Importance of Understanding Your Customers

I had blogged on Friday about some instances when listening to customers can lead you down the wrong path. Today, I want to mention some examples, also from the Philadelphia Innovation Conference, of why it’s important to understand your customers.

Obviously, the better you understand your customers, the better you can tailor your product or service to meet their needs, but collecting and analyzing the data in a meaningful way can be extremely challenging.

Games
Paul Koulogeorge, VP of Marketing for EB Games, came to the company 2 years ago. At that time, the company was growing phenomenally – the video game industry is actually bigger than both the movie and music industries – yet they had never conducted a focus group or talked to their customers.

So Koulogeorge began the process of trying to really understand why people would come to their stores and buy games. He set up cameras in stores and observed how consumers shopped and where they ran into problems. He implemented new ways to listen to consumers and receive feedback – such as recruiting teenagers online to tell them exactly what they thought (completely uncensored). And he even had company representatives live with gamers for 48-72 hours to see just how games become part of these kids’ lives.

Gamers shop at EB Games because of the environment. Sure, you can go to Walmart, but you don’t get the same experience. EB Games stores offer tournaments, networks, gaming magazines, and a culture of passionate gamers that appeal to gamers’ lifestyles.

Hotels
Alan Scott of Factiva shared an experience from the consumer side. He often booked rooms for upwards of 30 people a night at a nearby hotel on a fairly regular basis. He generally had a good perception of the hotel except when he went up to the front desk. Every time, they’d ask him if he’d been there before. Obviously, they had no clue who was a good customer and who wasn’t, but one day it got to him. He switched hotels simply because the new hotel knew he had been a previous guest and would welcome him back. This shows how important getting the appropriate information to those who work with your customers can really be.

Banking
In another story about front end clerks, Chas Hermann of Commerce Bank explains how difficult it can be to get information from the people that interact with their customers. To encourage feedback, they created a program called “Kill a stupid rule” to make it easy for clerks who deal with customers daily to send in suggestions.

One suggestion they received was from a clerk that manned a drive through window. For whatever reason, there was a rule that stated those who bank through the drive through could only do a maximum of 2 transactions. The thought was that it would speed up the drive through lines.

Customers didn’t understand the rule, and instead of going inside if they had more than 2 transactions, they’d just drive around the building and get back in the drive through line. They’d then ask the clerk why this policy was in place, which would inevitably lead to an “I don’t know” response. “They” (top management who’s totally out of touch with things) created it.

Apple
This isn’t related to the conference but is still relevant. Seth Godin has recently blogged of how important those who interact with customers can be. See here and here for his Apple experience.

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