Friday, 7 March 2014

3 ways companies forget about consumer experience and how it affects their business

Marketing professionals love talking about consumer experience. Terms like engaging, responsive, and targeted make up the usual jargon when we take part in any conversation on consumer experience. My interest here is not to double down on the jargon. Rather than convincing you that I have the formula that will make your consumer experience ‘engaging’ I will take a step back.... 

If I want to convince you of something is perhaps of re-thinking the value of consumer experience: the term is not esoteric or ambiguous. It is, simply put, the way in which your clients, regulars or buyers relate and think about your product. There are a myriad of ways in which this can be done. However, in order to be engaging and awesome companies must first understand what their consumers want and expect. It is at this stage where we tend to simplify and assume too much about what our customers want and what our product delivers. 

There are in particular three aspects that deserve our attention: 1) numbers are wonderful, but they can trick us into making unjustified generalizations—acting in fact like a blindfold on our strategic objectives, 2) qualitative data is many times overestimated and we sometimes exaggerate the value of their conclusions—this is what I call the focus group confusion, and 3) many B2B companies tend to dismiss the whole consumer experience discussion as not applicable to them—the truth of the matter is that, if they do, they are missing out on a valuable opportunity to get to know their clients and to leverage the value of their offering.

1.      The numbers blindfold

Scholars like Deirdre McCloskey have blamed economists of being gullible when it comes to the use of mathematical sophistication: the more complex the mathematics the more people will take an economic argument seriously. Her point is simple: numbers are not relevant in and of themselves and thinking otherwise is foolish.

Consumer and market research can be plagued with numbers, which usually tend to confirm most of the intuitions that motivated it from the start. Numbers will allow you to define boundaries for your overall strategic goals. Numbers, however, are often used to make generalizations about consumer behavior. As Nicolas Taleb’s argued in his Black Swan: be always cautious with generalizations and relying too much on predictions. In particular avoid simplifying your product’s audience. People may naturally share opinions, but if you truly want to understand your customers then segmentation and qualitative analysis cannot be ignored. To learn and eventually create a consumer for your product—think IPod or Walkman—simplifying is not the way to go.  Instead, learn, gather and synthesize consumer information, in order to create memorable experiences.

2.      The focus group confusion:

Many research companies and a few agencies love making focus groups. Some even sneer on the quantitative researchers who are unable to grasp the richness of analysis of a focus group. The truth however is that focus groups are anything but absolute truths. There results can never be taken as a last word and comparison with other sources is always desirable.

Malcolm Gladwell’s Blink is a must read in this respect. He discusses in detail the, perhaps now exemplary case, of what can happen when a company is too complacent with conclusions on consumer behavior product of focus groups and of controlled psychological experiments in general. The case in point was the 1980’s Pepsi challenge, which asserted that if faced with a blind test, consumers would always choose Pepsi over Coke. What happened next is what is truly remarkable. Coca Cola conducted blind test replicating the Pepsi challenge and actually concluded that the results were correct: people preferred Pepsi to Coke. Coke’s move was to bring to the market New Coke, which in a word proved to be a marketing disaster.

The lesson then is: never use focus groups! ... I’m kidding of course or half kidding. The reason is that controlled experiments are truly that: controlled circumstances. These circumstances are almost never identical or even similar to the normal circumstances under which a product is consumed. Take the Pepsi challenge, for instance. When does a cola (or soda/pop) consumer will buy a coke, take a sip of it and then proceed to discuss its taste, in lecture fashion, with a third party?

3.      The B2B deception

For many companies the issue of customer experience is completely pushed aside by appealing to their B2B nature: ‘we don’t have customers, we have clients and they are companies so consumer experience is not relevant for us’. Right (?) Well, wrong actually. B2B changes but does not eliminate the importance of understanding and creating the right customer experience. There are two aspects that must be taken into account in the case of B2B: 1) who are the final users of your product or service and 2) what is the relationship between users and partner managers. If your user’s opinion is unknown then your company is missing out on a huge opportunity to learn about what works and doesn’t with your user experience. If, however, your relationship with your client is mediated by a partner manager or simply by someone other than the actual user, this does raise a challenge, which is, in any case, worthwhile taking head on. The strategic goal is to get your client to understand the merits of the unique user experience that your product or your service delivers. Once she gets how important this is for your company, she will be interested in, either allowing you to have direct contact with your final user, or she will be more than willing to relay valuable information coming from your final user to you. The goal is that both parties understand that doing so entails a win-win situation for both.

There are, to be sure, plenty of ways to reconfigure the way you look at consumer experience. The lesson, if there is one, is not to forget it nor think you can do without knowing it. Keep an eye on this second season of writing in the factish—subscription is completely free and you will not be getting any unsolicited emails. Just remember: sharing is caring.

Written by Daniel Vargas Gómez