy it or not?) Questions about the customers’ opinions and attitudes to the topic don’t really help here.
There’s a huge danger for the accuracy of predictions about new products or services by just relying on this information alone.
It’s much more predictable and precise to concentrate on the customers’ behaviour and draw the right conclusions. By asking, for example, how certain actions and decisions take place, you can read how the evaluation (decision) about a product or a service is made. But also, what motives and behavioural patterns led to this behaviour and at which stages. It becomes evident which success relevant characteristics a product needs to fulfil for it to be bought. And how your product does in comparison. Where do things not run as planned or is a product not perceived as intended? What needs to be changed and how the target behaviour (of being bought) is achieved? But also, which product characteristics or features can be disregarded as they aren’t perceived as “valuable” enough by the customers.
Exciting – but is there a systematic way of achieving it?
Yes, the following five steps sketch the way:
Step 1: Key Behaviour = Typical target group approach
Provide yourself with an accurate (as possible) picture of what happens with your customers during the “moment of truth”.
Imagine now that a customer is in a DIY store, at the shelf and wants to buy a cordless screwdriver: What does he or she do to find the one which is most suited to his / her needs from the 30 different screwdrivers that are there? What criteria does he / she apply and in what order? Does he / she look at the price first, then at performance and then the brand – or is it the other way round? Why has he / she selected this criteria in this order?
Step 2: Occurring Behavioural Economic Effects (BE Effects)
Every action has a reason.
There are always behavioural patterns (BE Effects) at the bottom of the way that we make decisions. Identifying these help, us on the one hand to comprehend our customers better, but these effects also offer possibilities to target weaknesses with the most appropriate success strategies (Nudges).
Which behavioural effects can you identify around behaviour? How effective are these? Are there behavioural patterns which are more important than others? Or behavioural patterns which aid one another or annul each other?
Let’s look at the example of the cordless screwdriver again: It could also be the case, for example, that the choice of different products overwhelms the customer and he or she is just trying to quickly establish a general idea about the products. Frequently, customers fall back on the “status quo bias” and look for brands or products which they already know, and decide then only based on this knowledge. A less known brand, which clearly has the better price-performance relationship, has it particularly difficult in even being considered in the decision.
Step 3: Barriers
There are nearly always barriers in the way of the desired behaviour.
For instance, you determine that the wrong assumptions exist about what really happens with the customer. Or there’s important aspects missing about the presented product for it to be perceived as a solution (= no or a bad solution fit). It’s decisive to expose these barriers and to describe these in as much detail as possible.
A typical example for this is that products are armed with lots of information and product features along the motto that “more is better” for it to be acknowledged as the “best product” by the customer. Frequently though, the opposite is the case: information overload leads to the product being out of the running, as the customer is either so bewildered that the purchase decision is put on ice (drop the bucket effect) or the decision is made for another product that appears to be less complex.
Step 4: Target Behaviour
To hit the mark, you need to know where you want to be. What is the “ideal” customer behaviour?
Describe in as much detail as possible how the customer should behave in this moment. Where are there deciding deviations from the key behaviour observed in your customers? How do these deviations occur? Which BE effects are behind the target behaviour?
With the cordless screwdrivers, it could be the case that you’re already the market leader in this category, and want the customers to orientate themselves first to the brands they know best (“status quo bias”), and as a result very few competitors (if any) are considered. As a first step, you’ll need to ensure that your brand is the status quo for the target group (and remains it too).
Step 5: Behavioural Economic Strategies for Success / Nudges
As we already know which behavioural effects are behind the behaviour of our customer, we can respond to these with the respective nudges.
Behind every effect there is a success strategy about how this can be positively swayed. Here’s an example: Customers are inclined not to buy at all if they have the feeling that they need to make too many decisions (“the drop the bucket effect”). A simple way of turning this effect around is by eliminating the complexity, and radically minimalising the number of decisions to be made.
Going back to our cordless screwdriver example: If we notice that the customer has difficulties with the technical specifications of the product then it would help if these were explained as plainly and simply as possible, ideally with pictograms. For example, could the number of screws or the number of square meters of terrace that could be laid be a better gauge than the wattage or the battery life, and therefore make it much easier for him / her to decide.