In Six Commandments for Surviving the Customer Revolution, we shared a manifesto for companies in the age of the empowered customer. This post dives in on the first commandment discussed in the manifesto: be teachable.
We often hear companies claim that they are customer-centric, that they are customer-obsessed or that they are customer-driven. But despite these claims, companies have never been more fragile - and brand loyalty is practically dead.
The fragility of companies today requires companies to learn quickly. But what does it actually mean to be teachable? Companies that learn from their customers do things differently from those that don't:
1. They engage all stakeholders.
Matt Kleinschmit, Senior Vice President and General Manager of Vision Critical's Integrated Consumer, Retail & Shopper practice, says that to be teachable, companies have to focus on getting feedback from all stakeholders. "Instead of running on detached authority, these organizations continually engage with stakeholders and incorporate feedback into future interactions."
Not all stakeholders are within the company. "A teachable organization recognizes they don't have all the answers internally," adds Andrew Grenville, Chief Research Officer at Vision Critical. "When companies realize that their customers really own the brand and that they are just stewards of it, they see the huge importance of listening to and engaging with customers."
Yes, CEOs can learn a lot from their board of directors, the CMO, other members of the C-suite, and directly from employees. But engaging people outside the company - especially customers - is just as important. In fact, CEOs are starting to recognize this: customers are now just second to the C-suite in terms of the influence they exert in the organization, according to an IBM study. Today, more companies are starting to experiment with co-creation and other similar initiatives to engage stakeholders outside their own walls.
2. They embrace vulnerability.
Learning from customers requires being vulnerable - something that many established companies aren't comfortable with. While it is difficult to hear, negative feedback provides the necessary insight for proper course correction.
"The equity of brands that are willing to learn resides in relationships rather than features or attributes, providing a foundation for change, adjustment and evolution," Kleinschmit says about teachable companies. "Through the power of this relationship, companies can be self-deprecating, able to withstand scrutiny and amenable to humor."
Negative feedback plays another important role: it reveals customer perception about the company. Andrew adds, "A teachable company recognizes that their brand is not what the company says the company stands for, but what customers perceive it stands for."
To be teachable, you have to change the culture in your organization and recognize that negative feedback is just as valuable as customer praise.
3. They make customer feedback a priority.
Companies that put customer feedback in the front seat tie customer metrics to incentives. But the companies that are able to link these two together successfully are taking a smart approach.
"Your customer metrics must correlate with financial and strategic goals," advises Rob Markey of Bain & Company on the Harvard Business Review (HBR) blog. "Without such a link, it's hard to justify differences in compensation."
These companies are also using only trustworthy and well-understood metrics. More importantly, customer metrics need to be supported with "tools, processes and leadership support for learning and improvement," according to Markey.
By being smart about how you link pay to customer feedback - and by putting in place the different tools that allows for continuous learning - you have the necessary ingredients to make feedback a priority and to learn from your customers.
4. They take action.
To be teachable, companies need to do something with the information they collect. But one typical approach to customer listening is to simply aggregate people's input into a number - scores, percentages, averages, etc.. This approach will not suffice.
"This common mistake completely obscures any individual customer's voice and prevents employees from linking the feedback to a particular event, behavior, or action they can remember," writes Rob Markey on HBR. "Yet there's something irresistibly seductive about numbers that seem so rigorously mathematical."
So what's the solution? Grenville says it's about identifying the implications of what you learn and using them to enhance your business.
One company that does a good job of turning insight into action is NASCAR. "When they first really modernized their marketing, they started with one premise: listen to the fan and let them tell us what the brand is and is not," reveals Andrew. "They've followed that principle ever since. They consult their fans continuously, listen to what they have to say and then act on it."
The Official NASCAR Fan Council, an insight community of fans, helps NASCAR engage people who are passionate about the brand.
"The Official NASCAR Fan Council provides NASCAR the opportunity to gain valuable insights in a timely manner," says Brian Moyer, NASCAR's Director of Market and Media Research, in an interview with Direct Marketing News. "[It] has enabled our most avid fans to have a voice, and more important, be heard."
5. They adapt.
Companies require flexibility to learn from what customers are saying. Grenville says learning requires organizations to "not do what they have always done. "
Campbell Soup Company illustrates how companies can use customer insight to adapt its business strategy. In an interview with CMO.com, Campbell CMO Michael Senackerib says customer engagement has helped the company understand the differences in different customer groups. "That's changing some of the ways we go to market with some of our products, as well as the amount of digital, mobile, and social media that we're involved with in the marketplace."
Campbell's 'Go' line of portable soups, for instance, was "largely informed" by customer insight "in terms of the flavor varieties and how we're looking to engage with those customers," according to Senackerib.
Kleinschmit says Campbell Soup Company does a great job of engaging its customers to understand how their eating habits evolve. "They're adapting their products to meet these needs."
6. They close the loop.
Taking action is great - but smart companies also recognize the importance of letting customers know what happened with their feedback.
"[Customers] want to know that the time they invested sharing feedback meant something and was acted on," says Markey in his HBR article. "Closing the loop is essential to building lasting customer relationships, and it is an invaluable opportunity to dig more deeply into the details of what delighted or enraged them."
To close the feedback loop means to communicate specific details on what happened to people's input. It requires sharing results to customers in a language that speaks to them and in ways that they find engaging. Often, a short video from one of your executives might work better than a lengthy report in closing the feedback loop.
Brand loyalty is not just a marketing thing anymore: for companies to thrive today, they need to embrace the insight of their customers and apply that to everything they do.
Is your company a teachable company? What can companies do to show customers that they are open to learning? Share your thoughts with us below, and download Six Commandments for Surviving the Customer Revolution for more information on how your brand can survive the customer revolution.