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Published 28 August 2012 06:08, Updated 29 August 2012 05:58
Human touch ... To innovate businesses must understand customers as people — nuanced, dynamic, unpredictable — not just collections of data.
Across industries, companies are using the vast amounts of user-generated data to guide innovation of new products and services. But data mining does not equate to developing “customer intelligence.” Human behaviour is nuanced and complex, and no matter how robust it is, data can provide only part of the story. Desire and motivation are influenced by psychological, social, and cultural factors that require context and conversation in order to decode.
Data can reveal new patterns that point a firm in the right direction, but it can’t indicate what to do once there. It reveals what people do, but not why they do it. And understanding the why is critical to innovation.
A WINK OR A TWITCH?
Think of the last time someone winked at you. With that simple gesture the person was able to communicate. Yet, how did you know what it meant? Anthropologist Clifford Geertz posits that all of our behaviours are imbued with socio-cultural significance. Interpreting their meaning and the motivation behind them requires what he calls a “thick” understanding that comes from detailed observation of people’s interactions and their environment. In the wink/twitch example, customer intelligence would only tell us that there was eye movement — not what kind or what it meant. It misses the “thick” understanding that is critical to meaningful innovation.
Several years ago, a client engaged Continuum to design new products for base of the pyramid (BOP) families in urban Brazil. We set out to understand the needs, values, and motivating desires of the people for whom we were designing. In conducting our field research, we observed that virtually every family owned a television. This was not a huge surprise — any report can tell you the rising percentage of technology ownership among families in emerging markets. But when we dug deeper, we learned that the TVs were not status symbols or signs of increasing wealth; they were safeguards. Because of the violence prevalent in the favelas where these families lived, parents feared their children going out at night. What these parents really wanted was a way to make the living room more entertaining than the streets.
Customer intelligence might have told us the percentages of TV ownership among BOP Brazilian families, but it never could have illuminated the why. Building on this insight, we leveraged our client’s capabilities to transform a staple product geared toward parents into an engaging experience designed for kids. In prioritising parents’ deeper needs, our client regained market leadership.
WHEN THE DATA TRAIL GOES COLD
Increased computing power, ubiquitous consumer tracking, and ever-more-effective data mining techniques do offer significant advantages to business. Trends can be identified more quickly and precisely than ever before. But the fact remains that any trend, however early it’s identified or robustly defined, can’t tell you how to succeed.
When Clorox entered the “green” cleaning market in America, routine trend analysis had revealed that while the overall cleaning products market was stagnant, the “green” niche was growing. Basic consumer intelligence indicated that consumers were becoming more environmentally conscious, but that people often didn’t know how to act upon their changing values toward green. The company’s own intelligence suggested the emergence of a new and underserved segment of “chemical avoiding naturalists” who had not been attracted by existing offerings from Seventh Generation and Method. But that’s where the data trail ended.
Abandoning quantitative data analysis, Clorox conducted in-depth interviews and in-home ethnography to better understand the psychology, unmet needs, and underlying values of these “naturalists” — and what it would take for them to switch to green home cleaning products. The insights gained allowed Clorox to stake out a positioning of “natural” vs. “sustainable” that resonated with this segment. They designed not just a product but an entire experience comprising utility, accessibility, aesthetics, information, and emotional resonance.
Clorox Green Works has been credited with not only dramatically expanding the market for environmentally-friendly cleaning products in the US, but also helping the sustainability movement gain traction by revealing that for mainstream consumers environmental concerns are first and foremost about what’s “in me, on me and around me.”
KNOWING TOO MUCH
In an effort to be more customer-centric, companies today often jump to apply their “customer intelligence” to guide product and service innovation. Armed with data, companies feel they “know” their consumers. But knowing about someone is not the same as knowing them. Confusing the two is the difference between a transaction and relationship.
Recently, we spoke with a young man who had soured on his medical provider when they leveraged customer intelligence to “help him.” While driving to work, “Kurt” received a call from a woman on behalf of his doctor’s office. The system showed that he had not refilled his depression medication in several months. She asked him if he was still taking the medication and reminded him that it was important. Kurt found the call extremely uncomfortable and paternalistic. “It’s weird to be an adult and have some stranger call to tell me to take my meds,” says Kurt. “It felt like someone was watching me, making sure I followed orders.”
Kurt’s doctor likely had the best of intentions: keeping Kurt well. But Kurt was left feeling that the office had exploited its knowledge of his behaviour to control him. In fact, Kurt intentionally stops taking his medication every once in a while to evaluate whether he still needs it. Yet the doctor’s office took none of these factors into account in its interaction — coming off as Orwellian instead of caring.
There are certainly ways to use customer data to strengthen relationships and improve people’s lives. But those actions — and interactions — must be thoughtfully designed to respect people’s values and build trust.
To innovate for a future in which consumers’ desires and habits change as quickly as their mobile devices, businesses must be nimble in delivering emotional connections beyond just functional utility. That requires understanding customers as people — nuanced, dynamic, unpredictable — not just collections of data.
Lara Lee is the chief innovation and operating officer of Continuum, a global design and innovation firm. Daniel Sobol is a strategist at Continuum.
Harvard Business Review