Every marketer says that they do. Companies swear that they know their customers. But, as a fantastic article from Fast Company shows, most organisations are just fooling themselves. Its a long read, but well worth it – from Fast Company, Issue 34, April 2000. Read it here (or below).
Key messages:
- Where You Listen Is as Important as How You Listen
- Whom You Listen to Is as Important as Where You Listen
- To Listen Smarter, Give Customers Something to Talk About
This is one of the cornerstones of the connection economy. This is worth taking seriously!
Listen. (No, listen carefully.) Did you hear that? It’s the sound of your customers trying to help you do a better job for them — and, in the process, to help you build a more successful company for yourself.
We are living, once and for all, in the Age of the Customer. Did you hear what we said? There has never been a better time to be a customer — or a tougher time to be a supplier. Customers have higher expectations and more choices than ever. Which means that you have to listen more closely than ever. Forget building a learning organization. You first have to build a listening organization — a company whose people have their ears to the ground.
We can hear your reaction already: Of course we listen to our customers! We spend millions of dollars a year on market research and focus groups. Sorry, that’s not enough. Most focus groups are tone-deaf. Here’s what Jerome Conlon, 43, a former marketing guru at Nike and Starbucks, has to say: “Unskilled moderators tend to phrase questions so that customers say what they think the moderator wants to hear. Customers don’t like revealing that they’re unsure. Most focus groups aren’t conducted in a way that lets companies listen to their customers’ aspirations. Instead, they go for the jugular about whether a product is good or bad. That’s why focus groups cannot be the only tool for learning about what customers want.”
Or listen to David Schriber. “We hate focus groups,” declares Schriber, 35, VP of marketing at Burton Snowboards. “One or two people always influence the rest of the room. Kids who are independent — our primary demographic — wouldn’t participate in formal discussions. And ‘exit interviews’ are no good. Snowboarders are the first ones on the mountain in the morning and the last ones off at night. Does your clipboard-toting pollster have that kind of stamina?”
So what’s the alternative? Well, companies that are serious about listening to customers are tapping the immediacy of the Web to listen more carefully and more frequently to more and more of their customers. Philip Letts, 34, chairman and CEO of beenz.com Inc., has created a virtual Web currency to help companies track how their customers use their sites, and hundreds of other sites as well.
Or better yet, how about a night of clubbing with a sample of your future customer base? Senior managers at Ford’s European operations knew market statistics and demographic projections by heart: The next significant customer segment for automobiles will be brand-conscious teens — the so-called echo boomers. Ford’s management team, however, didn’t know about its future customers’ lifestyles and priorities. So the team decided to observe some of those customers — on their terms and on their turf. A group of Ford engineers and marketers began by hanging out at a hair salon in London that also hosts experimental techno-pop. There, the teens chatted about what was important to them (time and personal space more than money), and then they all partied at some of London’s hottest clubs.
“It was a deliberate shock tactic, getting inside the heads of echo boomers,” says Andrew Grant, 27, Ford’s European and consumer-marketing-insights manager. “Suddenly, our customers were no longer statistics on a page or a clever write-up by an ad agency. They were flesh and blood — and standing right in front of us.”
When the managers and the kids started connecting, the real listening began. With the help of computer-aided tools and a group of young designers at Ford, the partyers became vehicle developers. “We got a feel for their lifestyle and for what was important to them,” says Grant. “We incorporated those insights into some designs and asked, ‘Would you want a vehicle like this?’ ”
The kids would then suggest a line here or there and, with the designers, came up with a sketch of a car that’s simple and relatively inexpensive to buy. Such listening experiments have been so successful that thousands of Ford employees in North America will be getting a one-day crash course in how to communicate with consumers, whether at a dance club or in a grocery store.
What follows, then, is Fast Company’s crank-up-the-volume guide to listening to customers. Effective listening may not always require techno-pop, but it does require principles that keep your ears to the ground. For one thing, it’s important to recognize that where you listen is as important as how you listen. For another, whom you listen to is as important as where you listen. Listening works best when you give customers something to talk about. But, in the final analysis, companies don’t listen — people do. So if you believe that listening to customers is one of your organization’s most critical jobs, then good listening becomes a critical skill for everyone.
