jim.hamill@energise2-0.com

When did your company stop listening to its core customers?

I read a nice article recently from Seth Godin called the cycle of customers who care. It provides a useful model to describe how companies grow and to a large extent fail over time in the eyes of their most passionate customers. We've explored some of the lessons that emerge for businesses. Ultimately, this post begs the question, when does a company stop listening to its 'core' customers?

Godin argues that most well-known companies have started out from small beginnings – a group of dedicated individuals delighting a “tribe” of passionate customers. Over time the customer and employee base grows as the company appeals to a  larger market and becomes ever more efficient. At some point the company loses its way, it starts to employ staff that care just that bit less. It soon stops listening or being informed by its passionate 'core' customers.

The evidence of this change emerges as the new design launches and isn't quite as slick as it was or the features as exciting. The exceptional customer service soon rates no more than average. In the eyes of the 'core', the company has 'sold out'.

If we no longer listen then we are lost 

We talk at great length through our work at Energise on the need to focus in on and delight our most valuable, most passionate 'core' customers. We use the term 'core' because these customers are at the centre of everything we do. Listening to them, gathering their opinion, understanding them and aligning ourselves with their values isn't a one-off activity but a process over time. It needs employees that care passionately to do this effectively.

We often reflect on companies that fail and then attempt to understand what went wrong. How did they miss the trend or misjudge the market so badly? However, perhaps we should be spending as much time looking for signs of companies that are listening and equally not listening to their 'core' customers.

Two recent examples illustrate this point:

  • Starbucks: has recently decided to pay tax in the UK which it is not legally obliged to. Until they made this decision, Starbucks had presumably listened mainly to its tax accountants – the tax they paid was legal after all. Starbucks are not alone, other large corporates including Amazon have similar practices. However, Starbucks' core customers are just a bit different from others – they care about the community, the environment, sustainability. Starbucks unfortunately have paid a price in PR terms for not listening to their 'core'.

Source: The Author based on Topsy.com and Starbucks.com
  • Amazon: Amazon provide an HD film streaming service. In this particular example the viewer had watched the film – Casablanca – from beginning to end. Their experience had not been the focus of a complaint however, the viewing experience had been interrupted and Amazon could discern this. Although they didn't need to, they provided an immediate, unsolicited refund. In so doing they acted in the best interests of their 'core' customers and showed they are listening.

Do you really understand your 'core'?

Starbucks did not change their approach because the government, their legal team or tax accountants advised them to. They changed their approach because of their 'core' customer. Starbuck's 'position' with regard to tax was shown to be way out of kilter with the shared values of their core customers – the same values expressed here on their website. In contrast, Amazon acted in the interests of their 'core' customer and in doing this pre-emptively, undoubtedly delighted many more.

Seth Godin's post should remind all of us why we are in business – not to be bland or average or even to maximise short-term profits but rather to be exceptional and a sustained, long-term success. This means delighting our most valuable, “passionate” customers as often as possible. To do this we need two things – staff that care passionately and an ability to really listen.

Of course it has never been easier to listen to relevant comments and conversations online using social media monitoring tools and don't think for a second that companies like Starbucks don't already do this. The type of organisational listening we are talking about impacts every area of the business, from Procurement through to Marketing and asks what would our customers think as much as what are our customers thinking. This type of listening reminds us why we are in business, reaffirms our values and guides what we do. This type of listening is at the heart of every Social Business.

We have entered a new era where the 'customer is king', the customer is arguably having a greater impact on successful companies than any other regulatory force. Fail to listen to your 'core' customers at your peril.

We will be discussing what it really means to listen in early 2013.

As always your comments are much appreciated.

Alan

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