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No.24 Accurately Understanding Your Customers (January 27, 2005)
As the market matures and customer needs become more diverse, it has become common knowledge that customer opinions are important. In fact, business strategy is often formulated and product development conducted based on the opinions of customers obtained through surveys or interviews.
However, there is no guarantee of success simply because business is pursued on the basis of customer opinion.
 The risk of believing what you see
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Some years ago Dupont (U.S.) conducted a survey of 5,000 supermarket customers, who were asked what they planned to buy when they went in and what they actually did buy when they left.
The results of those interviews showed that customers actually purchased only a mere 30% of the products they had said they intended to buy. (Source: Jack Trout on Strategy, MacGraw Hill).
If Dupont had stopped their survey after asking only the question when customers entered the store, and if the results of that survey were used as input for product development, the product would surely have been a failure. This example shows that there are major risks involved in simply swallowing the customer's opinion whole.
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Reduction in total cost
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The above-mentioned survey results do not show that customers tell lies. Rather, they indicate that there is a good chance that what customers say will be different from what they actually do.
If you're looking for increased sales of your services or products, you must first figure out what factors customers use when they decide to buy something. However, it is not realistic to ask a customer what prompted their purchase when they don't even know what to buy yet.
The key to understanding your customers is to objectively analyzing their behavior. For a ramen (Chinese noodle) shop, this means understanding customers not based on comments such as "the soup was delicious," but rather by the fact that they finished the soup to the last drop.
Various methods for understanding your customers are available, but in this column we will discuss two leading methods that we use here at beBit.
- Surveys
With this method you collect data based on experiences such as past web purchasing behavior. The advantage to this method is that it allows for quantitative and highly reliable research.
Note, however, that your survey will be meaningless if it asks customers questions about new products that they have never been exposed to or about things that they don't know. A classic example is a survey that asks narrowband users what kind of content they'd like to use with a broadband connection, and as a result ends up being worthless.
- Prototyping
This survey method is used to collect behavioral data on new services or products by having customers actually use a prototype. Since beBit is mainly conducting surveys on websites, our prototypes are paper-based specifications. (For details, see Efficient Web Creation (Part 1).)
Here again, rather than asking for opinions, your focus should be on collecting data that is based on factual evidence, such as how people respond when they use the product.
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True customer-centeredness
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Making efforts to look after your customers and provide them with a better value does not mean automatically catering to their opinions.
The key here is to repeat a process in which you first form a hypothesis on what your customers are interested in from everyday experiences, and then verify that hypothesis through data based on actual behavior. Accumulating such data is painstaking work, but it is a shortcut to improving the quality of your products/services and in the end you'll have your customers' satisfaction.
The term "customer-centeredness" sounds nice, but in fact it requires a lot of hard work and perseverance. When all is said and done, it can only be achieved when you have a strong desire to create good products and win the smiles of your customers.
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