Where You Listen Is as Important as How You Listen
More and more companies are inviting customers to their headquarters in an effort to “get close to their customers” — by getting those customers to express opinions on current and future products. There’s nothing wrong with bringing your customers to you. But if you want to hear the most powerful insights, it’s much more effective to go to your customers.
Listening to customers in their own environment is more honest and spontaneous than trying to get them to respond in a controlled setting. “Customers have been researched out,” says Steve McCallion, 36, director of research and design planning at Ziba Design, which creates products for such clients as FedEx and Intel. “It’s medieval to make your customers come to you,” adds Martha Rogers, 48, coauthor of “The One to One Future: Building Relationships One Customer at a Time” (Bantam Doubleday Dell, 1993).
Michael Rich, 46, is a Harvard-educated physician who specializes in adolescent medicine at Children’s Hospital in Boston. Medicine is a field that’s famous (if not infamous) for its medieval approach to interacting with customers. But Rich is a maverick. He doesn’t wear a white coat. He doesn’t shoo patients out the door after just 15 minutes. And he doesn’t assume that just because he’s the doctor, he has all the answers.
“Medicine is not a religion; it’s a service industry,” argues Rich, talking a mile a minute about how to improve doctor-patient relationships. “Yet as doctors, we often block ourselves from getting information that we most need to serve our patients. We need to listen to patients within their framework. They’re the experts; they live with their illness every day. We can learn from them.”
Rich learns by listening — and by looking. The sterile confines of an examination room, he says, don’t encourage kids to explain all of their symptoms, or to come clean about whether or not they’re taking their medicine. That’s why (for example) Rich gives his asthma patients video cameras to document their illness and to teach him about their lives. The camera lets children talk on their terms — when they feel comfortable. He urges patients as young as 6 (and as old as 25) to use their camcorders in their bedrooms, at playgrounds, or on soccer fields for 8 weeks. His patients also interview friends and family.
The contrast between what patients tell him and what they say on tape is remarkable, Rich says. Videos reveal asthma-inducing allergens that his patients had never mentioned: In one tape the mother of one of his patients is smoking in the house, despite her assurances that she only smokes outside. Others show a living room full of plants, and a kitten in the bed of a patient who’s allergic to cats.
Tapes also let Rich know whether patients are taking their medications correctly. Recently, he studied 21 videotaped narratives of severely asthmatic patients. He concluded that 16 of them were making serious mistakes with their medicine. Some were taking far too much, while others had discontinued their medicine altogether.
Even more important, Rich sees complex human dynamics that might never surface in his office but that have a huge impact on treatment. In one taped segment, for example, an 11-year-old girl and her mother began arguing after her mother accused her daughter of using her asthma to get attention from other family members. “Everyone treats you like some kind of queen,” the mother says, raising her voice. To which the girl angrily retorts: “Do I sense jealousy? Shut up!” Little wonder, says Rich, that the girl has problems taking her meds consistently.
But these videos do more than just highlight his patients’ problems; sometimes they actually change lives — which is just what they did for Melinda Emmanuel, an 18-year-old single mother who was finishing her senior year of high school when she and Rich first encountered each other, about 5 years ago. Back then, Emmanuel had a reputation for being so argumentative, so combative, that few doctors wanted to treat her. That first meeting with Rich was dire: She had run all the way from her train stop to Children’s Hospital, an activity so taxing that by the time she reached the hospital’s adolescent clinic, she collapsed on the floor, blue from lack of oxygen.
Once Rich began treating her regularly, he gave Emmanuel a video camera, which, she says, was “one of the best things that’s happened” to her. “Dr. Rich gave me the camera and said, ‘Show me your world. Use the camera to show me when you have attacks — even take it to school,’ ” she recalls. One video revealed that within eight minutes, she used her inhaler twice, which was essentially an overdose that caused her to begin coughing uncontrollably. When Rich saw that, he worked with Emmanuel to even out her dosage.
