Sensing: Creating a Deeper Relationship With Your Customer
Digital technology is enabling a shift in market research: a move from “what they buy” to “what they do.”
I live and work in NYC, where I recently had occasion to take a cab from a lunch meeting downtown to my office in the Flatiron district. The cabby was just awful, emphatically stabbing the gas then the brake, snapping my head back and forth, roiling the ramen in my belly. I felt a small measure of comfort knowing that I would give him a bad rating on Lyft when the ride was done—until I realized that I had hailed the cab the old fashioned way—by waving my hand in the air. (Um… digits, but not digital?)
In that moment, I was struck by the tremendous change that digitally-enabled services deliver. When my lurching cabby and I parted ways a few minutes later, we would be done with each other—hopefully forever. But how could I be sure of that? How could I remember that this guy was the gas-stabber? How could I warn others?
Had I used Lyft or Uber or some similar service, both the driver and I would have identified ourselves to the system, and the record of our transaction would have been created in the system. There would have been sales data of course: a record of what I purchased, the time, and cost. But a normal taxi meter records this. The digital hailing mechanism used by Lyft and others means that there is a new layer of data: behavior data: the route the driver took, the speed he drove, the way I payed for the ride. And finally there would have been our micro-reviews of each other: (“He was a brake-stabber,” and “Passenger had the ramen sweats.”)
This ability to move beyond what they buy data to collecting what they do data is transformational. When you have the ability to do this, you have the ability to Sense what’s going on in the market, an ability you need if you are going to respond effectively. And the more you know, and the faster you know it, the greater the precision speed with which you can respond.
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What they do data is not inherently good, of course. As recent stories about Uber have demonstrated, this data can be put to both bad use and good uses. But there’s no denying that what they do data is here to stay, and that both businesses and customers can benefit from it.
Here’s an example of how the exchange of what they do data can help both sides: we are currently working with a client who makes a machine used in the home and in small businesses. (Let’s call them Acme Corp, since I can’t tell you their real name.) The machine uses supplies made by the company, and they make good money from the sale of these supplies. Customers can buy supplies directly from Acme, or they can order them from Amazon, or they can buy “unofficial” 3rd-party supplies. Let’s say for this conversation that the supplies are essentially identical.
It’s obvious that why Acme would want to customer to buy directly from them (higher margins, better sell-through data), but how do they encourage that? They could compete, but that’s hard to do without alienating channel partners. They could compete on quality, which is difficult to claim in this case. So what can they offer? Why would a customer buy from one outlet or another?
One answer might be service. And here’s where what they do data becomes so compelling. If Acme can succeed in transforming their product from a stand-alone machine to one that is connected to the internet, the machine can monitor the use of supplies, alert Acme when the customer’s inventory levels are low, and automatically trigger a re-order. And the customers are VERY interested in this service.
And it’s not just consumer companies that are playing this Sensing game. Take a look at how GE is selling jet engines and gas turbines these days.
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When someone buys your product or service, are you creating a digital relationship with that customer? I’m not talking about chatting over Twitter and Facebook. I’m talking about really understanding the what they do data. Do you use this data to understand your customer’s needs and provide better service? If you’re doing this, I’d love to hear from you. Reach out and tell me your story.
