The Questions You’re Not Asking May Be The Most Important Ones

By Harry Cruickshank

Amongst his many talents, a good friend of mine (let’s call him Mike) used to be a leading ride and handling engineer at Lotus Cars. He dedicated himself to making cars sublime to drive. After Lotus, he secured a contract with a high-end, bespoke sports car company. They were unhappy with the way their car handled and customers were complaining. This had been going on for months. Mike drove the car and then spoke with the various engineers on the project. He reported back to the frustrated CEO. “The problem is the way you’re designing the car. Each engineer is optimising the bit they’re responsible for, but they’re not talking to each other to optimise the car as a whole vehicle. It’s permanently out of balance.”

In essence, “Mike” had spotted that the disconnected pursuit of ‘excellence’ was creating a product that wasn’t fit for purpose when the elements were combined. If only the company had initially set its focus (and engineers) on creating the end result/outcomes desired by their customers, they might not have found themselves in this situation in the first place.

This resonates when I think about the way companies ask questions of their customers when designing or delivering their customer experiences. Too much time is devoted to measuring “satisfaction” across various elements that a company thinks are important, rather than gathering and focussing on delivering the outcomes that customers expect of their ideal customer experience.

Assumptions (particularly about what gets and keeps customers) can be a dangerous thing. For example; the belief that customers leave mainly because competitors offer lower prices is a common fallacy. It goes hand in hand with the mistaken belief that employees leave because they’re lured away by better offers.

Many research papers undermine these kinds of assumptions. The vast majority of customers defect because the quality of the relationship with the seller is poor or the fundamentals of their expectations have not been met – so there’s no solid bedrock of trust. In a similar vein, most employees leave because they don’t have confidence in their immediate manager and the relationship there is weak.

If we know this to be true, why aren’t companies investing heavily in measuring and evaluating customer and employee relationships in a more meaningful way?

Our team regularly encounters this lack of critical thinking.

The recent Consumer Duty legislation from the FCA is designed to make retail financial services firms adopt a more customer-focused approach to their business operations. One of the key outcomes the FCA wants to see is firms demonstrating a better understanding of their customers. Would it surprise you to know that many firms lack any meaningful customer segmentation data and insights?

We have also seen journalists interview CEOs who state proudly that their goal is to exceed customers’ expectations. When they were asked what those expectations were, they gave a blank look. They had no idea! How could they meet and exceed expectations if they didn’t know what they were? It all comes down to asking the right questions.

If you don’t know much about customers, how can you decide what’s most important to them? How do leaders decide where to invest to improve and strengthen those relationships? Intelligent guesswork and a huge pile of unconnected transactional data points won’t paper over those cracks.

Companies also want to know how to gain and maintain a competitive edge in their market(s). This requires insight into how their customers perceive their performance vis-a-vis their competition. If you’re asking customers how well you’re performing against their expectations of your business, it’s relatively straightforward to also ask them how they rate your competitor’ performance. But the majority of businesses we encounter don’t do so.

This is dangerous stuff. You need to know. There are proven ways to find out and the cost is a fraction of the negative impact on your profitability and value if you’re navigating without a suitable map.

All companies are sitting on a timeline. At one end is high growth and the other end is obsolescence. Every day your business moves in one of those directions, even if it’s just an inch. If there’s a day when you stay still, you’re actually going backwards.

Now is a good time to act.