In another taped segment, Emmanuel confessed to Rich and an allergist that she had stopped taking her steroids, because she was fed up with their awful side effects. The allergist warned that she could die without that medication. To which a scowling, slumping Emmanuel shouted, “I don’t care!” Of course, she did care: “When you’re young, you’re not supposed to be this sick. I had difficulty making my point without getting angry.” But what did help Emmanuel deal with her anger was realizing, after watching her tapes, how angry she actually was and how that anger prevented her from getting adequate medical care.
Today, Emmanuel, now 22, is only a year away from a degree in nursing and midwifery. According to Emmanuel, Rich’s method of tuning in to his patients saved her life.
Whom You Listen to Is as Important as Where You Listen
For Michael Rich, and for most other doctors, listening intelligently to “customers” can be a matter of life or death. But for people and organizations not in the business of saving lives, all customers are not created equal. Some are decidedly more profitable than others. Some have a greater impact on the market or on other customers than others do. And some are even smarter than others. “A question that all businesses must answer is ‘Which customers do we want to target?’ ” says Martha Rogers. “Companies need to identify their die-hard customers, figure out what those customers want, and then bring that to them.”
That formula has worked wonders for Burton Snowboards, the best-known snowboard brand in one of the world’s fastest-growing sports. According to company statistics, more than 2 million snowboarders are hitting the slopes these days, and over the past five years, Burton’s market share has increased from 30% to 40%.
The company has garnered those impressive numbers by focusing on one objective: to provide the best equipment to the largest number of snowboarders. But the company doesn’t accomplish that by holding focus groups, or by getting its gear in as many stores as possible, or even by trying to please all of its customers all of the time. When Burton wants to find out what customers think, it turns its attention to a market segment whose influence far exceeds its size — the pros. Burton listens to 300 professional riders worldwide, 39 of whom are on its sponsored team.
Almost every day, staffers talk to those riders — on the slopes and on the phone. If one of them has a suggestion or a problem, a Burton employee calls back within 24 hours, sometimes attending to one of those 300 riders before helping retailers or other customers. “We insulate staff members from having so much responsibility that they can’t talk to a rider,” says David Schriber, VP of marketing and himself an avid rider who gets out at least 60 days a year. At Burton, employees who know the pro riders best are held in high esteem. In design meetings, product features live or die depending on riders’ preferences — even when they contradict those of the designers.
Riders help develop virtually every Burton product. For instance, Burton designed a pro board for Shannon Dunn, 27, a bronze medalist in the half-pipe competition at the 1998 Winter Olympics. Dunn believes that female riders should have more choices to suit their different body types. So, 2 years ago, she suggested a line of boards for women to Burton’s marketing department. When Dunn got the go-ahead from Burton, she and fellow rider Victoria Jealouse created the company’s new Feelgood series of boards for women, which are designed to adapt to their smaller, lighter bodies.
“That’s the way the whole company works — quick turnaround based on rider feedback,” says Dunn, who started riding for Burton in 1994. After the 1998 games, Dunn happened to mention that the backs of her bindings were bruising the sides of her ankle bones, and within a week, designers came up with a solution that Burton’s 2000 product line now includes: an extra support that can be inserted to keep bindings stiff or left out to increase suppleness.
But Burton staffers don’t just sit around waiting for such “squeaky wheels.” “We immerse ourselves in our riders’ lives,” Schriber says. If pro snowboarders travel to Tokyo, a Burton employee tags along, watching where they shop and what they buy, and listening to their comments about the sport and about their equipment.
Designers also look at what riders wear, to get a sense of how the pros like their sports gear to fit. Those who wear low-slung jeans probably wouldn’t choose tight-fitting snowboarding pants. Which was the case for Craig Kelly, 34, an old-school backcountry rider and four-time world champion, who prefers a loose style. Two years ago, Burton designers discovered that baggy inner and outer layers created a lot of friction that restricted a rider’s movement. To compromise, the designers tried using a stretchy fabric for the long-underwear-like inner layer while keeping the outer layer loose. Now Kelly wears Burton’s AK line of pants regularly, stretch and all.
