Acquiring Customer Insight During a Pandemic

August 2020

Although the world is full of mediocre products, great products come from a deep understanding of the underlying customer problem. The knowledge that you gain from understanding these problems is called customer insight, and this is different from the stream of feature requests that are coming in. Although any feedback from customers is helpful, feature requests by themselves typically have very little context on which to build products that create real customer value.

Customer insight, on the other hand, brings deeper understanding into what the customer is really trying to accomplish. This insight is rooted in customer behavior, and is not easy to extract. An excellent definition of customer insight is given by Paul Laughlin:

"A non-obvious understanding of your customers which, if acted upon, has the potential to change their behavior for mutual benefit."

Mutual benefit captures both the benefits the customer receives from additional value that is delivered as well as the long-term value for the organization delivering it. Laughlin points out customer insight is non-obvious, as it does not come from just one source of information, nor just from analysis or research, but a convergence of evidence. As differentiation becomes more difficult in today's market based on reduced barriers of entry driven by technology platforms, deepening your organization's ability in deriving customer insight for value-driven product development should be core to your strategy to differentiate your offering in the market.

There are many methods on how to gather customer insight, and although the COVID pandemic has put some constraints on a few of the most powerful approaches, driving focus in your customer insight process along with leveraging technology such as web-conferencing can actually help your organization overcome the limitation of not being there in person.

Acquiring Customer Insight

There are many methods of gathering information to derive customer insight, but there are a few prerequisites that are very important to get right.

First and foremost: do you really know who your target customer is? Does your organization have a clear and consistent understanding of the person you are serving? You would be surprised at how many companies do not. It's easy to say "Yes, we serve the Enterprise technology buyer", but who really is this person? What is the their exact title, their demographic, their background? This is the foundation of the Customer Persona, heavily used in design-thinking and therefore popular in creative agencies, marketing departments and user-centric technology development organizations. If you don't have your target customer well defined, you should stop here and define them.

Less is definitely more in defining who your customer is, and you should seek to articulate only one, if at all possible, as this focus drives clarity and purpose in your organization. However, depending on your product or solution, you may serve multiple customer types with different features, and the development of multiple personas will be beneficial in this situation. The key is to understand, at a deep level, who you are serving with a specific product or service and use that target for gathering relevant insight.

The second prerequisite is to ensure the insight you are deriving is actionable. There are several behaviors your customer has and several insights that can be gleaned from these behaviors and needs, however if these insights do not align with the value proposition of your organization and its offering, then they are not actionable. Actionable insights, on the other hand, directly align to your organization's ability to serve, and are therefore crucial in the development of differentiating features.

The above prerequisites drive focus, ensuring your efforts in deriving insight are as effective as possible to driving product development towards customer value.

There are many methods of gathering information for insight, both in-person and remote. Examples of in-person methods include one-on-one customer interviews, focus groups and customer roundtables. In-person approaches are very effective, due to the fact there is so much said with body language, in addition to what is being said verbally. The goal of gathering insight is to sincerely put yourself in the customer's shoes so you can deeply understand their world, and few things are better than visiting with a customer in their own environment. Being onsite with a customer allows you to note the nuances in their environment that are driving their behavior, and actually see them interact with your product.

Intuit, the company behind extremely successful products such as Quicken, TurboTax and Quickbooks, excelled at this with their 'Follow Me Home' program started by founder Scott Cook. In the early days of Intuit, Scott actually waited outside of a local Staples, watching customers come out the door. If they were leaving with an Intuit product, he would ask to follow them home to watch how they installed and used the product, noting all opportunities to improve the overall experience.

Although this approach was key to Intuit's success, you can't imagine doing something like this today during the COVID-19 pandemic. Fortunately, there are several other methods to gather information for insight that do not require in-person engagement, and can potentially be even more effective.

Customer Insight During COVID-19

During this pandemic, many of us are under travel constraints and confined to working remotely from home. Although this definitely keeps us from directly interacting with customers in their own environments, there is actually a benefit here. Going back to Laughlin's definition, the key to deriving actionable insight is through a 'convergence of evidence', and this would come from interaction with multiple customers. Think about how much money, and more importantly time, is spent actually travelling. Instead of spending 2 days (including travel) visiting with one or a few customers, think about how many you can speak with over web-conferencing in that two days when all of that travel time is reallocated to more customer discussions.

Web-conferencing provides us with an extremely simple way to reach out and have face-to-face discussions, including sharing of screens to actually see how customers are interacting with your software. Virtual roundtables are also easily arranged and allow for customers to interact with each other to share problems and best practices, allowing you to gather information on what is important to them and their pain points.

