Do you remember the summer of 2011, when Netflix split their DVD and streaming businesses and increased prices by 60%? As a result, Netflix lost over 800,000 subscribers, their stock price fell to less than half its previous value, and the company became one of the 10 most hated companies in America. Netflix was in a death spiral because they ignored customers. (From How Netflix dropped the ball by ignoring customer voices.)
How are you ignoring customers?
While companies jump on the Customer Success bandwagon with amazing speed, most ignore their customers. They pore over spreadsheets analyzing customer churn, build customer journeys designed from an internal perspective, and provide ad hoc services, hoping customers figure out their own journeys.
You can’t innovate without understanding customers
Of course, Netflix recovered. Reed Hastings, Netflix CEO, apologized and earned back public trust by understanding customers. “Netflix did something fundamental: they listened to people,” says Jim Joseph, president for North America at Cohn & Wolfe. “They’re really paying attention to what consumers are asking for, and they’re giving it to them.” (From Netflix Turnaround Shows Power of Listening.)
Listening to and understanding customers is the key to moving your company and your customers toward success. Mike Gospe, an expert Customer Advisory Board (CAB) facilitator and co-founder of the Kickstart Alliance shared with me, “Whoever understands the customer best wins. This means that when all products eventually become commoditized, the vendor-customer relationship will become the only relevant differentiator.”
Empathy is our ability to see the world through other people’s eyes.
In my article, Customer Success Starts with Empathy, I describe how to use a design thinking process to innovate. The crucial first stage of the design process is empathy, which is our ability to see the world through other people’s eyes. Empathy mean listening. Walker emphasizes in their Customers 2020 report, that companies must engage in a collaborative, consultative relationship with customers. “Input and insights from key customers are a commonly overlooked source of intelligence for innovation and transformational change. They can be instrumental in brainstorming, co-creation, prototyping, beta-testing, and in relaying where trouble spots exist in the journey.”
How to listen to customers.
Casual conversations are a great way to start. Pick up the phone and call a customer. It’s that simple. Ask how things are going. And then listen. At Jaspersoft I made it a priority to call one customer a week to listen to suggestions for improvement. The customers I listened to were instrumental to our innovating the customer facing programs. When I work with companies to create customers for life, I build customer interviews into the assessments I conduct and then include those findings as impetus for innovation.
Build listening touch points along the customer journey.
In the Harvard Business Review article The B2B Elements of Value, Eric Almquist, Jamie Cleghorn, and Lori Sherer identify the need to “talk with customers to understand their experience. Conduct follow-up interviews to explore their needs and sources of satisfaction and frustration, and the compromises they make in using your products and services.”
Once you start the listening process, next build listening touch points along the customer journey. These could include product advisory boards (PABs), customer advisory boards (CABs), user communities, networking events, user conferences, and road shows. When customers are in town and at company and industry events, schedule a few minutes to connect in person. Listen to their pain points and ask how they would fix things.
Mike Gospe emphasizes the importance of coordinating the listening points. “When building a voice-of-the-customer program it is important to use the right tool for the right job. In other words, you want to ask the right questions to the right individuals, at the right customers, who can actually answer your question. Nothing is more wasteful and confusing than asking the right question to the wrong customers.” See Mike’s valuable overview of the difference between CABs, focus groups, and user conferences.
Listen to a full spectrum of customers.
Don’t make the mistake of skewing what you hear by listening to just a handful of customers. Walker indicates, “Engage a diverse group of customers in innovation activities to understand what questions customers ask themselves regularly and design solutions that meet current and future customer needs.” So, reach out to not just the decision makers, but also the end users and the administrators. The B2B Elements of Value article describes, “Make sure to conduct interviews in a spectrum of customer organizations, especially those at the leading edge of growth in their industries. Avoid using an existing customer panel or user group, whose members might say what they think you want to hear. And consider conducting the interviews through a neutral third party, because customers are more likely to provide honest feedback to an intermediary.”
Customers love listening to each other.
Networking opportunities and user communities give customers the platform to share best practices and to learn from each other. The CS2020 report indicates, “More companies are beginning to understand the importance and value of initiating ways for customers to network and learn from each other. Customer councils, user communities, discussion forums, and user groups offer opportunities for customers to interact and share best practices with each other; solving problems before they occur. Customers see tremendous value in learning from peers, and it’s often difficult for them to organize such encounters on their own.”
Don’t make the same mistake Netflix did. Instead build empathy, listening, and understanding into your Customer Success and customer facing programs. Pick up the phone today to listen to a customer. You just might create a customer for life.
Donna Weber leads the customer success practice at KickStart Alliance and is the president of Springboard Solutions.