Good talkers, bad listeners: why brands need to get better at lending their ears

  • Decoder
  • October 28, 2014
  • Andrew Lewis
Good talkers, bad listeners: why brands need to get better at lending their ears

The acceleration of technological change and omnipotence of social media is fuelling a feeling that businesses need to get the customer more effectively to the heart of business practices if they are going to prosper. Indeed, in IBM’s 2013 global study of over 3,000 c-suite executives, chief executives placed the customer second only to the C-suite in terms of the strategic influence they wield. And looking forward three to five years, the number planning to collaborate more extensively with customers is set to double.

And rightfully so. The same C-suite study also shows the results for businesses that have already made the change to greater customer centricity. Current ‘outperforming’ businesses, in terms of profit and revenue growth, are 50 percent more likely to be collaborating with customers than their ‘underperforming’ peers.

So everybody wants to be more customer centric. Globally, and particularly in the US, this push for customer centricity is driving a recognition that research and analytics will be critical to achieving greater customer integration, and increased investment in this space is visible year on year. But not in New Zealand. Here, according to the global ESOMAR industry report, we are spending less in this space than we have in previous years. In New Zealand, we have one of the lowest OECD spends per capita on understanding what consumers want, at US$20. That’s half what the US invests and a quarter of what’s committed in the UK. Indeed, our entire annual spend on research and analytics sits at about $117 million per annum. That’s about the turnover of two provincial New World stores.

This lack of investment becomes even more interesting when we compare it to investment in advertising. In New Zealand, we have one of the highest per capita expenditures in the world, committing roughly US$395 for every person. Put this ad spend against that for research and analytics, and you get a situation where we spend only 5c understanding someone for every $1 we spend trying to convince them to buy something. 

The message this creates is clear: we’re great at talking, but not very good at listening. And it’s difficult to understand how this sort of imbalance will help business start to live some of its good intentions around customer centricity.

A big part of this lack of commitment to listening to customers comes back to some pretty ingrained cultural ideas around how well we feel we already know each other. There is a firm belief that we understand what it means to be Kiwi, based largely on our own experiences and the echo chamber of New-Zealand-themed advertising. That, as a small nation, we must be fairly similar. But the numbers tell us that this is simply not true. A quarter of the entire population, and 39 percent of all Aucklanders, were born overseas; 200 ethnic groups live in Auckland, making the city more diverse than Sydney or London; and the number of Hindi speakers in the country has tripled since 2001, making it our fourth most-spoken language.

Indeed, based on the rate of population change and the imbalance between advertising and research spend, there is a good chance we are becoming less customer-centric as a business community, rather than more. As our broad brush-stroke ideas of what it means to be Kiwi, and what we believe this means for service and product delivery, become less relevant, where does that leave us? It feels like, collectively, we are veering towards what IBM would call the ‘underperforming’ business space.

The other day, I was speaking with an ex-country head for Boston Consulting Group, and he noted that while we like to think of ourselves as an innovative nation, the truth is we are an inventive nation. And there’s a big difference. We are good at making do and coming up with good solutions to problems. But we invent for ourselves, not for others. True innovation is about developing a great idea, finding out what others want, iterating against this and commercialising solutions. This  speaks to the same broad problem we see in how we approach the overall idea of customer centricity. We think we already know what an incredibly diverse population wants, based on some pretty singular ideas. And that holds us back from fully realising our potential.

Customer centricity is about throwing off the ideas of single-fit products and services, and getting down to delivering what individuals want. And the only way we can do that is to step outside ourselves and get closer to the diverse reality of the human experience.

We need to start listening.

  • Andrew Lewis is managing director of The Research Agency.        
  • This story originally appeared in the November/December edition of NZ Marketing.

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