Of course, one thing to be sensitive of is screen-fatigue. Many of your customers are probably on back-to-back Zoom sessions daily, so the addition of another Zoom meeting can be taxing. Do all you can to make it a fun experience for them. Be flexible with scheduling so that you meet with them on a day when their meeting load is light. Fridays are usually good as people typically have a reduced meeting load at the end of the week. Also, make sure to let them know that nothing is expected for them to prepare ahead of time, that you are only going to be asking them for their opinions on some topics that will help you make a better product for them. This is not a meeting, but a friendly chat where you want to learn more from them on how you can simplify their life.

The insight you gather during these sessions can not only help you with decisions on new features, but also continues to deepen your understanding of the customer and update your customer personas as you go forward.

Asking the Right Questions

Once you have established a list of your target customers willing to provide information, asking the right questions is absolutely imperative for gathering actionable insight. You are not merely seeking information on how they would like to see a feature implemented, but trying to get at the underlying problem they are trying to solve. This is where innovation lies. Once you understand the root cause problem, with some creativity, your team can come up with novel approaches to solving the problem. Novel ideas lead to competitive differentiation, and in some cases, potential for disruption.

A beneficial technique to use for these customer interviews is the 'laddering method'. This technique originated in consumer research, and is similar to the 'Five Whys' in the Toyota Production System root cause analysis. This interview method is used to peel the onion back from what a customer is describing as a desired feature to get to the underlying value that they are seeking.

Let's look at a relevant example of this method: the K-12 teacher during the COVID-19 pandemic.

Interviewer: "What is your biggest challenge right now in teaching a remote class?"

Teacher: "Engaging the students and keeping their attention"

Interviewer: "Why do you think this is different from when they are sitting in class?"

Teacher: "Because they are distracted sitting at home. They're not forced to watch me."

Interviewer: "Why do you believe they are distracted?"

Teacher: "I guess school is not as fun as some alternatives they have at home."

And we will stop here. You don't have to use all five of the whys in every situation. The art in the laddering method is also knowing when to stop before frustrating the person being interviewed, and also understanding when you have reached a point to where you have gained actionable insight, or at least an hypotheses that you can test. In this example, if you are a technology provider for K-12 education, you would use this insight to begin an investigation into how to deepen student engagement. Perhaps first you would segment the market into grades 1-5, 6-8 and 9-12 and then create hypotheses on what types of remote learning methods would be the most engaging for each segment of students. At this point, you are now creating a new persona for the remote student, a strong influencer in the buying decision. This could then lead to possible solutions for technologies that would deepen interest for students at home, such as gamification, YouTube videos on relevant subjects, and collaborative discussion sessions depending on the student segment.

You can also use this technique for near-term decisions by kicking it off with an hypothesis. Starting with a visual mockup of a product or web page, help you customer visualize what your proposed solution is, and then use the laddering technique to gain deeper understanding of what value it would deliver to your customer. The insight gained from this approach can help you prioritize your features for your next release based on the value it would deliver.

The Customer Advisory Board

For ongoing development, consider formalizing this process with a Customer Advisory Board. Think about your target personas, and establish a working relationship with select representative customers that have shown an interest in being a part of your development process. A great way to find these customers is by noting who is providing the most feature request feedback, but also make sure they can help describe the trends that are shaping their work. Make membership in the advisory board exclusive and establish benefits for the members such as free prototype access and sample products. Establish a bi-annual or quarterly cadence of advisory board meetings, and provide the board with visibility to your roadmap and new product development.

Quarterly advisory board meetings are an excellent time to ask questions related to that quarter's key product decisions, including feature priorities, how a feature is to be implemented, along with longer-term platform decisions where relevant. The key for obtaining great insight is ensuring your board is made up of a diverse group of your target customers. If you are serving a global market, then it will be important to have members from different countries involved to gather insight on regional differences of opinion. If your product serves multiple industries, make sure to have each industry represented. A great benefit for your customer board is being able to share ideas and best practices with their peers in different regions of the world. Having cross-industry representation provides your board members with access to ideas outside of their own industry along with preventing competitive concerns from limiting the discussion.

And back to our example with the K-12 teacher, since you will be handling these sessions over web-conference instead of in-person for the foreseeable future, make sure to consider how to keep your group engaged in these sessions, as even adults can get distracted when working remotely.

The COVID-19 pandemic has brought about massive challenges for our economy and our businesses, but also building up tremendous pent-up demand. Make sure to use this time to maximize customer insight into your development process so your company comes to market with customer-driven, differentiated features that allow you to capitalize in the market recovery.