Organizations need consumer insight for much more than supporting specific marketing or service decisions. Consumer insight is an essential part of a mechanism that tells the organization whether it is meeting its consumers' needs while meeting the needs of other stakeholders. These include owners (such as shareholders), business partners (such as distributors and marketing service suppliers) and staff - particularly those who have to manage consumers, in stores or branches, contact centres, and leisure and transport facilities. This use of consumer insight is very important. Perhaps the best example is customer satisfaction surveys, but we also include measurement of the effectiveness of marketing campaigns and other initiatives.
This area is controversial because despite all the science of market research and customer database analysis, consumer insight is rarely used properly in this area. So rather than bury this discussion in the body of the book, we decided that we needed to air it at the beginning. This gives organizations something else to worry about - whether marketing and customer service are doing their job properly or whether they need transforming. Much in the planning of marketing and management has not changed for years, although the rapid evolution of information and communications technology has changed many areas. Hiture are engaged in a programme of research and consulting in an area we have defined as 'marketing transformation'. Much of the work that we are doing relates to changes in how customers are managed, and in particular how insights into customers are developed and used.
Measuring customer satisfaction has become very big business. Many market research companies make much of their profit from it. Staff measurement and motivation systems are increasingly based on customer satisfaction targets. Despite this, surveys show declining customer satisfaction in most markets. Setting targets and measuring customer satisfaction do not make customers any happier, or more likely to repurchase. Much socalled consumer insight purports to tell organizations what their consumers want, but only tells them what they have said - very different. This may be because if an organization focuses only on what consumers say about its products or services, this can stifle its creativity and limit innovation. Setting staff targets using information based on what consumers are saying they want can make the situation worse. Organizations are driven in the direction of their targets and measures. This is fine if the measures and targets are something that the people in the business and its stakeholders and consumers truly want, but this is rare. Customers may say they want to be answered more quickly in call centres. However, they might give much higher priority to better value for money. They might be happy to make compromises in terms of ease of access by telephone. The success of low-cost airlines demonstrates this.
The targets and measures being set in larger companies and public service organizations have become increasingly complex and controlling in the last few years. 'If you can measure it you can manage it' has spread like a cancer. This led to large-scale customer satisfaction surveys, targets and league tables - and a fall in customer loyalty and overall satisfaction. The focus has been on winning the league rather than offering customers the products or services they want. This focus has become internal, leading staff and the entire organization away from first considering the customer.
League tables and metrics induce stress. They focus mainly on cost reduction and control. Neither motivate staff. They stifle innovation and bold thinking, vital for success. Retention of good staff gets harder. Negative staff behaviour spreads. Perhaps the best example is replying quickly to complaints rather than resolving them. Organizations have targets for so many areas that are nothing to do with the organization's original intent. For a target to move a business the direction its customers would really like, targets should relate to things customers and staff both want, to the real reasons customers buy its products or services, not to transactional factors whose only justification for inclusion is that they are easy to measure.
In many health service organizations, the strategic intent is far removed from where it should be. A health service's reason for being is about helping new humans be born, keeping people as healthy as possible, and where this fails, healing and sustaining them and in the end, helping them die with dignity and minimum pain. For many health workers, measures are not related to any of these. Rather, measures are process and transaction-based, counting beds, people on trolleys, queue lengths, waiting times and costs to serve, all important in achieving efficiencies, but not delivering the service people need.
Wherever there is a disconnect between the internal measures and the real reason a company or organization exists, there is stress, because staff know they are not doing what they should really be doing. Short-term thinking dominates because the organization is only trying to hit the next target. Consumers are unhappy because they can feel the organization's pain every time they deal with it.