This works well when facilitated, cross-disciplinary teams of employees explore customer scenarios from the customer’s point-of-view. The team considers the customer’s preferences (needs, wants and expectations) as they evaluate relevant system interfaces, business rules and work/information flows.

The facilitator’s role is to be sure the group stays on track and considers touch points from the customer’s point-of-view.  They must also help the group remain mindful of the big picture as participants can become preoccupied with particular sticking points.

In the process, participants are well-served to consider broader questions: What are our target customers looking for, and how has that been changing over time? Why do they choose our product over that of our competitor’s?  How can we further tip the scale in our favor?  What are the benefits versus the costs?

This simple exercise typically results in new insights about service processes that can be rapidly put into practice and supported by the larger organization.

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As always, I’d love to hear your perspective…

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It feels like we’re at the dawn of a new era in understanding how people — namely our customers — make decisions, and some businesses will benefit enormously. More importantly, customers will soon enjoy more kinds of services designed to better meet their needs.

Our collective thinking is being informed by discoveries in behavioral sciences and behavioral economics about the role of the unconscious mind and the centrality of emotions in driving behavior. Many of these findings are now verifiable through neuroimaging tools.

Among other things, we’re realizing that people aren’t Vulcan-like beings who make choices on a cold, purely rational basis. Individuals — our customers — are complicated and swayed by factors beneath the level of consciousness.

Insights about how people are wired have been rolling in for decades. But lately, these insights have penetrated the mainstream consciousness due, in part, to the popular writers like Ori and Rom Brafman (Sway) and Dan Ariely (Predictably Irrational), among others, who are distilling social science discoveries for mass audiences.

These findings aren’t causing companies to rethink their missions—not yet, anyway. Delta Airlines and Verizon aren’t transforming their business models to accommodate social science breakthroughs, but a subtle and profound shift is occurring.

Out with the old…

I’ve been encountering more clients lately who are moving away from outmoded assumptions about service and toward conducting research to learn what factors drive their customers behavior. Instead of relying on the “if you build it, they will come” principle, businesses are trying to figure out precisely why their customers are buying, or not.

For example, the traditional service model emphasized customer satisfaction (“C-Sat”) which many practitioners still believe is predictive of repurchasing behavior. C-Sat has been universally regarded as a proxy for service quality, but research shows that emphasizing satisfaction alone is an overly narrow focus.  Multiple drivers, unique to each context, play a far greater role in influencing customer loyalty.

In fact, research shows that customers will tell a service provider that they’re ‘satisfied’ yet switch away from the brand for any number of reasons.  Ironically, a majority of people who defect reported that they were ‘satisfied’.

Recently, my team assisted a U.S. retailer that had been suffering from declining retention rates. The company wasn’t aware that their new interactive voice response (IVR) menu frustrated customers who’d been reporting that they were ‘satisfied’ overall.  By asking exacting questions and conducting a proper analysis, the company was able to prevent further market damage.  The fix turned out to be cheap, simple and quick.

The big news isn’t that companies are rejecting C-Sat, but that they’re taking a refreshingly thoughtful, behaviorally-grounded view of their customers which is opening the door for interesting, potentially sweeping changes.

Not so long ago, presenting behavioral research to the “C-suite” caused their eyes to glaze over. Now, forward-thinking leaders are requesting this information to support their business decisions.

What’s next?

It does feel like we’re entering a new era in understanding customers, but we’re only in its nascent stages. Applied behavioral psychologists don’t yet have a seat at the table, but the business community generally seems to be more receptive to their findings.

I think we’ll recognize the next stage when traditional organizations focus on using behavioral research to design services that are more compatible with human needs. Until then, keep your eye on the agile, innovative companies who are internalizing insights about their customers.  You’ll recognize them by their customers who are enjoying richer, more immersive service experiences and returning for more.

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As always, I’d love to hear your views on this subject….

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Want more info on this subject?

Scholars who are contributing to the growing body of social sciences and economics knowledge include Amos Tversky, Daniel Kahneman, Richard Thaler, and Robert Shiller.

Here’s info about my company’s (Osprey) decision-support services and Customer Insight Lab.

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While it seems like everything has changed, the axioms of business remain constant. Customers still want exceptional “value” – in fact they’re demanding it. They’re more motivated than ever to look for it. If they can’t get it from you, they’ll go to your rivals. They’ll find value in new, atypical ways to get their needs met.  Help them solve their problems and the market will beat a path to your door.

Delivering exceptional value in lean times requires smarter tools and an atmosphere that encourages collaboration and continuous innovation—always thinking: how can we make this better, cutting out what’s unnecessary.

Winning in this environment isn’t complicated, but it’s not easy either.  There’s no silver bullet— don’t let any consultant or supplier convince you that there is a sophisticated methodology or a killer app that will do the trick. 

Succeeding, more than ever, boils down to empathizing with your customers and figuring out what they want as conditions around them change.  Then deliver it as efficiently as possible while treating them to an experience that’s as pleasing as possible. Of course, that’s easier said than done, but it’s do-able. 

These are certainly interesting times for service providers across industries and regions around the world.  For those with the agility and resources to keep improving their offerings and their customer experiences, new opportunities lie ahead.

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Branson said, “I am delighted to announce Virgin’s first business in Russia – Virgin Connect. We have entered Russia with Virgin Connect because we believe the potential for growth in the Russian broadband market is extremely exciting. Virgin‘s fundamental business principle is: ‘Delivering an outstanding customer experience’.”  He added, “We will provide a fresh and human customer experience to Russians and believe that Trivon is the ideal partner to deliver this. Virgin Connect plans to gain a market share of 10% within 5 years in this promising market”.

Trivon, founded in ’04, has bought up several Russian communications operators. They grabbed up the 5.7-5.9GHz spectrum licence across Russia and also acquired a 5.9-6.4GHz spectrum in some regions to set the stage.

It’s a shrewd move. The venture wants to exploit a fragmented, underserved market which only has a 5% broadband penetration rate.  The Russian market still suffers from the legacy practices of their monopolistic, post-Soviet era culture.

The company didn’t provide details about its service model yet but judging by the Virgin Group’s progressive approach to consumer services in other verticals, they could reshape the services industry in a region that lags far behind the rest of the developing world.  I’m betting on Virgin’s succeeding and, in any case, this should be interesting.  Stay tuned…

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