B2B Customers Are Not Logos
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-Vice President of Marketing, Enterprise Content Management System Provider
B2B Customers Are Not Logos
People don’t want to be a number. B2B customers don’t want to be a logo.
An increasing number of companies refer to existing and potential customers as logos, e.g. Our goal is to add 20 more logos this year. It’s gone so far that a search on LinkedIn will produce individuals with titles like VP of New Logo Acquisition. We think referring to customers this way is a mistake. Beyond being jargon, it sends the wrong message to employees. Customers and prospects are better terms. A customer is a person or organization your company has a relationship with. A logo is a stamp.
This may seem like an exercise in semantics. But Language matters. How you describe customers and prospects in internal documents and conversations sends a message to employees. It subtly turns customers into a score, rather than a relationship.
Many organizations are sensitive to this issue when referring to employees. Employees are partners, associates, leaders, representatives, etc. These labels elevate the relationship the employee has with the organization. Even firms that don’t use aspirational terms for employees don’t call them cogs, underlings or wage-workers.
The use of the term “logos” to refer to customers appears to have originated in the financial services sector where banks and private equity firms display the companies the invest in using PowerPoint presentations. In this situation a logo represents an abstract connection. An investment.
But customers don’t want to be logos. They are organizations full of people with goals and challenges. Customers want to believe that their vendors have their best interests in mind and want to help them succeed. Your employees will be more motivated to help a customer or a person that your organization views as a relationship, then they will to help a logo that is keeping score in a PowerPoint deck. At least we think so.
Design Thinking in Research
Although it’s been around for decades, Design Thinking is enjoying a burst of heightened awareness as recent articles and books advocate the approach for everything from reaching corporate objectives, to developing advertising and value propositions, to achieving your personal New Year’s resolutions.
As a research firm we applaud this reawakening of the value of design thinking – its principles have always been a central part of thoughtful primary research designs.
Design thinking traces its origins back to the late sixties and early seventies, when scientists and engineers began talking about solution thinking. Commercial market research as we know it today developed around that same time. Whether the two disciplines influenced each other or are an example of convergent evolution, the results are the same – both design thinking and formal market research share a philosophical approach to understanding customers and markets.
The five broad step in design thinking are:
- Empathize: Gain an understanding of the user, their world and their needs
- Define: Define the real, underlying problem(s), not necessarily the one on the surface
- Ideate: Generate a number of different solutions that could address the problem
- Prototype: Create a prototype(s) of the solution(s) that you feel best addresses the problem
- Test: Get reactions to the prototype(s).
Well designed research follows similar principles. The catch phrases and analogies used in market research text books, manuals, presentations, etc. echo design thinking.
- The problem the client comes to you with is not the problem
- The customer doesn’t want a drill; they want a hole
- Move from a product/engineering orientation to a market orientation
- Taking the outside view
- Provide the voice of the customer
Analogs of the broad components of design thinking are built into large multiphase studies, dynamic Agile research engagements, and are even present in standalone studies.
- Multiphase research: These studies typically start with exploratory qualitative research to understand the customer’s day-to-day processes, needs, wants and challenges. The development team takes what they learn and develops/refines the solution for the market’s problems. The solution is then evaluated with more qualitative research or a quantitative survey. Further research is conducted as needed.
- Agile research: Agile research is a phased approach that breaks the design into multiple, smaller research components within a compressed schedule.
- Standalone study: In a single study, discussion guides and surveys include an exploration of how the customers do things today and the challenges they face before testing reactions to a solution, ad, etc.
Although design thinking principles appear obvious and easy to follow, it can be hard to do so in the real world when an internal team has developed a potential solution it feels strongly about. The development process and accompanying research can end up focused on the solution rather than the customer. They compare solution features and focus questions on what the customer thinks of the product. This can result in a false positive: In a side-by-side comparison the solution looks superior to competitors, and customers at the trade show seemed excited about it, but once introduced sales fall short of expectations.
Steve Jobs and Apple provide one of the best-known examples of design thinking – and research. It is a commonly believed myth that Apple never does any research. It does, it just focuses research on customer needs rather than their reactions to product ideas. Jobs believed successful products require a deep understanding the customer’s world. We agree, and bringing this “outside in” perspective is the value research provides. Some of our clients are very internally focused or have a strong engineering background. At the beginning of the study they question if we have the technical background to fully understand their products. We tell them: We don’t have to; we’re there to help them understand their customers.
