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MR and Customer centricity

In Uncategorized on May 5, 2016 by sdobney

Edward Appleton in his entertaining and provocative market research blog asks “why, given that Market Research and Marketing been preaching customer-focus for decades, so often one experiences lousy customer experience?”

Put simply, it’s because driving profitable sales is the aim of the business. A business is not trying to sell to everyone – it sets a price and and offer and then pushes the product. It uses research to understand if the offer and price will maximise return, and to tune promotions and sales messages. It uses satisfaction to ensure the product delivers on its promise and then trims costs and smooths processes to shave pennies. It is customer-centric to the extent it needs to be to make the revenue.

For instance, a business doesn’t set the lowest price possible. It doesn’t offer the same level of service and support to someone paying $10 as someone paying $1000. The task of the managers is to optimise the sales outcome within the resources available. So research has value if it helps tune the machine, not if it just leads to more and more calls for resources, or calls for changes in direction, or purely adds cost to make happy customers with no sales impact.

If this sounds a bit brutal, the customer is playing the same game but from the opposite side. They are trading off a premium customer service against a basic cheap and cheerful. They’re also looking for the deal. They’ll fly Ryanair or Easyjet, buy Hauwei over Nokia, shop in Aldi rather than Sainsbury’s. In other words, customers will choose to buy from non-customer centric businesses if the price and offer are right. They might also use resellers to buffer the service elements if they think the deal is worth it. So in some cases getting the nuts and bolts right is exactly what the business should be focused on (eg utilities and ‘lean service’).

And if you look historically, a number of large businesses with big research teams doing good research have disappeared over the years – having good research doesn’t necessarily hit the sweet spot. You can try to add too many bells and whistles.

Getting the optimum point of delivery is hard, and means being crystal clear on what will drive sales and what are just nice-to-haves. Yes, programmes like VOC are good and debates about what the customer really wants (and will pay for) are vital to avoid the organisation being too inwards looking.

But I’d also agree with Edward, that sometimes MR can be too heads down into surveys, results and insights. It could be much more about facilitating the discussion about customers and experimenting/ investigating on how to maximise customer value. How many researchers this year have been out in the field with sales teams, or sat and done customer service work, or spent some days on the shop floor? How often does the insight team run workshops to to examine internal views of customer journeys and interactions? How many get involved with writing the business plan or a financial sales forecast? And with DIY research, there’s a whole element of mentoring managers on the best ways to research customers.

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