Customer Insight managers would like a new job - internal customer consultants, called in to give ‘insightful’ advice whenever action is needed.  Being a trusted advisor starts with knowing that insight is more than a report of the latest sales figures.

“A moment’s insight is sometimes worth life’s experience” said American poet Oliver Wendell Holmes.  When we think of insight we think of it as rare and valuable, discerning and perceptive;  a knowledge that transcends the superficial and gets to the heart of the matter, to find its inner character:  a character hidden to the less discerning.

Insight in the world of customers can be either ‘flashes of inspiration, or penetrating discoveries that can lead to specific opportunities’ like mining for diamonds.  Or, more usually, a deep understanding of the customer in the context of the market.  Insight is the ability to get into the customers head in a way that is valuable to the business.  The insight that customers think blue washing powder gives a cleaner wash than white, even though the chemicals are the same, is not that useful to a telecoms company, but key to a detergent manufacturer.

Insight unlocks the ‘secrets’ of the market underlining threats and pointing to opportunities.   Which indicates it has several other characteristics:-

• It should be useful, and actionable
• It needs to be ‘of its time’ and can include both hindsight (perception gained analysing the past, and foresight (perception gained from modelling the future).
• It is not obvious to others or easily found

In the 2005 drive for e-government efficiency, scant attention was paid to service quality, by public organizations with little innate marketing knowledge. Only when the deadline passed was the searchlight turned on the customer’ and employee inventiveness set loose with CRM techniques borrowed from the private sector.

“We have to accept that having ALL government services online by 2005 is not as good as having BETTER services online.  The only reason we should be doing any of this is if we can deliver better services.“ - Dr Ian Kearns, Head of the Digital Society Programme at the Institute for Public Policy Research (2002)

From Gershon to Varney

In 2005 a report I wrote on the public sector and concluded that

” despite assurances that the modernisation drive, currently focused through the Gershon Report, was to reallocate resources from back-office to front-office for service improvement, customers still seem to have a back seat - somewhere behind the back office”.

The advice to public sector then was to make eGovernment more effective by adopting new customer centric marketing techniques - rather than old mass market ones.  Looking at customer relationship management activity in the public sector this year, I believe things have indeed moved that way and changed for the better.

The focus for Government CRM initiatives is now the 2006 Varney report on service transformation.  But the real drive for improvement seems to be coming bottom up and particularly from non-central Government organizations like local authorities and the police.  At a recent conference the ‘man from the ministry’, sent to outline the plan, seemed distinctly behind the game.

” A target culture without a citizen’s perspective is intellectually and morally bankrupt.  Excellence in public services cannot be achieved by centrally driven targets and national league tables alone.” Julie Spence, Chief Constable of Cambridgeshire

Companies are not fair to us – that’s the view of almost half the UK adult population. In 1980 only 14% thought this way; now 44% do according to nVision from Future Foundation. Nearly two decades after loyalty theories radically changed the business world, average loyalty has declined, whilst consumers have strengthened their recommendation and switching muscles. That’s a dangerous situation for companies to be in.

“Companies that want to improve their service quality should take a cue from manufacturing and focus on their own kind of scrap heap: customers who won’t come back.” So begins the seminal article on customer loyalty, ‘Zero Defections: Quality Comes to Services’ by Fred Reichheld and Earl Sassar in Harvard Business Review 1990

If customers today think that companies are more unfair to them than in the past then companies must accept they are not delivering value for money, that customers to not trust them to be ‘on their side’, and that their brand values need to be inspiring – not internal.

As the original loyalty theory by Reichheld said, feedback is the guiding voice for a systematic approach to building human assets. Loyalty is more relevant today than ever, 80% of customers will continue with a company to whom they feel loyal, especially the over 40’s and more educated, but understanding the ‘best customers’ to invest in is still the key. No one will ever achieve 100% loyalty, and not every customer is capable of it.

Back in the ‘way back when’, there used to be a little mantra about building loyalty, it still applies as a good engagement process, but we now have more tools to achieve it.

• Recognise me (but don’t force me to remember complex passwords!)
• Know me (but don’t be too familiar until I deem it OK)
• Act accordingly (by making life easier and solving my problems)
• Communicate (and listen)
• Respect and involve me (but don’t waste my time, understand my goals)
• Anticipate my needs (because you know things I don’t, that’s your value )
• Show you care (about me, and about society)
• Appreciate me (thank me for my business and involvement)

People often used demographics when describing their customers: some will add a lifestage view (25 - 35 years with children), some may add a value (people who aspire to healthy living), and some may add a lifestyle (sportsmen). But few use all three to describe the context of their customers’ lives. Yet, it is in this context that ‘unique selling propositions’ are to be found. Additionally, as a 2007 report by McKinsey found, not understanding this context is creating a trust gap between consumers and organizations.

Pigeonholing consumers into lifestage as a start, is a pretty reasonable gauge for needs: Shakespeare’s ‘seven ages of man’ still elicits wry smiles, whatever our age. But today’s ‘lover sighing like furnace’ is more likely to check his mistresses views on climate change before texting his ballad. For each generation has life shaping values, and astute companies must monitor these to guide their value propositions.

As the world enters a new economic stage, how are trends in cultural values playing out with different generational lifestages?

How are the ‘freedom protesting’ baby boomers approaching their retirement, will they differ from today’s austerity pensioners? How are generation Y coping with their mobile lives, and are emerging teenagers ‘hoodies’ or ‘greens’?

To start with differentiate between lifestage, values and lifestyle – all of which drive customer behaviour.

1. Lifestage – is based on demographics (age, and family situation). Young families naturally have different needs to young singles, empty nesters from older families.
2. Values – are what people aspire to and spring from two sources, upbringing and culture. Generational values are laid down in formative years and shape our life view, even as cultural values shift. For instance, how does the 60s generation react to the green values of today’s culture, and does this differ to the 80s generation?
3. Lifestyle – the way people actually behave given their environment.

For the report Bridging the Trust Gap which looks at how values are affecting different lifestages resulting in various lifestyles, click here.