Regardless of the challenge—developing a new advertising campaign or improving your retirement planning—the principles used in research and design thinking can help you come to a solution that addresses root causes and drivers rather than surface appearances.
Did you know that the Total Revenue Generated by Arcades correlates with the Number of Computer Science Doctorates awarded in the United States? Makes sense, right?
Hold on before you start using this fact to impress people at cocktail parties. It comes from Tyler Virgen’s website Spurious Correlations (which is also available as a book on Amazon). Virgen’s mines data and plays with the X and Y axes to create ridiculous but fun correlations such as the link between margarine consumption and divorce rates in Maine and the link between drownings in pools and movies starring Nicholas Cage.
As silly as these correlations are, they illustrate how our minds automatically look for relationships between events and create explanations for them. It’s easy to ignore the base rate and craft a plausible story that people who like video games like computers or that the use of margarine in the 1960’s was tied to the weakening of traditional family values. This tendency is built into our genes and has helped our species survive for millennia – it’s better to see and overreact to false positives than miss a real threat. Unfortunately, in modern times it leads us to things such as confirmation bias which makes us to see trends in the data that support the story we want to tell.
As marketers and strategists we must be vigilant to ensure we see the data for what it is, and not what we want it to be. We also need to think about how others will interpret the data we present in charts and reports when we aren’t there to explain them. Charts that exaggerate differences for the point of discussion can easily be misconstrued the further they are distributed across the organization.
So be careful with your data, you don’t want to be the one in your organization that identifies the correlation between shark attacks and sales at all-you-can-eat buffets.
Making an effort to imagine yourself in your customers’ shoes may give you a false sense that you understand what your customers want. This counterintuitive statement stems from research conducted by Johannes Hattula of London’s Imperial College and his colleagues. Fortunately there are steps you can take to ensure you are not projecting your opinions onto your customers.
Dr. Hattula’s research indicates that the more empathetic you are (or try to be) the more likely you are to assume your customer preferences would be similar to your own. Put another way, when you try to put yourself in your customers’ shoes you actually think What would I do or want in this situation, rather than What might someone else want. This is engrained into our culture: The Golden Rule says Do unto others as you would have them do unto you. Unfortunately from a psychological standpoint the more empathetic a person is the more likely they are to use their personal feelings to predict what someone else would want. The research indicates that the effect doesn’t change with age or experience.
You can see this effect in your home life. Have you ever wanted to do something nice for someone who was having a bad day but found that the person didn’t appreciate your efforts or worse was annoyed by them? While they probably appreciate the effort, perhaps it backfired because you did what you would want in their situation, which isn’t necessarily what they would want.
These same dynamics can play out in the business world. Product managers with higher levels of empathy believe they understand the market thoroughly and are more likely to ignore research and data that conflicts with their views than less empathic managers. Sometimes they are right – but the Steve Jobs of the world only come around so often. As researchers we see this effect when conducting focus groups: Clients observing the groups fixate on an individual who most closely resembles their own views.
This tendency isn’t all bad. In fact, it is the core of many successful businesses whose customers seek out vendors that match their attitudes and philosophy: A conservative investor may seek out a conservative bank or a bleeding edge tech start-up may seek out the advertising agency that pushes the limit. This works well for existing products and relationships. However, when a vendor introduces new products or enters new markets, mistaking your perceptions for those of your customers can create problems. It can be seen in the number of product introductions that fail despite the product team honestly believing they are creating what the customer wants – their intention is good, but the execution misses the mark.
Fortunately there are easy steps you can take to ensure the level of empathy you have for your customers doesn’t backfire.
- One of the easiest is to remind yourself of your biases. In Dr. Hattula’s research, simply reminding people that their own biases exist reduced much of the egocentric effect. It makes you step back and think rationally about what is important to you and how it may be different than what others want.
- Group decision-making counters the effect. Since individuals have different opinions, the discussion helps people recognize their own biases and perceptions.
- Soliciting outside opinions or using market research can provide a less biased view of the market’s wants and needs.
Regardless of what you do to counter the effect it is useful to remember that as people we have an innate tendency to assume other people want the same things we do. Perhaps the new Golden Rule for marketers should be Do unto customers as they want to be done unto – leave your wants out of it.