How well do you know your customer? No really, how well. I accept that you have undertaken the necessary due diligence to tick money laundering boxes. I accept that you have sent out surveys asking loaded and fairly pointless questions about tastes and hobbies. I even accept that you have gathered store card data so that you know who buys what and when. But I still ask the question how well do you really know your customer? And more importantly, what are you doing with the information?
Whenever I talk to senior teams about innovation capability and what it takes to build what I call a ‘Next Generation Organisation’ I talk about three core things, Intelligence, Collaboration and Adaptability. So, sooner or later the talk turns to customer awareness or ‘insight’. As an aside and I’m going to be blunt here. If you value short-term income over long-term customer loyalty then don’t waste your time with innovation. Because at heart, innovation is about delivering long-term competitive advantage allied with exceptional customer experiences. There needs to be a deeper understanding about what organisations ‘know’ about the world, their customers, consumers, trends and so on and I think that needs a shift from ‘Insight’ to ‘Intelligence’.
The online encyclopedia Wikipedia defines ‘insight’ as;
“the understanding of a specific cause and effect in a specific context”.
However, it defines ‘intelligence’ as;
“A capability that, among other things, involves the ability to reason, plan, solve problems, think abstractly, comprehend complex ideas, learn quickly and learn from experience. It reflects a broader and deeper capability for comprehending our surroundings, catching on, making sense of things, or ‘figuring out’ what to do”.
In the bad old days if you thought about your customer at all it was to find out their habits so you could target advertising and flog them more of what they didn’t need. Knowing your customer meant know how much junk, or quasi-insurance schemes, you could add on to whatever they were buying, but the chickens have come home to roost, the public has wised up and now people are looking for something more. And that something more requires businesses to stop thinking they ‘know’ their customers because of typical ‘data’ or ‘insight’, and gain real ‘intelligence’ in order to stop dictating what can be bought and to start collaborating with customers existing and new.
Let me give you an example which has come to me via the Australian Government’s business resource website. Originally the Beyond Q bookshop in Canberra was just like any other. Books were stacked on metal shelves and that was about it. Then the owners started talking to their customers and really listening. They found out that some customers wanted to stay and browse but that their partners weren’t as interested. So the store created a café, a bar and live music to give the non-browsers something to do. Local groups became interested so the shop opened its doors to community events. A male customer said there wasn’t enough ‘bloke food’ so the café started selling toasted sandwiches. A comment about the metal shelves resulted in an experimental switch to wood.
Every incremental change was driven by the staff having real ‘two-way’ dialogue with customers, “not just about what’s happening in the bookshop but about what’s happening in their lives.” As the store says “Customers are the ones who keep the shop alive and well, and if they know you appreciate them they will become loyal.” Changing the layout, adding extras, talking to people, all might seem like innovations, which are going nowhere and yet with every small ‘incremental’ change the bookshop prospered. The owners understood the true purpose of deeper intelligence and customer collaboration in creating a product, which attracted customers and engendered loyalty. Anyone can sell books, but it is ‘how’ those books are sold which turned a dusty backwater store into a thriving and profitable community hub.
Do such ideas scale up into big business? Well yes they do. You might not want everyone from back office staff to accountants to converse with customers but you can certainly seek organisation-wide contribution and focus minds on creating innovative solutions, which deliver differentiation and exceptional ‘co-created’ customer experiences.
Real ‘intelligence’ trumps traditional insight every time and organisations need to start gathering intelligence about the world in order to truly out-innovate the competition. After all, the CIA isn’t called the Central ‘Insight’ Agency!