Of course, this relentless focus on professionals could create challenges for the folks at Burton: What if the needs of recreational snowboarders conflicted with those of the pros? Fortunately, the company rarely encounters such situations. Apparently, meeting the pros’ needs produces the highest-quality products. And quality is what keeps consumers coming back. “Like most athletes, snowboarders always want better equipment,” Schriber says.
Even so, the company makes sure that the pros’ preferences don’t collide with the needs of its rank-and-file customers. To avoid that, Burton has at least 10 of its 22 U.S. sales reps out on the slopes each weekend, loaning gear to and riding with amateur snowboarders. But instead of toting clipboards and 50-question surveys, the reps listen to riders and watch what works and what doesn’t. Meanwhile, at any given time, two 35-foot trailers are traveling in North America, six buses are crisscrossing Japan, and four trucks are rumbling through Europe, all with the purpose of testing gear on consumers. Burton also has the eTeam — an online community of 25,000 kids who provide real-time feedback in exchange for trying products for free. “We want to find out whether what the pros say they want also rings true for less-experienced riders,” Schriber explains.
But don’t get the wrong idea: Listening to the “right” customers doesn’t always mean listening to the elite among them. Last year, Agilent Technologies, a Hewlett-Packard spin-off, set out to redefine its health-care-supply business and to rethink customer needs by listening to new categories of customers. For years, Agilent’s product managers had considered the doctor in the hospital the company’s target customer. Now, however, health-care delivery is occurring everywhere — in the home, on the street, and in urban and rural clinics. For Agilent, that evolution has created a need to develop high-tech devices for caregivers who had varying levels of medical training, such as home-health aides, paramedics, EMTs, and nurses.
Agilent staffers started listening to those frontline workers and soon discovered that their customers’ biggest problem was the trouble that they had listening to their customers — literally. “Hearing heart murmurs or detecting breathing problems with traditional stethoscopes was becoming increasingly difficult,” says Jay Mazelsky, 30, general manager of the medical-supplies business in Agilent’s Healthcare Solutions Group, based in Andover, Massachusetts. Although no one had asked for a new type of stethoscope, Agilent realized that stethoscopes were still relying on technology that was more than 100 years old, unlike the cutting-edge science behind most other medical devices. And in reaching that realization, the company identified an unmet need and a market opportunity.
So Agilent and its idea-generating consultant, IdeaScope Associates, came up with an idea for a group of devices — ones that would make digital recordings of the body’s “sound bites,” generate printouts of what was heard through a stethoscope, or transmit captured sounds over the phone so that others could help with diagnosis and treatment. Then came the hard part: figuring out how to meet the seemingly diverse needs of caregivers, who wanted devices that were simple to use but that permitted them to make diagnoses while preventing them from making mistakes.
So Agilent created its Stethos Electronic Stethoscope, which blocks out background noises, such as the sound of voices and the hum of machinery. In addition, it offers amplification that is up to 14 times greater than a traditional stethoscope can. One doctor who used Stethos marveled at how she could hear her own heart murmur for the first time.
But when Agilent listened to other doctors, it faced a new dilemma: “We realized that many doctors we spoke with were emotionally attached to their stethoscopes,” says Mazelsky. “They had grown accustomed to the appearance, sound, and prestige associated with certain models. It’s as much a consumer preference as a professional necessity.” So Agilent created a range of marketing programs, including an online education center, to describe the benefits of using an electronic stethoscope and to ensure a continuity with tradition. And the result? During its first six months on the market, sales of Agilent’s new electronic stethoscope exceeded those of traditional, acoustic models.
To Listen Smarter, Give Customers Something to Talk About
No matter how closely your company listens to customers, listening is still, at its core, a passive act: Customers express themselves; you try to figure out what they’re saying. One way to go beyond that initial round of information is to listen even more carefully, deeply, and closely. Another way to get customers to tell you more is to give them more stuff to talk about.
