Tuesday, 2 December 2014

Customer Proximity

Customer Proximity

What is it and how do you get it?

?What if! have twenty years experience designing and managing customer proximity programmes within organisations including Unilever, Pfizer and Barclays Bank.   So what have we learnt?  Here we summarise why organising for customer proximity can deliver surprising benefits, why corporations often struggle to make headway on what shouldn’t be a difficult task and we share the practical secrets of those winning at customer proximity today.

What is customer proximity?
All organisations have customer intelligence in some form.  Customer proximity goes beyond quantitative and qualitative research and describes an organisational muscle; the capability of many colleagues, at all levels, to have an instinctive understanding of what is the right thing to do for their customers.  It’s an ambitious concept, especially for large organisations.

Customers?  Who are these customers?
Most organisations are a link in a chain of value, sometimes separated from the final purchaser by intermediaries or retailers.  Often the end purchaser is not the consumer.  Getting a common definition of the customer is an important if obvious first step.  For instance a pharmaceutical company selling cancer drugs may choose to see a patient’s carer as the ‘real customer’ despite an army of doctors, healthcare trusts and of course the patient themself having claim to the title of ‘customer’. 

One of the most frustrating conversations we have had around ‘who is the customer’ was with a joint meeting of an airline and the airport from which the airline operated.   We counted several ‘customers’ during the conversation including both the airport and airline who regarded each other as a customer, the regulator, travel agents who book tickets, the local community and of course passengers.  Passengers were subdivided into separate missions – passengers shopping, passengers late for a plane, VIP passengers, nervous passengers and so on.  The conversation was paralysed whilst the room disagreed on who they were really fighting for - until we jointly chose to identify the customer as a passenger who wanted to move through an airport with the minimum of fuss.

Why is customer proximity the best thing since sliced bread?
The confidence of colleagues, at all levels to do the right thing for their customers feels unarguable.  Focusing on a single customer need can lift people out of their silos and get them all facing in a similar direction.  Seeing the whites of a customers’ eyes (or smelling the prey), feeling what they feel, especially in the environment in which they make decisions can be profoundly moving and fuel the hunger to make things happen.  We once took the Board of a major UK bank to hold their meetings in a modest terraced house in East London.  The homeowner asked our Board members to take their shoes off as this was a ‘no shoes house’.  That day the Board learnt just how increasingly irrelevant banks were becoming for lending money within communities but somehow it was the location that made them really believe it – even though they had had the data in house for years.  

The digital revolution has made customer proximity much more accessible.  Today you can go on a tour of someone’s home wherever they are, you can ask a thousand people a question, or show them a new product and get a response almost immediately, you can track special interest sites or even start your own debate and in an instant you can find the ‘crazy’ people who conventional market research passes by.

So customer proximity makes things move faster and with real passion, less is spent on data collection and lets face it; backing your gut is exciting.  Isn’t that what everyone wants to do? 

So if the case for customer proximity is so convincing why doesn’t everyone do it?
There are unfortunately a number of organisational illnesses that resist customer proximity.   First off is the abundance of easy data.  Leading UK supermarkets have probably had the best customer data globally, and yet couldn’t see the rise of the discounter and small store in enough ‘colour’ to force them to act.  Sometimes organisations would be better off with less investment in customer information and more reliance on the entrepreneurial and empathetic skills that lie within all colleagues. 

A second illness is the curse of the clever segmentation exercise.  Most clever people can create a rational customer segmentation and many customer segmentation exercises end up looking like Victorian butterfly collections – rows of perfect examples and yet somehow very sterile.  Real life is a lot messier than most segmentation exercises: Often it’s the shopping mission that’s more useful than the segment (as many segments can share the same mission).  Also it’s the rejected segments that can be the most interesting because those ‘weirdos’ might just be about to burst into the mainstream.  Then there’s the curse of the careless anecdote born out of segmentation.  Somehow a particular customer stood out in research, they said something memorable and the Board have never forgotten what ‘Kath ‘said.  In fact Kath seems to hold a huge amount of power – frustrating for everyone and a dangerous way to make decisions.

Finally many executives are unconsciously incompetent around customer proximity.  Many haven’t tested themselves or their organisations around customer awareness.  Quite possibly this might not seem an important thing to do, not as important as all the pressing operational issues that any executive today faces. 

So here are two questions, if you can answer them then push delete and do something else, you don’t need to read on:

1. Do you know whether and how your organisation’s source of customer intelligence is better and more impactful than your competitors?

2. Looking around your peers, do you have confidence that you have a shared view of who is most insightful and in what areas?  Do you afford them more airplay than your peers you’d rate at the bottom of the list?

Critical customer proximity muscles

Below we outline the muscles an organisation needs to flex to get fitter and stronger at being close to customers:

An experimental approach:  Forget ‘Change Management’ – the best route to influencing colleagues is to experiment with something different, prove it works and wait for others to copy.  We’ve worked with a small incoming call team in an energy company’s call centre and helped these frontline colleagues use their down time to make outgoing calls and create their own picture of their key customers.  As customers called during the day they added balls to one of three jars that represented the customer. 

