Have you, as a customer, ever had it patiently explained to you by a sales or service person that “it doesn?t work like that”? Don’t you just hate that! To paraphrase Steve Jobs, it’s not the customer’s job to know how it works. On the contrary, it’s the marketer’s job to know how the customer thinks and acts and wants it to be. All the same, it is possible to create customer behaviour that is efficient and smart for your business. The common mistake is that people start by trying to persuade customers to do what the business wants, rather than daring to let go of that and explore what customers want. If you can let go of your own agenda and really go with the customer, eventually you’ll hear how your interests and theirs can be aligned.

I had this experience some years ago working as a consultant to a UK health insurer which had a huge problem with rejected claims. Back then, having private health insurance meant you could see any medical practitioner you wanted without waiting; pay for it; and then send your insurer the bill to be reimbursed. At this point, lots of people would find their policy did not cover them, resulting in a huge backlog of disputed claims, unhappy customers and in some cases disgruntled medics facing late or no payment. Insurers in the USA used a system called pre-authorisation to avoid this: you had to call up and get an approval code before seeing the doctor. Our clients in the UK health insurance business believed that the freedom to choose and obtain treatment was a key product benefit, so they were very fearful of doing anything to curb this freedom. They weren’t making this up. They had, tentatively, sounded a few people out on whether they’d accept this need to seek permission in advance, and got a firm no. So we did some consumer research exploring the process of seeking treatment, from the customer’s point of view. We discovered that, along with the anxiety of the medical condition, it was troubling to have some uncertainty about quite what would be covered until after the event. But in the current model there was no way to find out until submitting your claim. So we were able to position pre-authorisation as a customer benefit – a simple phone call so you know exactly what you’re covered for before you incur any cost. Everybody wins. In due course, it became the norm, and it made possible the move to direct settlement of medical bills by the health insurer, taking the customer out of the financial transaction completely – another win all round.

The essential step was the client’s willingness to stop, for a moment, trying to solve their problem – the hassle and cost of disputed claims – and instead to go with a much more open exploration of the whole process, end to end, with customers. Market research, and especially qualitative research (as in the infamous “focus group approach to policy making” attributed to New Labour), gets a bad rap these days, but this shows how it can work really well: not to ask customers what they’re thinking and feeling (they’ll try to tell you but it’s unreliable testimony), but as one important input to understand and unravel a situation. Most people know not to take all market research literally. Sometimes very specific questions are being asked, with unequivocal answers that should not be ducked, but just as often, and particularly in qualitative research, it is best seen as an exploration not a prescription. Terry Leahy writes extensively about this in his recent book, Management in Ten Words. When you use market research to listen to customers with a genuine curiosity and willingness to hear what they want to tell you – whether it addresses your immediate issues or not – good things follow. This is true both for specific problem-solving, as in the health insurance case above, and when seeking to develop new products or services, or looking for opportunities to innovate more generally.

It’s often been noted how framing a good question gives a rapid start to any problem-solving or innovation process. (I treat problem-solving and innovation as essentially the same activity, because an innovation that doesn’t address some sort of market need, however modest or unarticulated, is unlikely to succeed.) As Picasso reportedly said of computers, “But they are useless. They can only give you answers.” Market research used well gives us the questions that we should tackle in our businesses, on behalf of customers. It’s not always fresh and inspiring – how to lower prices is a hardy perennial, though no less real a challenge for that. If you can listen generously, openly and not defensively, people in research give valuable clues about where best to focus your problem-solving and creative energies to build competitive advantage. Shape your processes to match their natural preferences and expectations, and they’ll happily do it your way.

Thought leadership | June 2013