That’s the philosophy at General Electric’s GE Plastics, a huge business unit ($7 billion in 1999 revenues) that’s nestled in the Berkshire Hills of western Massachusetts. GE Plastics is a megaplayer in a well-defined business. It grows fast only when its customers — manufacturers of everything from CDs to auto parts — also grow fast. And rapid growth in a mature market means innovating your own operations as well as those of your customers.
For GE Plastics, such innovations get their start in its 100,000-square-foot development center. “Customers don’t always know what they need, so we help them figure that out,” explains Ferdinando Beccalli, 50, vice president and general manager of GE Plastics and a 23-year veteran of that division. “We want to work closely with our customers — from pellet to finished part.”
In that development center, nearly 50 machines whir, clang, and stamp their way to a new future for the division. This equipment isn’t just spitting out plastic pellets; it’s experimenting on behalf of GE’s customers, making higher-quality CDs that can be reproduced in less time than before, designing wireless phones that are smaller and thinner than today’s models, and creating a new generation of lightweight car bumpers.
Put simply, GE Plastics is not just a supplier to its customers; it also acts as their change agent. The unit’s engineers don’t wait for customers to come to them with problems. Nearly half of the products that this division develops for its customers come from GE designers’ ideas. GE figured out ways to inject color into plastic, which eliminated a customer’s need to paint the material. It approached bottling plants with the idea of using a plastic conveyor belt to replace the noisy steel models. (Using plastic, which is inherently slippery, meant that plants no longer needed the lubricants that the steel belts required to operate smoothly.) GE Plastics also shaved more than a second off of its already short six-second CD-replication time, reducing that cycle time by 18%. In the process of testing ways to stamp better-quality CDs faster, the unit came up with another process that lets customers produce either more disks per hour or disks of higher quality.
Ultimately, listening well is more than just listening. It’s about showing and telling — showing your customers what’s possible and then encouraging them to tell you what’s compelling. “Serving your customers well boils down to providing them with financial benefits,” says GE’s Beccalli. It’s nice when they can tell you how to do that for them, but in the final analysis, “it’s your responsibility to figure that out.”
Are you listening to that message?
Rekha Balu ([email protected]) is a Fast Company senior writer. She’s listening. You can reach Michael Rich ([email protected]) and David Schriber ([email protected]) by email. Learn more about GE plastics on the Web (www.geplastics.com).
Sidebar: Will Web Customers Spill the Beenz?
The Web has great potential for helping companies listen to customers and deliver services that are tailored to customer preferences. But one big problem for Web companies is that the customers with whom they interact closely come from the relatively small universe of those who actually visit their site. What if you could watch (and listen to) what people do across the entire Web? You could understand what kinds of offers motivate people, figure out why their attention drifts from one site to another, and anticipate what site they might go to next.
That’s the idea behind beenz.com, a “Web currency” that more than 750,000 users are now earning and redeeming at about 200 e-commerce sites on four continents. For customers, beenz is the latest wrinkle in “loyalty” programs. They earn points (“beenz”) by patronizing (or just visiting) participating Web sites. They can then use those points to buy things at other sites. For companies, beenz becomes a tool for understanding customer behavior. Member sites get reports on how customers use their beenz — such as what they tend to buy or which sites they visit before and after the transaction. “For me, it’s much more interesting to know not only your behavior within my store but also what you do in other stores,” says Philip Letts, chairman and CEO of beenz.com.
But don’t use incentives to try to change people’s preferences, Letts warns. Instead, use incentives to intensify existing behavior. That way, you create a virtuous loop of activity and feedback. Reward consumers with beenz for spending time on your site or trying a download. That reward will then become an incentive for people to do more with the site.
Also, don’t be tempted to keep redesigning your site every time you learn something more about customer preferences. Letts encourages people to use Java, which changes the basic look of a site. Use it for “pop-up” offers, and then collect data on the response to those offers. Here, too, he suggests going slowly. “You can only change a site’s design and links so often,” he says. But by layering new offers, you’ll get the information that you need to get it right.
Source: http://www.fastcompany.com/magazine/34/listenup.html