CUSTOMER SERVICE & INNOVATION; WHY LISTENING TO CUSTOMERS IS RISKY!

By William Buist

Social media has enabled companies to review and access the experience their customers are expressing in public much more easily.

Sites such as Ecademy, Twitter, Facebook and MySpace have enabled consumers to express an opinion at almost no cost and with a low barrier to entry.

Reactions to the experience they have with companies they work with can be expressed very quickly and can elicit conversations with others who either share that particular experience or have experienced a different level of service.

That transparency between consumers has created some significant opportunities and issues for companies. Whilst most companies have focused on the opportunity to engage with and listen to their customers, this article considers whether that opportunity could create some risks and stifle innovation as well.

There is an opportunity for customer service teams to use social media to become involved in the conversation with customers and really understand and deliver timely, transparent and effective responses to any concerns or complaints which they have.

That remains significantly important for existing products and services where those products and services are mature and the business strategy is dedicated on maintaining their market share or expanding it to other customers with similar needs.

Customer service teams, by engaging in conversations with customers, have an incredible opportunity to understand the impact that the product and service has on customers’ lives and experiences. That provides a wonderful opportunity to feedback into marketing and sales to help expand the product. Transparency therefore seems an alluring and highly beneficial necessity for most businesses, and many are now beginning to engage in social media in an increasing rush to provide the best service for customers as possible. Clearly that’s all good, but there are risks.

Innovation
Innovative companies change their product, they do new things, they introduce new services, and they make a stand for what they believe in. In fact, if they’re not prepared to make a stand for something new and different then they are accepting that their business model is predicated on the long-term value extraction from an established base.

Innovative companies, typically, only listen to their customers in relation to servicing existing needs but will often push through change that their existing customer base resists, indeed that may cause some existing customers to depart.

Courageous innovative companies believe in the strategy strongly enough to be prepared to stand for the future rather than relax into the past.

Why is this?

Customers don’t know a business’s strategy in detail. Apart from the difficulties of communicating the entire rationale behind the company’s strategy, it’s unlikely that customers actually care that much about what a business’s strategy is. Most customers just want to be provided with products and services that meet their immediate needs.

Since customers don’t know the detail behind the strategy then it’s unlikely that they can provide detailed informed feedback in relation to how that strategy should be implemented. In fact, they won’t.

So businesses look at innovation and change internally. They’ll research and seek an understanding from the market in general, and will engage with their customers in order to understand the impact of change and inform the decisions that need to be taken, but innovative companies will make changes that their customers do not want and do not support, time and time again.

An Example: Microsoft
Microsoft has an enormous challenge. It has a suite of highly effective and well-used programs developed over many years which, in their time, were innovative, different, enabled a paradigm shift in working to take place, and have created a pseudo-duopoly with the other major player in the PC market; Apple.

Whilst these companies are often cited by their differences in approach, one similarity is the longevity of some of the products that they sell because of the installed customer base and the need to maintain support for them.

Microsoft Word is probably the most used word processing package on the planet but fundamentally isn’t different, in the latest release, from releases perhaps 10 or 12 years ago, sure there are more features and smarter ways to do graphics and presentation, and more installed fonts and styles and templates, but underneath it all backwards compatibility with previous documents and previous versions remains one of the paramount considerations that Microsoft must take into account when delivering a new product.

That overhead means creating enormous tranches of code simply to cope with maintaining compatibility with older versions. Why? Because customers hate change.

They’ll buy the upgrade if they know they have no learning curve, and actually what that means is they’ll take a new product and use it just like an old one but over time maybe absorb one or two new features that make it worth the investment in the new software.

Two or three years later in order to again monetize the customer base, Microsoft will release a new version which is to all intents and purposes the old version with a new name, all the code to do backwards compatibility and some additional features.
It’s not innovation; it’s barely evolution.

In many ways, Apple has run with the same problem and also maintains significant length of service for similar functions in similar programs.

Conclusion
We’re not saying that innovative companies should ignore their customers, and we’re not saying that they should not engage in social media to take more notice of their customers. Customer service is important, but innovation is important too and successful companies will manage to use social media to research opportunities in their market.

They do this to understand what new needs have been identified by their potential customers and how they can meet them whilst also engaging in a mature way with their existing customer base to provide support and service that they need for their existing products and services.

Innovative companies will however be prepared to make a stand to introduce new products, new services, and new ways of delivery and at times will be prepared to move the business in a way that will alienate some parts of their constituency of existing customers.

When innovative companies do that it’s not because they don’t listen, it’s because they do. But for those people in those constituencies that feel that their views are no longer being acted upon there will be a temptation to view the business as insensitive or uncaring. That’s change at work.

So, as customers, (and we are each that for many, many businesses), when we feel that our views have been ignored and that the business has moved away from where we feel comfortable, as a customer, with consuming its products and services then maybe they’re innovating, maybe they’re moving to a new place in line with their strategy. So we have a choice, as customers, to see what that new future brings or to change our suppliers and return to a service or product that continues to meet our needs in a way that we feel comfortable and happy with. We might get left behind if we choose comfort over discomfort, familiarity over novelty, old ways over new.

Social media gives us the opportunity to voice our opinion on that almost immediately, and it’ll often gather a group of like-minded individuals who feel the same way. The danger with listening to a small group who feel the same way is that an effect known as ‘group think’ can become predominant in our thinking and lead us to believe that we have the support of many on our side. Perhaps we do – that’s innovation and change doing its work.

So, listen to customers, of course, take into account their thoughts and their feelings. Understand and listen to how they react to propositions of change, but if you are seeking to be an innovative, leading edge business, then have the courage to take a stand too and be prepared to be accused of not listening to your customers when in fact you know you’re listening to them harder than ever.

About the Author: William Buist is Managing Director of Abelard Management Services, which specializes in building trust in teams and communities within its SME and Corporate client base.

You can hear interviews with William Buist on PASSION for the PLANET radio and on demand on this site; just type “william buist” into the search box.