So Much Data, So Little Understanding

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It has become one of the most oft-used business cliches: Data is the new natural resource.

And, to a large extent, it’s true. The digital era’s data explosion has given businesses an historic opportunity to extract all kinds of insights about how to serve customers better. The thinking goes that the data may not always be correct, but it’s better than guesswork and opinion.

Yet, as organizations guzzle all this data about click and conversion rates, search logs, and gobs of other requests or preferences codified through apps, websites, or customer service interactions, many don’t realize they’re making a challenging situation worse.

How so? As the world shifts to primarily digital experiences, companies are already tasked with trying to understand customers they rarely see or talk to. But allowing big data to overtake more traditional and personal methods of understanding only increases the distance.

This is how we end up with organizations claiming they’re “customer-centric.” Still, according to a 2021surveyby Harris Poll and data platform provider Redpoint Global, 55 percent of consumers feel unseen by brands they interact with, and 48 percent feel undervalued. Ouch.

Companies have no choice but to figure out the best ways to better understand customers so they can anticipate and support their needs and deliver exceptional experiences. That’s just market reality.

Consumer expectations, you see, have never been higher. As a result, the digital marketplace is bursting with businesses, many of which offer nearly identical products. With so many choices, people can take their money elsewhere with a mouse click or smartphone tap.

Additionally, consumers today tend to compare experiences within the same category and across all of the products, services, and brands they encounter. For example, when consumers purchase clothing online, they may compare the experience with the one they have booked a restaurant reservation via an app. They’re different beasts, but the consumer doesn’t care: They expect the same quality.

The key differentiator and loyalty driver in the digital economy has become the customer experience. Do they feel understood and, on a personal level, valued? Can they set up a new account smoothly? Is the app easy, helpful, and enjoyable?

Research shows that customers consistently flock to companies that offer them delightful experiences and remain loyal to those companies once a connection is made—sometimes, even if another company offers similar products at a lower cost or delivers them faster. The business that has the best experience and creates an authentic connection usually wins.

Keeping up with these unprecedented customer demands is overwhelming and expensive, and that’s why so many organizations have chosen to tap into their huge stockpiles of carefully collected customer data.

Doing this feels efficient, and many business leaders have been conditioned to believe that numbers are all they need to make sound business decisions. So, company after company has spent significant dollars to create heavy data collection and analysis machinery, and then they merely trust the numbers.

Analytics sheds light on observable customer activity, such as what a customer is doing with a product or experience, which can help identify patterns and areas to address. But they don’t enable nuanced, emotional understanding of what it’s like to be the customer. Seeing customers as data points rather than human beings means companies can only make educated guesses about what’s in customers’ heads… and may guess wrong.

In the B2B world, CRM systems are commonly used to answer the question, “What am I doing with my customer?” Most businesses can’t function without these tools for managing customer information and relationships. The pitfall is that these systems offer information about customers exclusively from the company’s perspective.

They don’t gather information from users, so everything is viewed through the company lens, which is self-serving and the antithesis of customer centricity.

And what about those surveys consumers are constantly asked to fill out? These can provide insights into how a customer feels about their experience. Still, surveys can be problematic for a few reasons, such as survey fatigue that limits returns, generalized responses lacking the kind of subtle feedback that can be revelatory, and even the possibility of bots infiltrating online surveys.

The missing perspective in these techniques: what it’s actually like to be in the customer’s shoes. None of them drill down enough or offer a broad enough perspective to give a business a deep, genuine understanding of what enchants and secures loyalty from real, live people.

Companies need to pair data with authentic, personal customer perspectives to assemble a complete picture of multidimensional, decidedly human customers.

That requires building customer experience narratives that include observing and sometimes conversing with customers, listening to what they are saying and how they are saying it (sentiment, pace, intonation), noting facial expression and body language, and any other human signals that illustrate delight, frustration, and motivation.

In a digital era when consumers have seemingly infinite choices and hold extraordinary power, a company’s ability to see the humans for whom they’re creating experiences is what sets them apart from competitors.

Without that, businesses risk building products no one wants, making uninformed decisions about current offerings, and becoming increasingly detached from the people they serve.

To be clear, data alone will not help foster unforgettable customer experiences. Data may help give the big picture—generally in the form of trends and patterns—but customer narrative input adds color and context and gives a human perspective that is merely relying on numbers can’t.

Featured Image Credit: Photo by Ryutaro Tsukata; Pexels; Thank you!