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.
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