Tuning in to the Customer's Voice: Hearing the Spoken and Unspoken Messages

Jackie Bivins and Janet Murphy, Ogden Associates, Inc.
Marshal Cohen, NPD Group
2005
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One key aspect of Customer Centricity is understanding and anticipating the needs of your customers and prospects. Retail execution that synchs well with customer needs, desires and goals (whether articulated or not!) will result in improved customer satisfaction, increased customer retention and higher sales (and margins).

Today most retailers are quick to analyze sales data and other information that tracks how customers have behaved in the past, but face more struggles when trying to really understand the psyche of these same customers -looking at their buying triggers and motivations, uncovering latent needs, and more. That’s where the use of both quantitative and qualitative market research, marrying proven techniques with new tools and technologies, comes into play.

In the newly released Customer Centricity Study, conducted by the National Retail Federation and Ogden Associates, a major increase was noted in the percentage of retailers seeking direct input from their customers on a daily basis: 36%, up from just 9% a year-and-a-half ago. Other major indicators of retailers’ commitment to hear and respond to the customer’s voice are revealed in the study. The study also highlights that savvy retailers know that there is much more to be done.

Help in understanding retail consumers is available from many sources. For example, the findings from the NPD Retailer Customer Satisfaction tracking, based on NPD’s 600,000 online member panel, indicate a plethora of causes of customer satisfaction (or the lack of same). The top ten of these relate to various aspects of how “good value” and “quality” are being perceived. In addition, there are countless potential reasons for dissatisfaction - service (or lack of same), checkout, sales people and disorganized stock.

The results of both the NRF and Ogden research and of NPD’s ongoing consumer research clearly validate how important it is for retailers to build a true dialogue with the customer, leading to a deeper relationship, which in turn yields richer customer insights.

As this White Paper from the NPD Group and Ogden highlights, there are both tried and true methods and exciting new technologies available to enable the retailer to hear the voice of the customer so what is heard can be quickly acted upon to drive quality and value throughout the retail organization.

Customer Satisfaction Feedback Methods

How can you better hear what your customers are saying – and better understand what they are not? There are many different approaches, each with strengths and limitations. The first step, though, is to determine what needs to be learned, or uncovered, through your customer research. A clearly focused objective is necessary so that the best method or combination of methods can be determined for achieving the research goals.

Also, data that is already being generated as a by-product of day-to-day customers interactions, including, but not confined, to purchase history should not be ignored. Indeed, all opportunities to collect information should be maximized and systems put into place to keep track of this and update on an ongoing basis.

Certainly this information can be made even more meaningful with the use of third-party research complemented by the retailer’s own market research, and especially when a very strategic approach is put into place to truly listen – and respond to the customer.

The following is a checklist of research vehicles but no matter what tool or technique is selected, retailers need to make certain that these will be well received by their customers, as well as internal staffs. The strengths, weaknesses and an example of each are highlighted in the table below.

Exploring Beyond the Obvious

Market research experts agree that there is a certain bias inherent in many of the research methodologies used to date. Customers who are willing research participants often tend to be skewed at either end of the spectrum – they are either extremely pleased with their experiences or they have a beef that they want to share. The challenge continues to be how can you obtain useful, actionable information from all of those in the middle?

Certainly there have been great strides made. The use of new technologies and techniques, such as methodical observational research (often using a combination of video technologies and in-person observations), is helping retailers get at richer levels of insight. They are finding ways to uncover not only the expressed needs of customers but, just as importantly, what they are not saying but may be thinking.

Leading retailers across industry segments are recognizing more and more today that their market research efforts can yield even more meaningful results when they have a holistic vision of why, how, and what customer data to collect and how that data will be analyzed and ultimately used for advantage in Marketing, Merchandising, and Operations. The goal is to capture actionable customer insight and use this to drive performance across the organization.

Today it’s possible for retailers to take seemingly disparate data and integrate it for advantage, for example combining customer purchase histories with market and customer research findings to establish a solid base of business intelligence on which to ground decision-making concerning all aspects of the customer experience. It’s not a one-shot deal. It’s a matter of establishing processes to gather customer insight on an ongoing basis, ideally as a natural by-product of day-to-day retail operations. The insights gained can in turn drive positive transformation in marketing, merchandising, store ops, store layouts, and all other retail touch points where critical interactions with customers take place.

Why is Dialogue So Important?

Talking to customers in ways relevant to their precise needs and providing them with merchandise that meets obvious as well as latent needs, is more critical than ever before as customer loyalty and customer retention become key metrics of retail success.

Customer dialogue can progressively reveal information about customers’ lifestyles and life stages, and customers’ needs, wants, and aspirations. Once merchandise buyers are provided with a comprehensive view of the customer as a human being with a lifestyle, life stage, attitudes, and preferences, merchandising decisions can become more proactive and less reactive. Customer insight can then be used to better anticipate and influence customer needs, rather than merely to analyze and react to them. Decision-makers, including retail marketers, merchandisers, store operations staff and marketing people armed with such knowledge have clear advantages over the competition.

It’s only through cultivating such understanding that retailers can put in place the combination of attributes such as service, merchandise, pricing and promotions that will not only deliver positive experiences for their customers, but that will increase customer retention, and drive sales and profitability.

Customer behaviors are only partly measured by historical trends; current customer satisfaction measures, in-store observations and other market research methods help build the total picture of the spoken and non-spoken messages from your customer. Success is achieved when delivery of the retail experience consistently not only meets but exceeds the customer’s expectations.

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