Understanding the Buyer ‘Why’ and Why It Issues
Traditionally, companies collect customer feedback and measure sentiment in a variety of ways, from surveys to satisfaction ratings to phone calls and focus groups. While these are important in collecting feedback, they lack one key element: understanding the “why” of customer behavior.
In the new digital first era, we need to evolve by only capturing the “what” of customer sentiment as an indicator of purchase or retention – what they think and feel – but also understand the “why”. Why does a customer buy, why do they turn around, why are they loyal?
In a traditional world where product came first, it was much easier to track sentiment through scores and other measurement channels. In the digital-first world, where the product is largely digital, there is a new way to understand the behavior of digital customers and use that intelligence to transform experiences from the place where value is created and shared – from the digital product itself.
Don’t just take my word for it. A recent survey of nearly 300 executives worldwide found that only 16 percent of respondents consider the Net Promoter Score (NPS) a reliable indicator of long-term success. NPS was the holy grail of customer sentiment, and now only a small fraction of executives rely on it as a key measure of customer satisfaction.
Traditional sentiment measurement tools are only useful for measuring results: Was the customer happy with the experience or not? First, they’re not real-time gauges, so they can’t tell you about the journey that took the customer to that point as they take it. After measuring the facts, companies are put into a reactive mode and their ability to actually identify and correct an experience at the moment of impact may be limited.
To use an analogy, using customer sentiment to measure the health of your business is like assessing the quality of a vacation by checking whether or not you have returned home. What you miss are all of the sights and memories, the highlights and the flat tires along the way that really create the experience.
With the explosion of digital-first companies, the understanding of digital customer behavior must fundamentally change and use this intelligence to transform experiences in the moment. It’s time to get in that car and ride with your customers.
One of the greatest opportunities in transforming into a digital-first company is to leverage the power of data and digital product analytics to deeply understand and customize the experience in the moment to both transform customer value and maximize business results .
To find the “why” of the customer, look inside the product
With product analytics, any team responsible for creating and delivering experiences – product teams, marketers, and engineers, to name a few – can get a unified view of all customer actions taken through a digital product experience, and those insights to help Use adaptation of experiences. And the best part about it? It takes data previously locked behind BI tools and an army of data scientists and puts it in the hands of the teams that can do something with it.
I’m not talking about clicks, visits, or feelings – I’m talking about understanding why a customer is engaged and loyal over time, and how those actions correlate to better experiences and results. And pull that data in real time to customize experiences in the moment.
When you can use the “why” and link it to retention and lifetime value, then the magic of great experiences happens. In fact, 86 percent of executives in the aforementioned survey believe customer retention and retention have never been more important in a digital-first landscape.
Take Peloton, for example. The fitness company, whose sales soared to $ 1.8 billion in 2020, achieved tremendous success by closely monitoring the behavior of its customers both inside and outside the product. David Packles, product director at Peloton Initiative, shared how the company’s multichannel customer experience revealed that online constituents organized their own training clubs. They saw an opportunity to build on this organic movement with new, community-focused product offerings. They ran a series of experiments and carefully monitored the implications to eventually find a winner: adding a hashtag feature. Today, more than 50 percent of Peloton members use hashtags – an adoption rate that most digital businesses would kill for.
We are moving through a unique change. Digital is now firmly at the center of every interaction between a company and its customers. There are now two types of businesses: digital disruptors and those that are digitally disrupted. The digital disruptors understand that traditional approaches to understanding customer sentiment are no longer enough in this new era. Welcome to the modern era of digital product analysis.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.