Think broad: Customer proximity is a multi-layered concept and can be killed by many things:  The messages leaders give through careless use of language, the lack of credit given to customer insight behind a commercial success, the exclusion of the Market Research team, the lack of skills training given to a team grappling with a challenge - and the list goes on.  Our conclusion is that a programme of customer proximity has to start with a thorough exploration of all the potential land mines and enablers of success ahead and a plan made to deal with each of them.

A North Star:  Many organisations are crystal clear about the type of relationship they want with their customers.  Ryan Air knows its’ customers care about price and traditionally were content to have a ‘take us or leave us’ relationship.   Amazon know their customers want efficiency above all else, so rather than cultivate a relationship they just deliver time and time again.  First Direct are clear they stand for ‘Adult to Adult Banking’.   John Lewis on the other hand is famous for it’s service levels, knowing that both their colleagues and customers value good manners and helpfulness.  But some organisations have unwittingly developed schizophrenic relationships with their customers.  Energy companies for instance; you hate them when the bill arrives and you love the guy who fixes the boiler.  Love and hate wrapped up in one relationship!  Customer proximity can reveal complexities like this within an existing customer relationship. Ultimately a decision has to be made about the type of relationship you want to have with your customers.

Out of office:  Customer proximity is a ‘doing’ sport.  You need to invest time in activities that will probably seem unproductive or even unpleasant.  A great deal of our clients privately admit to being uncomfortable with their customers, dig deeper and they admit that they fear their customers won’t like them.  And most of our clients can always think of a better use of time than to leave the office for half a day to go shopping, cooking or just talking with a customer in their home.  Also we have not been trained at work to observe or ask open questions.  The way we work today actually rewards rapid judgment.  So to ensure customer proximity gets going we need to address these issues; a challenging but safe series of out-of-the-office experiences, training in listening and observing and designing experiences that expose colleagues to a 360 view of experiences including those beyond your product field.   A critical tool is to regard all that you see, hear or read as a ‘clue’ just a single data point that you can squirrel away and build out into an insight with colleagues later on.

Leading for customer proximity:  Whilst it’s important for leaders to get out of the office and experience the reality of a customer’s life, it is also important they have a philosophy on how to lead for customer proximity.  Clearly they need to role model, they also need to ask challenging questions of their teams; “Do we really know what our product competes with?  What are customers not telling us in our research? Do we know if we have better insight than our competitors?”  Leaders also need to ensure they give permission to their people to explore.   Very often we meet employees who complain they can’t free themselves up to get close to customers, then we meet their bosses who complain their people won’t take the time to get close to customers!

Finally, customer proximity is not an end in itself.  The insight we get from getting closer needs converting to better products, services and processes.   How colleagues first share a hunch, grow and mature the idea that the hunch has created is critical.  Any programme of customer proximity needs a partial vacuum at the back end – insights need to be sucked into an idea process and then discarded or quickly developed.  Our experience is that the best insight and ideas processes are low on process and high on behaviours – how people work together is more important than following a best practice process.  The latter is easy to develop, the former takes a lot more guts and practice but ultimately is much more rewarding. 


Monday, 28 April 2014

Eyes Wide Shut

We are publishing exclusive research today about how large businesses are leading for innovation in post-recession Britain.

For a brief synopsis of the research, and some techniques to help your business innovate, click here through to our website.  

Brian Groom, Business and Employment Editor for the Financial Times, has also written about it on page 3 of the Financial Times - Click here to view or visit my press page.

Tuesday, 18 February 2014

In Praise Of Imperfection

Most of us spend our working lives figuring out how to make our product or service more attractive. How do we get more bums on seats, bigger basket size or share of throat? However we describe it, our job is to make things better for customers. 

The same applies to each and every one of us at work.  We each have an agenda, a project or an idea that we need to land.  We need to figure out how to make ourselves and our work so attractive that colleagues and customers beat a path to our office / cubicle / hot-desk and demand to help out.

No one likes a smarty-pants, the smug know-it-all who always seems to be one step ahead.  In contrast we all have a soft spot for the well-intentioned colleague who is sweating over the quality of his or her project.  And this is where imperfection plays such an important role.  Finding a way to present thinking that is 90% baked (and looks it) with an exhortation to co-create the final 10% is a real skill. 

At ?What If! it has taken us many years and hundreds of project assignments to work out the difference between just-unbaked-enough (encourages co-creation) and fully baked (no need to engage).  It takes guts to share an idea in a way that says “help me get better” as opposed to an idea that says “I’m perfect, I don’t need your help”.

Here are three practical tools that will magnetise your toughest challenges:

1.  No PowerPoint – find a blank wall and tell the story of your idea with hand drawn flip charts or supersize Post-it notes.  There’s something more thoughtful and personal about sharing thinking like this rather than the usual deck.

