How disruptive customer insights drive financial value

Uni of Notre Dame professor of marketing and co-founder of Vennli, Joe Urbany, shares his words of wisdom on how your disrupt your business to listen to the customer

Joe Urbany
Joe Urbany

One small customer insight can lead to millions in extra sales, according to Joe Urbany, professor of marketing at the University of Notre Dame, who spoke at the ADMA Global Forum today.

Urbany, who works with local company, Choice to Growth, and is the co-founder of Vennli, said there is a misalignment between what companies think their customers want, and what they actually want. And it's those gaps that represent financial value.

Closing the gaps can have enormous implications for the financial bottom line of a company. But to do that, organisations have to be brave and be willing to hear things from their customers they may not want to hear.

“The misalignment between what customer wants and what a business thinks they want is huge. Our research shows most companies only have about 48 per cent of alignment with their customers,” Urbany told CMO.

“The good companies are at 80 per cent. And what makes a 20 per cent difference is usually something surprising, and that’s where the money is. This is what disrupts.”

Urbany said the issue is companies being willing to action disruptive insights, because companies are sensitive about putting their customer theories to the test. “There’s never any disruption without an insight about customers and customer decision making,” he said.

“Customer choice completely determines your financials. So how do we understand customers’ decision making? I gave my students a project around understanding the central nature of customer choice.

“We found most of the time we only confirmed about 60 per cent of what we thought in terms of what customers thought, so the other 40 per cent we didn’t know became disruptive. This led to million-dollar transformations, and we formed our own company.”

Related: Building customer insights in the data and digital age

How the insights team within NAB is working to unlock customer data

Urbany said he's repeatedly found that when executives hear evidence of something they didn’t know, or that they have lower value to their customers than they thought, they are disruptive in a positive way because there’s motivation to do something about it. In other words, disruption is an insight that has direct action implication.

So how do businesses get to the disruptive insights? Urbany said asking a customer flat out what they want is the worst question a company can ask.

“Instead, get customers to articulate why they made their choice, and what they value in that choice. Why would they choose your business over someone else? Conversely, why would they choose a competitor over you?" he advised. 

“Never ask customers ‘what they want’, because they can’t really articulate new things from that question. What you do is ask them why those factors are important to them. We all know there’s ‘Five Whys’ to get to root cause analysis, this is also called laddering. It aims to get to the deepest human values and that’s what drives behaviour. Laddering helps you get into unmet needs of your customers."

Urbany said the hardest thing is getting really narrow and limiting yourself. "Start with just a few conversations. Ask your customers about your competitors, and when they are choosing between businesses, what’s the main reason they do so? How can we improve? How can the competitor improve? Why are these things important to the customer? 

“If someone says quality, then ask them what they mean by quality. It only takes 10-15 minutes to get some significant insight you haven’t asked for. This is the simple human value of understanding."

Urbany admitted this can feel counter to a sales conversation. "But you sell more from a non-selling conversation, because the customer loves to be understood. In a sales conversation, the customer is immediately on the defensive," he said.

“The customer wants to be understood, and a small insight can mean millions of dollars. There’s financial value in what you have truly heard.”

After gaining these customer insights, companies need to pay attention to them, appreciate them, socialise them within the organisation, and then action the insights.

“Action is the biggest part, because we all have natural bias and don’t want to hear we might have to change the way we do things,” Urbany added. “They can be tough conversations. But it’s a healthy thing.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Blog Posts

3 skills you need to drive better collaboration

A study published in The Harvard Business Review found the time spent in collaborative activities at work has increased by over 50 per cent in the past two decades. Larger projects; complicated problems; tighter timeframes: These require bigger teams with specialised skillsets and diverse backgrounds, often dispersed globally.

Jen Jackson

CEO, Everyday Massive

Better the bank you know?

In 2018, only 21 per cent of customers believed that banks in general had their customers best interests at heart and behave ethically. Only 26 per cent believed that banks will keep their promises; views cemented further following the Hayne Financial Services Royal Commission.

Carolyn Pitt

Head of account management, Hulsbosch

What 15 years of emotional intelligence told us about youth media audiences

Taking people on an emotional journey through content is the most critical part of being a publisher. Which is why emotion lies at the heart of VICE Media.

Stephanie Winkler

Head of insights, VICE Asia-Pacific

This journey would identify all your future life aspects!

Maryann Humphrey

Open Colleges: one-to-one journeys is the goal

Read more

It's a pretty good idea. I think this integration is useful. Don't you agree?

Misty Stoll

Officeworks hops on voice interface bandwagon with Google Assistant integration

Read more

ok. so no RCS support? by the way, RCS is a lot bigger than 5G in terms of marketing and monetisation so y'all should be covering it.

DragoCubed

Optus goes for education with 5G network campaign

Read more

Many companies and individual merchants have shifted their major part of marketing to web marketing services Portland as it weighs fewer ...

Radiata Solutions

6 Ways to ramp up Social Media to Your Web Design

Read more

This is a unique experience! Will be interesting to talk to their managers.

Joyce Harris

​How Krispy Kreme revitalised its brand in a saturated market

Read more

Latest Podcast

More podcasts

Sign in