At a recent Comotion Breakfast Briefing, Stephen Ingledew, who until recently was the Managing Director, Customers and Marketing at Standard Life, presented ‘Five key steps in developing a customer driven business’ based on his many years of experience and lessons with established financial services businesses.
Most recently this was with Standard Life, where he led the transformation of the marketing and customer functions using the latest creative thinking and new technology capabilities in digital, data and disruptive innovation.
This is the second of 3 blogs about the insight and learning Ingledew offered and looks his approach to addressing the challenge of becoming a customer driven business.
Understanding the customer; building better conversations through deeper insight
The second major theme of Ingledew’s breakfast briefing was that of the customer, and more specifically how to put the customer in the driving seat of change. (The first topic, covering the internal challenges was dealt with in blog 1 of this series.) For Ingledew, the customer has to be core to driving transformation. He also recognised that in established businesses with legacy systems and attitudes, achieving this was a significant challenge.
A key driver of the desire to change to a customer driven organisation is the opportunity to build relationships with customers that replace ‘selling’ with value driven conversations. There are two phases required to achieve this ambition:
- Creating better understanding of the customer
- Interacting with the customer in more conversational ways
Creating better understanding
Ingldew suggested that one of the key parts of gaining customer insight is to start by recognising that customers are, inevitably, emotionally driven. The majority of decisions they make are driven by emotion – even if they may then be post-rationalised. Recognising this affects not just the obvious channels of communication and customer service, but also those of customer risk management and ultimately product development.
To put this into a practical context requires that organisations shouldn’t just ask ‘what made the customer do this…’ but also ‘what were they thinking when they did this…’. The second question inevitably requires a broader understanding of the customer, but it also needs a business process that is prepared to find and act on the answer. It may also take the conversation out of a specific product context. The example Ingledew gave was that whist customers may not be prepared to talk about pensions, they were prepared to talk about broader emotional subjects like financial security.
There is a real possibility that recognising emotional drivers can completely change every aspect of marketing. It certainly changes the desired outcomes from communication and changes it from broadcast to a series of conversations amongst equals. In some instances this may be taken farther and produce conversations that are totally driven by the customer.
Data obviously lies at the heart of this process. Ingledew describes a series of data objectives that must be achieved to facilitate much of the rest of the programme:
- Data must be well managed – There are a number of elements to this. In the first place data has to be identified, it may rest in a variety of different places within the organisation. It needs to be consolidated and cleaned to allow insights to become available.
- Data must produce answers – In Ingledew’s experience some of the key successes can be through making data more accessible to all levels of the organisation. That can mean supporting empowerment through allowing data driven decisions at a much lower level in the business than before. It also could mean creating data visualisations that can be used at a senior level.
- Data must be used to support and create metrics – in parallel with improving decision-making through an organisation, data should be used to measure the impact of those decisions. The more this is possible, the more agile an organisation can be.
- Data must be about the future – whilst historical data is useful, the real power of customer-focused data is being able to predict the future. Predictive analytics linked to excellent customer knowledge is one the keys to becoming a truly customer driven business.
One of the core requirements of using data in this context is that of producing a single customer view. Without knowing and recognising all the interactions an individual has with the business it is impossible to create the customer focus needed to have sensible conversations.
Interacting with customers
Ingledew emphasised the importance of creating genuine conversations with customers that are based on their lives, emotions and needs. This is a long way from the traditional ‘product-driven’ messaging that is the staple of much marketing communication. Ingledew was also adamant that all conversations with customers must be bundled together. He feels that, for instance, customer complaints must be included in a central customer management and communication process.
A second key element of creating excellent customer interactions is that this should be the responsibility of the entire organisation. This means that throughout the business, people are encouraged to recognise the customers from a data point of view and at an emotional level.
This is important in helping ensure that all out-bound communications are joined-up. But it’s also central to creating the environment where the culture changes can genuinely take root. Ingledew also noted that, at the outset, the people who know the customers best are likely to be those on the front line who are engaging more frequently. Their understanding has to be utilised in the organisation through the processes of creating multi-skilled teams and empowering them to become more influential.
Ingledew acknowledged that design thinking wasn’t a new concept. It is, however, central to customer led transformation. It offers a way to deliver concrete outcomes to the customer understanding and empathy revealed through the use of data and culture changes described above.
It also allows the customer into the discussion about which products and services they require.
An additional benefit of thinking in service design terms is the increase in agility and responsiveness from the product development teams. This is especially true when those teams are genuinely cross-functional.
Putting customers in the driving seat of organisational thinking requires significant change. It shouldn’t be seen as a quick process, although it is one where quick wins can be found.
It does require a significant input of both technology and human interaction. It also has benefits that are perhaps unforeseen and can prevent organisations from being seduced by technology. Where customers lead the thinking, ‘shiny new stuff’ is just seen as an enabler which facilitates products which meet real needs.
Customer driven thinking can ensure better relationships between brand and customers. It allows businesses to create better products more quickly. Ultimately it allows them to create products that sell themselves.