2.  Make it physical – if you are presenting options to a group of people get them to stand up and move to the option they instinctively prefer and ask them to describe to the rest of the group why they chose that option.  This creates a natural ‘advocates’ forum.  Now the level of debate is much more passionate and personal.

3.  Signal – be explicit with your audience how you’d like them respond.  Something like “I’ve been working on this for a week, I’ve done my homework and would love your help shaping the options”.  An exhortation like this changes the atmosphere in the room, corridor or phone call.  Suddenly we all line up behind shaping the best outcome.

The paradox is that if you want to absolutely nail something, to be the one who is known for being 100% buttoned, then somewhere along the line you will need to unbutton and embrace imperfection.  

Wednesday, 8 January 2014

The Casting Muscle

There’s been a storm of interest in Zappos's recent announcement that it was getting rid of traditional management hierarchy.  The Washington Post has a good summary.  Click here to view.  In a nutshell the idea is to organise people around the work to be done rather than organise around job titles and pay grades.  The goal is to keep a growing business nimble deploying the best groupings of people over a limited time for a specific ‘job to be done’.

Innovators, especially those in large organisations, take note.  Innovators play a delicate and subtle balancing game.  On the one hand you need a thick skin, supreme self confidence and the tenacity of a barnacle but on the other you need to listen hard to others and to enjoy a level of paranoia that leads you to constantly question the status quo and your own performance.  This crazy mindset-mix is much better achieved with a small number of people working together on a project, with huge attachment to the outcome and not the process.

At ?What If! we try hard to cast the leadership of tasks and projects in pairs or small teams.  We find a well matched pair can inject more than double the audacity, support, experience and fun than a single person leading the same task.  And surprisingly, the level of responsibility and feeling of ownership is if anything enhanced rather than diluted.

Innovation needs an over-active casting muscle.  For most organisations - to be constantly asking ‘who needs to work with who to get an outstanding result’, rather than just allocating tasks to the ‘appropriate person’ is new.  So look around you now; how many of your key innovation, change or shake-it-all-up tasks are being led by a single person, and could be re-cast?


Friday, 21 June 2013

Doing the right thing

Yesterday a parliamentary review ‘Changing Banking For Good’ delivered a stinging verdict on the performance of UK banks and behavior of many bankers.  This was a serious exercise with the great and the good working over 6 months, interviewing hundreds of witnesses and hearing 161 hours of evidence.  Among the recommendations are more demanding remuneration regimes for bankers and more competition for retail and corporate banks.  Hooray!  That all sounds good to me – but the real turning point for our financial services institutions won’t come with regulation.  It will come when the concept of ‘customer’ is tattooed into the souls of bankers – I mean branch staff, their supervisors, head office staff and corporate lenders.

All companies have to pay some regard to their customers – I would argue that banks have found this hard.  Take retail banks where customers are on the whole disengaged from their banks, they don’t expect much and don’t consider changing to a new bank.  On the other side of the counter bank staff have to contend with a myriad of rules and regulations.  It reminds me of a project I did once for a famous pizza chain – they had 47 separate standards when cooking and serving a pizza.  The poor pizza operatives (yes that was their job title) were so afraid of the mystery shopper that they didn’t even consider the customer – their god was the 47 standards.

Only when bankers get a deep understanding of who their customers are and what turns them on will they get truly motivated to deliver the highest standards.  Not because a regulation says you must or must not do something – but because you have a connection with someone, someone you want to help out, someone you want to do the right thing for.

Wednesday, 12 June 2013

Technology 1: Humans 1

There was a piece in yesterday’s FT that caught my eye.  Adidas were claiming 3D printers had dramatically reduced prototyping time.  Before = 12 people to create a prototype, Now = only two.  Before = up to six weeks to evaluate a prototype, Now = just one to two days!  So, hooray for technology.  These are impressive statistics but it’s not the speed of a single round of prototyping that’s the issue – the big win is how many more iterations you can pack into the development process.  Ironically technology has made the interaction between human beings even more relevant.  It takes guts and a big dose of humility to manage an iterative development process.  Admitting you didn’t get it right first time, leaning in and listening to your colleagues’ interpretation of results – maybe more junior colleagues at that – these are the prerequisites of an experimental approach to ‘making new stuff.’ 

Want a blow-by-blow account of how to become a virtuoso experimenter?  Read Chapter Three of my book ‘The Science of Serendipity: How to Unlock the Promise Of Innovation In Large Organisations.’ 

To order a copy please click here 

Friday, 19 April 2013

Remote Working, Red Herring

The ban on home-working at Yahoo! by its CEO, Marissa Meyer last month, resulted in a twitterstorm of indignation. Hot on her heels, Best Buy has also stopped a programme which had been introduced back in 2005 allowing employees to work when and where they chose. Both companies are in need of a pick-me-up and both cite the need for human beings to collaborate and collide as drivers of prosperity.
But simply banning home-working is a blunt instrument that risks missing the point altogether. I've seen some terrific working practices that promote innovation, efficiency and engagement amongst co-workers - whether you work from home or not.....

See press page for link to full article or click here