The metrics that businesses have traditionally used to understand consumer needs only provide half the picture.
If you want to really get into the minds of your customers then you need a new model that accounts for friction and reward
As Richard Hammond explains: Customers lie. They lie all the time and they don’t even know they’re doing it. Sometimes they might lie because you asked them a question in the wrong way. Sometimes they might lie because they don’t know how to articulate the truth. Sometimes they might lie just because they’re being asked the question in the first place.
They might tell you that price is their most important consideration. They’re probably wrong. They might say they want more choice. They really don’t. And all that customer data you’re likely scraping together from websites, apps and feedback forms? It’s lying to you to, because it only shows you half the picture.
And this is a massive problem, because we are in an era of total choice. Customers have power like never before, to buy from you, or the business across the street, or the one from across the globe. The only way to influence their choice is to understand their thinking; but how can you do that when you can’t trust what your data is showing?
The way you’re using your customer data is not giving you the full picture
We gather, slice, dice and quantify customer data from hundreds of sources; we track and poke and experiment on customers; we tailor, trim and follow and qualify.
But there is a problem. The accepted ways of interpreting this data views customer experience in isolated pockets—and it misses the big picture.
The current accepted marketing wisdom is to understand customer data by grouping customers into socio-demographic segments. But there are often more differences within segments than there are similarities.
Segmentation might give marketers the comforting illusion that they know stuff about their customers, but the reality is that customers are unpredictably different to each other. Worse, they’re different to themselves the last time they interacted with your business. Even if you do identify some common ‘truths’ about a segment, there are likely to be a significant number of real people within that segment for who those truths are irrelevant or unimportant.
There is an answer. A way to get at the truth in what your customers tell you; a way to read your data so that it reveals the real reason customers choose you, or your competition.
It’s called the Friction versus Reward metric (FvR), and it rests on the fundamental relationship between the friction a customer encounters when buying from you, and the reward they gain by doing so.
Frictions are all the things a customer has put in to complete a shopping mission with you. It’s the arse-ache involved in buying: making a shopping list, driving to the store, finding a pound coin for the trolley, searching for what you need, unloading the trolley onto the conveyer, paying, loading the car then slaving over a hot stove to make dinner.
Reward is everything the customer gets back. It’s every output from that customer mission: discovering a Chinese cookbook on offer in store just as they’re wondering what to cook, finding the particular oriental vegetable they need, enjoying the satisfied grunts of their friends as they tuck into homemade dim sum.
Reduce friction for customers at the same time as delivering big, juicy rewards, and you can influence people to choose you over your competitor. Uber, Amazon, ASOS, Warby Parker, Polycom: all businesses that opened up a marketplace by either removing huge friction barriers or by ramping up reward to new heights at the same time as lowering friction.
The power of FRi
Understanding what annoys customers can help you solve issues. Understanding what customers love about you can help you deliver more of it. But it’s only when you look at the two factors together that the real power of the Friction versus Reward metric ignites.
Knowing that Doc Martens boots give customers sore feet while they are broken in is a friction, but it is only half the picture. To get into the mind of a Doc Marten’s customer, you must also understand that breaking in a new pair of Docs is a rite of passage that earns the huge reward of membership of a tribe. Understanding friction is meaningless without understanding reward.
When you ask customers questions through the lens of friction and reward, and when you put your data through the same filter, the relationship between the two gives you a full picture of why a specific customer chooses to buy from you, or not buy from you, at any particular time.
This is where Friction/Reward Indexing, or ‘FRi’*, comes in. FRi is a system of measuring all friction inputs and all reward outputs across the complete customer engagement. It can be used day to day to fix customer pain points and it can throw up deep insight, generate pivots and innovate new approaches across an entire business.
Break free of segments, embrace need states and customer missions
Instead of shoehorning customers into imaginary segments, FRi looks at individual customer scenarios in combination with possible customer need states. You might not be able to predict how people in the same segments will behave, but you can predict how people in the same need state will—because they share emotions, moods and situations. This enables you to build a practical response to the real needs of every individual customer.
How to get started, even if you’re a start-up
The good news is using FvR to understand your customers is accessible for any business, big or small. If you’ve already doing customer research you’ve most likely got the data you need.
And if you don’t have the data yet? Simply understanding the relationship between friction and reward will pay significant dividends. Using your own instinctive knowledge of your business will start you on the road to transforming your customer experience. You will learn how to read your business in an entirely new way and that will lead you to make big and powerful changes to how you do what you do.
To get you started using the friction versus reward metric there are some free tools available at www.frictionreward.com.
Richard Hammond is CEO of Uncrowd Ltd and the author of Friction/Reward : Be Your Customer’s First Choice (Pearson Business), available on Amazon, priced £16.99 in paperback.