You're Listening to Your Customers, But Are You Hearing Them?

By Dan Neely

Every retailer would love to know exactly what's on their customers' minds. Most retailers have adopted technologies on their sites that engage customers with their products and their brands, including customer forums, product reviews and ratings. These features have done a great job of making retail sites more interactive and forming relationships between your business and customers. In addition, companies can access the information customers submit to gain insight into their opinions and thoughts. While these current forms of customer interactivity are well intended and do provide value to retailers, there is tremendous opportunity to gain rich, informative insights from customer interactions. In this capacity, they fall short. Forums, reviews and ratings fail to deliver information indicative of an entire customer base, make it time-consuming and difficult to analyze the wealth of information. They don't deliver information to the retailer in real time--a key requirement for any retailer looking to stay competitive and keep customers happy.

THE LOUDEST PERSON IN THE ROOM
Forums and product reviews are designed to help customers make purchase decisions, and to potentially encourage sales of popular products. These mediums allow a customer to take the floor and endorse or criticize a product, generally only highlighting the voice of the "loudest person in the room." This is the person who has free time, strong opinions and the confidence to post in front of large groups of people. For the most part, while this person can provide valuable insights, he or she is not necessarily indicative of the rest of a retailer's customer base. A company that draws information about its customers from current mediums is playing a guessing game when it comes to deciding whether to take action on the customer feedback. There is no way to know whether sentiments are felt customer-wide.

Current customer interaction mediums are very successful at encouraging customers to talk, but do not provide a way for the retailer to analyze what customers are saying. If a huge portion of a retailer's customers participate in forums and post thousands and thousands of comments and sentiments around that brand and its products, the process of gaining valuable and actionable information from this vast amount of data is nearly impossible and often can be inaccurate. It's generally a manual and time-consuming process that fails to identify and accurately weigh the influence and importance of a customer's content and the valuable social information about their interactions.

For most retailers, responsiveness to customers is key to customer loyalty, maximizing sales and staying competitive. Whether you're competing with huge online retailers or trying to maximize sales during a busy time of year, being able to accurately identify customer sentiments and take quick action is a necessity. Receiving this information in real time is essential to making this happen, and current forms of customer interaction do not allow for this. Knowing in real time that a product's price is too high, or that customers don't like the new design of a product, can give retailers the information they need to right their ship quickly and deliver what customers want, fast.

THE LIGHT AT THE END OF THE TUNNEL
There are three main problems with the form of customer participation and interaction that most retailers use today: customers are not necessarily representative of the customer base as a whole, sifting through data is inefficient and inaccurate, and the information is not delivered in real time. So, what's a retailer to do?

The simple answer is to first get your customers talking to each other (or locate a place where they are already talking), then tap into those conversations and draw valuable insights in real time. How? Social networks and customer communities provide a way for consumers to develop relationships with each other and maintain communication around your brand and industry on a personal basis. It's no longer about posting something in a huge forum of unknown people. It's about customers cultivating relationships with like-minded people, and talking about what's important to them. This kind of communication is far more honest, and empowers the people who would not normally participate in a mass audience medium, like forums.

The second step is tapping those conversations so that the most important and relevant information is delivered to you in real time. This information can be based on the content from customer interactions, but just as importantly, is from the social aspects of those interactions. This includes, with whom customers interact, how they interact, what types of content they interact with, and a host of other key social information. Most businesses do not have the time or resources to dig through masses of data to find what's important. Several technologies available today offer companies a low cost way of listening to their customers and gathering that data intelligently so that retailers have clear insights to work with. What's most important is eliminating the guesswork around what's valuable to your business, and making sure you are working with vital, accurate and actionable insights.

As we hear time and time again, it's all about the customer. Stepping into their world and being able to listen to their wants, needs and sentiments delivers highly valuable information to a retailer with any size market research budget. The technology around this process has now made it affordable and simple to get access to customer information that has previously only been available to the largest of retailers. Enabling customer communication and gathering insights from it not only empowers your customers, but also informs all aspects of your business to help you better serve them.

Dan Neely is founder and CEO of Networked Insights in Madison, Wis. He can be reached at daniel.neely@networkedinsights.com.