Why companies must prioritize customer preference around product and technology engagement

PowerPoint decks can make any technology look enticing. Finely tuned random forest models are so predictive in a Jupyter Notebook. The most beautiful user interfaces crisply projected on a 65’’ LED monitor look so elegant. A newly minted API works so seamlessly when you make calls in Postman.

But, all this sexy technology is just smoke and mirrors if you haven’t figured out your customer yet. You must intimately know your customer before you buy/build/acquire any of this technology for your organization.

You are not like your customer. You may think you are. But you’re not. In fact, they probably don’t look anything like you. Once you know your consumer, then you can operationalize.

While Arity provides enterprise solutions, we seldom prioritize what “the business” wants. In fact, we’ve banned the term, “the business”. Given we were born from an insurance company, this is quite the contrarian approach. As Sun Tzu said:

“It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”

So, what do we prioritize? And why? We prioritize customers and their ability to engage with products and technology. We research, study, watch, observe, inquire, interview, interrogate. We’ve turned it into a science; The science of systematic activity to acquire knowledge that describes and predicts customer behavior. A “customerologist’, if you will. We’ve gone so far as to hire economists and behavioral scientists to help us understand the macro trends of human behavior and their impact on the world. The customer precedes any automation, process, change, organizational enhancement or structural improvement you make as an enterprise.

We seek a deep and intimate understanding of our customers.These “aha” moments come in the form of discovering unexpected trends in customer behavior.

Unlike Tzu’s dialogue, our approach is:

“It is said that if you know your customer and know yourself, you will be successful” –Arity

Let’s look at a couple of examples of industry leaders identifying interesting and unexpected customer behaviors and rationalizations.

Case Study One – Amazon Prime:

A recent article by an early Amazon product manager outlines how the company identified early asymptotes in their business. For each purchase a consumer made on Amazon, Amazon asked the user why they didn’t purchase more. Amazon also surveyed people who didn’t shop at Amazon to understand why. The results of both showed that people hate shipping. So, Amazon attempted to address the problem by showing, in the shopping cart, how much customers were saving by not driving to the store.

However, they learned that people don’t adhere to logic. Despite Amazon displaying how much money consumers were saving over time spent driving to the store, paying tax and incurring depreciation on their cars, people still preferred traditional shopping due to shipping costs, even though it wasn’t rational.

The result? The birth of Amazon Prime. The team discovered a single, nominal pre-payment solved the problem of perceived added costs in the form of recurring shipping fees.

Case Study Two – Insurance Company X:

A few years ago, a high-ranking executive at Insurance Company X was deploying a telematics program. So he asked his 18-year old son to install a hardware device in his car. His son quickly and emphatically responded, “No!”

Two months passed. The executive returned to his son and rephrased his question, “If you install this device into your car, I’ll give you a $10 Starbucks gift card.” Immediately his son installed the device in his car. No questions asked.

The conclusion; the cost of collecting data is two lattes.

(I’ll be here all week folks….)

Conclusion:

Knowing your customer is essential, and the things you find out about your customer might not be intuitive. Your customer’s behaviors might be completely irrational and non-linear. And that’s OK!

While you may want to lean on experience and intuition, your customer most likely doesn’t look anything like you! So, stop thinking you are a representation of the people you’re building products for, and start building the technology necessary to understand and empathize with the people you are building products for. Know them. Study them. Obsess over them. Then, operationalize and revolutionize your business.