{"id":3609,"date":"2014-12-15T16:16:37","date_gmt":"2014-12-15T16:16:37","guid":{"rendered":"http:\/\/blogs.kent.ac.uk\/kbs-news-events\/?p=3609"},"modified":"2015-01-28T11:34:29","modified_gmt":"2015-01-28T11:34:29","slug":"understanding-the-needs-of-your-customers-and-consumers","status":"publish","type":"post","link":"https:\/\/blogs.kent.ac.uk\/kbs-news-events\/2014\/12\/understanding-the-needs-of-your-customers-and-consumers\/","title":{"rendered":"Understanding the Needs of your Customers and Consumers"},"content":{"rendered":"

\u201cWe can only truly mitigate risk in the decisions we take and how we allocate scarce resources if we have an expert understanding of our marketplace.\u201d<\/em><\/p>\n

Following the introduction<\/a> to this series of four blogs on Building a Strong Value Proposition, <\/em>we focus on market research and the importance of understanding the needs of customers and consumers.<\/p>\n

Prior to the network session, we encouraged participants to reflect on what they thought they knew about what their current customers and consumers value. Our reason for asking this question lies in the following discussion:<\/p>\n

Why is market research so important? <\/strong><\/p>\n

Participants commented on the desire to use the network meeting as an opportunity for \u2018simplifying\u2019 and \u2018zooming out\u2019. This was the point at which our Expert for the day got on all fours and started to inspect the carpet closely, before jumping back up and surveying from afar, a response that entertained, intrigued, and left participants a little confused! It was then that the Expert clarified what he was illustrating:<\/p>\n

\u201cIt is okay to talk about \u2018zooming out\u2019 if we refer to the necessary move from an operational to strategic level thinking process, but to zoom out and generalise before we really understand what is going on in our specific marketplace is dangerous as we may be basing our decisions on nothing more than assumptions, \u2018gut feelings\u2019\u201d. <\/em><\/p>\n

The Expert had a point. Too often our decisions in life are based on assumptions and inaccurate information.\u00a0 In his book \u201cThe Signal and the Noise\u201d[2] Nate Silver, an American Statistician, talks about the dangers of making approximations, along with the importance of finding the objective truth. We individually process information everyday by approximation. If we didn\u2019t, we wouldn\u2019t be able to function. We pick up on patterns and regularities in our environments. However the more information there is, the more stuff we have to fight through to find out what\u2019s really going on.<\/p>\n

Nate reminds us that \u201c90% of the information in the world has been created in the last two years alone\u201d [3]. This would be good if this data added to our understanding of the world, but the fact is it doesn\u2019t. The majority of this data is stuff we already know; it adds nothing to our existing understanding. Nate labels this as \u2018noise\u2019.<\/p>\n

This is where we can fall into a trap. We can begin to believe that our approximations of the world are real and accurate and we can pick up on patterns that do not really exist. Still this is the type of data that we use to base our decisions on, including how we run our businesses and allocate resources. What is to be recognised here is that we can only truly mitigate risk in the decisions we take and how we allocate our scarce resources, if we have an expert understanding of our marketplace. We do need to be realistic here, our understanding of our marketplace will always be imperfect, and so it\u2019s about gaining as much insight as possible.<\/p>\n

What is the difference between a customer and a consumer, and does this matter?<\/strong><\/p>\n

The distinction between a customer and consumer is an interesting one, and one challenged by our business owners, so we sought to clarify these terms. If we run a Business to Consumer (B2C) organisation we engage directly with consumers, the \u2018users\u2019 of the end product.\u00a0 If we lead a Business to Business (B2B) organisation we will be supplying our products and services through a \u2018gatekeeper\u2019, one who holds the key to the end consumer.<\/p>\n

In B2C it is easier to understand the needs and wants of the end user, as you will often see them \u2018consume\u2019 the product or service, providing you with valuable feedback. However in a B2B business, you will have to work harder for this market intelligence. You will need to work with and through customers. In doing so, you\u2019ll need to be careful that you do your own research on consumer need, rather than accepting what your customers believe is the case.<\/p>\n

I remember a story that a business owner told me that is pertinent to this discussion. The business owner ran a firm that manufactured blinds (hereafter called \u2018Blind Co.\u2019). He met with the department store John Lewis and their sales team presented some market research that they believed pointed to a consumer need for do it yourself (DIY) blinds. Studiously the business owner returned to Blind Co. and began designing the product. After considerable resource and time were expended, he returned proudly to John Lewis to present the product – which they promptly displayed in their stores. Time to sit back and watch the orders roll in (or so he thought) – but they didn\u2019t as there was little interest for this product from the marketplace. The business owner had taken the customers understanding of the market as red and had not checked these assumptions through his own research – and in doing so, had remained blind to the marketplace (excuse the pun!)<\/p>\n

Market Research does not have to be Expensive: Our Top Tips<\/strong><\/p>\n

As we have highlighted above, all too often we can rely on subjective assumptions: our instinct, what our \u2018gut\u2019 is telling us; instead of collecting, interpreting and using objective data on our marketplace. There is often a view put forward that market research costs an arm and a leg. However, our resident Expert challenged this view and provided some Top Tips that business owners can use to challenge their thinking on what customers\/consumers value.<\/p>\n

First there is where to find information<\/strong> and here we have the \u20183 T\u2019s\u2019 – Till Roll<\/em> (who you sell, or have sold to), Talk<\/em> (to stakeholders \u2013 customers, consumers, stakeholders (e.g. Government) and competitors) and Twitter<\/em> (social media). At this point, one participant remarked \u201cMy customers don\u2019t complain, so they must be happy!\u201d Here the Expert challenged participants to move beyond smiley faces, to get to a deeper level of understanding about why your customers\/consumers make the purchasing decisions they do. There are dangers in making assumptions, and not asking why they are happy, and how you could make them happier!<\/p>\n

So there is a need to think about what to ask<\/strong>. The \u20185 W\u2019s\u2019 were introduced as a way to develop our own inquiry processes and learn about our customers\/consumers. A customer\/consumer conversation might go something like this:<\/p>\n