Change As Your Customers Change...

Momentum. It's a wonderful thing.

Building up over time, it's a sure sign that you're creating value for customers, and engaging them.

But by the same token, once you've lost it, it's difficult to get back. It's a sure sign that you've not been creating enough value for customers, nor engaging them.

Just contrast the differing fortunes of Whole Foods and Supervalu, or of Apple and Hewlett-Packard over the last few years. 

The harsh reality is that no brand has the right to exist, just because it used to create value some time in the past. Continued momentum comes from creating value for customers today..., and tomorrow.

Of course, it's not wise to wait until momentum has been lost. By then, your customers are already voting with their feet. The warning signs are usually there long before, far better to make the necessary changes as you go along.

This requires bringing the voice of the customer to the heart of the business: listening to them, working with them, and understanding how their lives are changing.

In doing this, I've found a 3-tier approach useful.

Measure how well you're delivering for customers.

It's often said that you get what you measure in business, so it's essential to measure how well you're doing for them.

Identify some lead indicators which measure the overall health of the brand: how useful and likeable you are. There are several ways to do this. I like to use the Net Promoter Score, together with the increase/(decrease) in the number of loyal customers, and their spend.

Next, measure how satisfied your customers are with the core benefits that you bring to them.

Then, identify internal operational metrics that closely correlate with movements in their satisfaction. For example, the length of lines at the checkout may be correlated with customer satisfaction with the ease of shopping. I think of these as critical control points: if you're hitting these operational metrics, then you'll be driving satisfaction.

Work with your loyal customers to create more value for them.

A simple start point is to ask them for regular feedback on what they like, what you could improve on, and other ways you could help.

This was the thinking behind the Customer Question Times Tesco introduced back in the 90s, which invited customers to come along and talk to the management about anything they wanted. Starbucks Ideas took advantage of technology to do something similar. While today, the proliferation of social media tools has made it easier again.

Next, combine this with insights from data on their behavior, to improve their experience with you. This was at the heart of Tesco's transformation back in the 90s, using the insights that came from Clubcard to improve the whole shopping experience. Today, it's possible to go even further, and personalise that experience for them. The way Amazon provides personalised recommendations is just one example.

Then, why not involve them directly in the innovation process? It can help on small things, for example, the taste of a product, or the design of a t-shirt. But it can also help extend your brand into whole new areas that create value for them, and increase their spend with you. The entry of Tesco into both Non-Food and Financial Services, for example, was heavily influenced by its customers, who wanted them to bring their "Every Little Helps" approach to these markets.

Change as your customers change.

However, even if you're measuring how well you're delivering for customers, and working with them to create more value, their behavior can change in ways that they can't envisage. Who could have told you 10 years ago that they'd be downloading music and films online? Or asking their phone for directions?

It's essential to understand how customers are living their lives, how those lives are changing, and what potentially disruptive innovations are starting to get used.

I've found the best way to do this is not by reading reports, or sitting behind mirrors in focus groups. But rather, by taking an ethnographic approach. Visit your loyal customers in their homes, go shopping with them, watch them going about their daily business.

Procter & Gamble famously use such immersive techniques to get close to customers, and uncover unarticulated needs. Tesco did something similar for the insight that resulted in fresh&easy Neighborhood Market, on the West Coast of the USA.

Of course, even if all this is in place, it doesn't guarantee that you'll change as your customers change, while you still have momentum.

That requires strong brand leadership from the top, to overcome the many internal barriers, that will inevitably have built up.

But unless the voice of the customer is there to be heard, it's unlikely that the debate can even take place.

Until it's too late...