Your Customers' Behavior Is a Competitive Advantage

Executives spend a lot of time and effort trying to identify the best employees. Investments in psychological testing, technological programs that supposedly winnow out the imperfect and job descriptions of such daunting granularity that almost no human need apply have all proliferated. Managers have become so persnickety that complaints about 'shortages' of appropriately skilled workers have become something of a common complaint, the theory being that persistently high unemployment is the fault of the workforce itself.

But it may be that enterprises are investing too much time on perfecting their employees and not enough time doing so with their customers.

The fact is that organizations only have so much leverage when it comes to influencing any of the factors that drive performance. They are also constrained by ever tighter budgets as financial imperatives drive strategy. So focus becomes essential, but the question remains, on what?

Data and our ability to massage it have given institutions the ability to explore in what ways their expenditure of effort and resources might best be optimized. And one of the areas that may be overlooked, as the following article explains, is customer behavior.

Investor relations departments in corporations did useful work in this field when they began to analyze how certain types of investors were probably most inclined to be supportive of their sector, their industry, their company and their leadership. Customer loyalty programs have also focused on increasing the likelihood of repeat purchases. And, certainly, marketing execs spend a lot of time figuring how to attract customers and then get them to buy.

But instead of looking purely at demographics or the other aspects of purchase decision-making, they might more profitably assess how various types of customer behavior might reduce the costs of attracting and selling to them, which then improves the odds of a successful transaction, increases the chance of a satisfied customer and of a potential repeat sale.

Data have given organizations the ability to manage aspects of their operations that they couldnt have even identified a generation ago. The challenge now is to figure out how to optimize the impact of that power. JL

Michael Schrage reports in Harvard Business Review:

If a smarter, more knowledgeable or more polite customer can measurably reduce the friction of commerce — or measurably increase the ability to get value from an innovation — than that may be a better investment than boosting the smarts, knowledge or good manners of an employee.
At a reception for JetBlue’s most frequent Mosaic flyers, I had the opportunity to listen to the airline’s top management discuss its ambitions to improve operations and enhance customer experience. The discussion was excellent and — on a whim — I asked one of the most senior executives what JetBlue’s customers could do to improve the airline. He paused for a long moment and essentially responded, “The most important way our customers could improve the airline would be by being more polite.” He talked about how stressful and debilitating it was for ticket agents, gate agents, and flight attendants to deal with rude and ill-mannered flyers. Nicer customers, he maintained, would make for a nicer experience for everyone.
Lo and behold, JetBlue recently announced a series of in-craft “jetiquette” videos for its flyers. The hope and expectation, of course, is that these visual “nudges” will preemptively smooth the air travel’s rougher edges. “We wanted to say, ‘We’ve all been there. We get it, and let’s talk about it,’” declared one JetBlue executive about #FlightEtiquette. “It’s a universal truth of flying.”
As big a fan as I am about organizational learning and the need to relentlessly refresh and renew employee human capital, I’m an even bigger fan of investing in how customers and clients create value. Making customers better makes better customers. Improving employees and associates is smart business. But so is improving your customers and clients. What — and how — your customers learn to make your business run better should be every bit as important as what—and how—you want your employees to learn, as well. Customers need to learn from you almost as much as you need to learn from customers. Serious customer experience design debates in organizations should focus almost as much on customer learning as customer delight.
This point was powerfully reinforced when listening to Nadia Shouraboura, former head of Amazon’s Supply Chain and Fulfillment Technologies and founder of Hointer, an innovative “digiphysical” retail startup, at an Intel roundtable on the future of retail experience. Shouraboura mentioned almost in passing that Hointer’s Seattle store makes a point of digitally keeping track of which customers like being approached by salespeople and which ones prefer to be left alone. But she noted that the data indicated that, “customers who liked being left alone ended up asking more questions than those who liked being helped.”
To me, that behavior’s not counterintuitive or unusual at all: most prospects and customers want the power to choose when to seek help and ask questions. The issue isn’t whether or when retailers should physically approach in-store customers, it’s what expectations retailers want to cultivate and inculcate in their customers with regard to assistance. In other words, Hointer is figuratively — if not literally — training its customers to shop on their own terms. Hointer’s salespeople are as much information resources as people who sell.
That distinction’s not subtle. As both a technology and retailer innovator — not unlike Amazon! — Hointer is educating its shoppers to shop in a different way with different norms and different expectations. The product of that education is not just a more sophisticated Hointer shopper, but a shopper who may now become impatient with the delays, inefficiencies, and inferior experiences proffered by other retailers. That’s where value-added differentiation and competitive advantage come from. That’s why helping customers learn can be as strategically important as learning from customers.
This is where a lot of UX design strategies fall short. Yes, Amazon, Apple and Facebook use data and analytics to learn a lot from and about their customers. But does anyone doubt that Steve Jobs, Jonny Ive, Jeff Bezos and Mark Zuckerberg have done a fantastic job of educating and training their best users and customers to — with apologies to TBWA/Chiat/Day — “Behave Different”?
If a smarter, more knowledgeable or more polite customer can measurably reduce the friction of commerce — or measurably increase the ability to get value from an innovation — than that may be a much better investment than boosting the smarts, knowledge or good manners of an employee. The two aren’t mutually exclusive, of course — but they certainly aren’t the same.
Debate all you want about how best to communicate and sell the virtue of your products and service offerings. But never forget to seriously debate how even tiny investments in improving customers might lead to large-scale insights in improved customer experiences.