Data Alone Won't Help You Understand Customer Relationships

Available data, such as is captured through retail loyalty programs, will not deliver the insight needed to guide relationship development. Such data is, by definition, transactional and behavioral—not even close to the complexity that relationships imply. Such data tells us nothing about the health of customer relationships; it tells us little of the "why" that lies behind the behavior.

For example, the data from a supermarket's loyalty program will reveal shopping patterns; timing and frequency of visits; items bought; and total spend. But, it will not tell us whether such behavior is driven by convenience or price factors, or by a genuine affinity for the store. Frequency of buying has often been mistaken for customer loyalty—it's not! Many people are "loyal" to a supermarket only because it is close to where they live.

Customer analytics can pinpoint purchase patterns and guide targeted advertising and promotions. It's all about a more efficient marketing effort that increases the likelihood that an offer will reach a receptive customer. But such analytics really don't get at the heart of a relationship.

To really understand customer relationships, executives must accept that relationships are complex, emotional things. Therefore, we need a set of measures that will explore the emotional underpinnings that may be driving the behavior. I am not talking about customer satisfaction research that typically addresses predictable, behavioral issues, such as how satisfied customers are with the things they expect us to do, for example, delivering on time and answering the phone quickly. Customer relationships are much more complex. Doing predictable things well will not necessarily lead to solid customer relationships.

To understand what drives customer retention and relationships, I'd want to know more about customer feelings, how often we create certain positive and negative emotions, whether they shop here with their friends, whether they feel particularly close to the employees, whether they are proud (yes, proud!) to be customers, and whether they consider us "their supermarket."

Conventional marketing research is often flawed in that it asks customers what we can do to improve. The answer usually is that we should do what we already do, but do it faster, more accurately or more often. It doesn't give us the insight that we need to impress a customer or to establish an emotional connection.

Going beyond the expected
But even unconventional, emotion-focused measures of the health of customer relationships still are not sufficient to allow for a full understanding of what drives those relationships. Depth interviews and other qualitative techniques will get at what customers like to encounter, how they like to be treated and what would favorably impress them. We need to know how we can contribute to their lives and their success, beyond what is generally expected of us.

To build more solid customer relationships, we need to impress customers by doing things that they do not expect; we have to behave outside the box. To get there, we need to know how to create extraordinary value for customers.

I have met many companies that barcode, scan and time everything. They pay employee bonuses when they exceed certain performance goals. But they do it all without ever talking with customers. They assume that the data they are collecting reflects what customers want! I have proven time and again that it doesn't.

You should continue to collect and analyze the data, but don't think that by doing so you are getting closer to understanding retention and relationships. All you are doing is getting a clearer picture of behavior, which is not a bad thing. To understand how you are doing in creating real relationships with customers, you have to use measures that are appropriate to relationships. This means moving beyond conventional market research.

If you really want to understand customers, you have to talk and listen to them, not in 10- minute telephone surveys but in two-hour-long conversations, during which you will understand just how complex shopping and buying is for many people and what draws some back to the same stores week after week, year after year, even though competitors are more conveniently located and have lower prices.