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Customer Insight and Metrics

Customer Insight and Customer Metrics form the foundation of the Customer Experience approach.  The information below provides a brief, and hopefully thought-provoking, overview of these two essential topics.

Customer Insight

-         Why Do Customer Research?

-         To Research or Not to Research: That is the Question

-         Customer Research Principles

Metrics

-         Why are Metrics Important?

-         Good Metric Criteria

-         Examples

 

Customer Insight

Why is it important to do customer research?

“In a consumer-driven company, the ‘R’ in R&D is lots of customer research.”  --Scott Cook, Co-Founder of Intuit, Inc.

“It’s always fascinating to see how many of these commands that we put in there aren’t used at all.”  --Bill Gates, Founder of Microsoft, Inc.

“The ability to learn faster than your competitors may be the only sustainable competitive advantage.”  --Arie De Geus, former Royal Dutch/ Shell executive and business book author

 

To Research or Not to Research: That is the Question

When Research Helps:

-         you lack information needed to make a marketing decision

-         you are trying to choose among alternatives

-         there is an internal conflict over an objective, strategy, or policy

-         you detect symptoms of a problem and want to understand the cause to try to improve the situation

-         your business is doing well and you want to know why so you can exploit what you’re doing right

-         you are undertaking something different from the status quo: new product, price, distribution, package, market segment, etc.

When Research May Not Help:

-         you know what you need to know to make a decision

-         the information already exists

-         you don’t have enough time or money to do the research right

-         research could tip your hand to a competitor

-         you cannot obtain a representative sample

-         cost of research exceeds the benefits

-         findings will not affect decisions

-         problem is unclear and objectives are vague

-         the research is not feasible technically

 

Customer Research Principles

-         Focus your research objectives on the most important issue(s)

-         Design action oriented research:

- What business decisions do you need to make?

- What data do you need in order to make those decisions?

-  What’s an effective and efficient way of gathering that data?

-         Respect customer feedback; don’t assume you know what the customer wants and needs

-         Don’t expect too much of market research; be aware of its limitations

-         ‘Garbage’ data can lead to disastrous conclusions and business decisions

-         Be creative and resourceful in your approach

-         Focus on your objectives, not on implementation

-         Develop hypotheses but also keep an open mind

-         You can ask any question and get an answer to any question you want but what you need are valid answers

The first step in initiating a new customer research project is to figure out your strategic direction.  Use the Research Strategy Form to identify and capture the essential elements for your research project. 

Metrics

In order to measure how well you are doing in your marketing efforts, it is essential to identify the metrics that matter most.  The metrics chosen will not only help to determine goals but will also be the yardstick by which success and progress is measured.  The metrics must measure something that is important to business results and can be measured accurately, consistently, and efficiently.   

Good Metric Criteria

-         metric drives business results

-         metric reflects business results

-         metric is something you can influence

-         metric can be measured accurately

-         metric can be measured consistently

-         metric can be measured cost effectively

-         key stakeholders agree key metrics meet these criteria

Examples of Metrics

The following lists just a few examples of key metrics in different Customer Experience areas.  You may measure standard metrics used widely by many businesses, and/or you may develop custom-designed metrics specific to your particular business.

Customer Acquisition metrics include awareness levels, information sources used to make purchase decision, and cost of customer acquisition.

Product Wow metrics include ease of use, satisfaction vs. expectations, and longitudinal usage patterns.

Customer Retention metrics include retention rate, RFM, and recommendation rates.

About Suzanne Taylor

Suzanne Taylor is a marketing consultant who helps companies acquire more customers, create great products, and improve customer retention.  Her area of expertise is building businesses through customer driven innovation.  A member of Stanford University's faculty, she has taught seven marketing classes through Stanford Continuing Studies and holds Stanford AB and MBA degrees.  She co-authored a book titled Inside Intuit: How the Makers of Quicken Beat Microsoft and Revolutionized an Entire Industry published by Harvard Business School Press. She also instructs and serves on the Advisory Board for U.C. Extension in Silicon Valley's Marketing Certificate program, teaching marketing and executive education classes.

Taylor’s client list includes Intuit, Adobe, PayCycle, Yahoo!, Palm, Microsoft, and several high-tech startups.  Taylor worked for Intuit, Inc. for eight years in a variety of marketing roles including Quicken product manager, customer insight, and corporate marketing.  She also worked in brand management at the Clorox Company leading marketing efforts for Fresh Step cat litter and Formula 409 spray cleaner brands.  Taylor has led product teams through the full product development life cycle and has managed all elements of the marketing mix, both online and offline.  Symantec selected Inside Intuit for a company-wide management book club discussion.

© Copyright Suzanne Taylor 2010.  All rights reserved.  Contact: staylor@serrano.com