Your customers are lying to you, and it’s putting your business at risk

Jul 16 · 4 min read
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This article was originally published April 3rd, 2018

Boswells in Oxford, UK, the second oldest family-owned department store in the world, is closing after 280 years in business. Run by the Boswell and Pearson families since 1738, the store is an institution. The closure is a cause of much sadness for locals, whose parents shopped there for homewares and bed linen while they explored the toy department with its working model railway and play-sized pioneer wagon.

The shop’s management cited ‘prevailing adverse retail conditions’ as the reason for closure. Boswells have been struggling to keep afloat for several years, and have tried various strategies to turn the tide, including opening a café in the store and launching an ecommerce website.

But those same locals sad to see the closure weren’t shopping at Boswells. They weren’t using the new café or ordering from the ecommerce site. The loss of their custom has killed the store.

So why didn’t Boswells’ tactics to attract modern shoppers work? What should Boswells have asked those lost customers to find out what would make them spend their cash with them again?

Maybe Boswells did ask customers what they thought. Perhaps they carried out customer satisfaction surveys or other retail analytics. ‘Would you buy from Boswells online?’ ‘Would you eat in a café at Boswells?’ Yes! Yes! Yes! those customers replied.

But those customers were lying. And they’re not unusual. All customers lie when we ask them questions.

Customers say they want choice, but they don’t really want choice. They say they want lower prices, but they will happily pay higher prices in certain circumstances. They say they want to buy from a website, but then never actually visit or purchase from that website. They say they’d love a café in store, but then never actually buy a coffee there.

This lying isn’t intentional, or malicious. We aren’t stupid — if we’re asked for our opinion, we’ll give a version of it that we think will help bring about a better situation for us. It’s not even selfish, it’s just sensible. Lower prices means free money, and free money is amazing. More choice means more freedom, and who wouldn’t want more freedom? A café means another place we could go for coffee. A website means that we could order a Boswells saucepan from our sofa, should we ever want to.

Only, what if we never actually want to?

80% of our customers say they want to buy from us online but 2% of them are using our website. Why?! Why, fickle retail gods?! The retailer shakes their fist at the skies.

What’s a business to do? Asking customers what they think is clearly a Good Thing. You’d be stupid not to. But act on what those customers say without fully understanding their biases and motivations and you’re risking empty cafés, dead websites, falling profits and closing-down signs.

Ask customers questions and you get answers skewed by bias and results in isolated pockets.

Boswells might have discovered that customers loved their service but did a survey also tell them what the customer had to go through to get that service? Did it tell them where that customer shopped instead next time? Did it tell them why the customer made that choice?

OK, we’re making a lot of assumptions about what Boswells did or didn’t do here, and we don’t really know, because we weren’t working with them. But what we know to be true is that whatever methods they might have used to understand what would make more people choose to shop with them, from gut feeling to full-on analytics, they weren’t seeing the full picture.

It’s a major issue with all current customer metrics. Customer Satisfaction surveys reflect only what the customer says, rarely what the customer does or even really thinks. NPS fails to show causality or predict repeat customers, CES and journey mapping can only identify customer pain points in isolation, LTV and basket analysis can’t predict preference… whatever metric you’re currently using, you’ve got a major blind spot. And blind spots are bad for business.

Uncrowd has set out to correct this failure of current customer metrics. Our approach wins because it strips out the bias, analysing instead of just asking. It’s the first ever mathematically sound descriptor of behavioural economics, explaining through maths why people make the shopping decisions they do.

It’s analytics that reflects real customer experience, in real context, removing confirmation bias from the data, identifying specific causalities and showing exactly which levers make a difference to operating profit.

We deliver this in the form of a metric that compares shopper effort with purchase gain, Friction versus Reward (FvR). We harness the power of FvR as Friction/Reward Indexing (FRi) and deliver that indexing in the form of a cloud-based modelling and innovation platform.

Thinking FvR makes it significantly easier to identify hooks to hang marketing communications on. When you know your strengths, have fixed your weaknesses and innovated where you have uncovered new opportunities, you have powerful stories to tell customers, to persuade them to shop with you.

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The FRi approach lets retailers see why customers are choosing to shop where they do, and how to influence that behaviour.

And that knowledge has the power to keep those closing-down signs away from more high street stores.

The Uncrowd

After the customer analytics herd there is the…

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