2021 Customer understanding will pay back better than EVER before. It will be a year of liberation. People will meet, travel, and spend again. This goes for both businesses and individuals. What 2020 banned from us we’ll take back with interest in 2021. We’ll be liberated to new norms, which are still largely unknown.
Let’s explore the unknowns
What’ll the new normal look like? An optimist’s formula looks like this: 2019 business as a baseline + all the new business found 2020 + the cost savings of 2020 = 2021 expectation. In reality, you don’t know if the customers will return to their 2019 behavior. Your 2020 new business could be a windfall that’ll disappear with the pandemic. Stop assuming and start collecting data from your customers.
What does the path to recovery like? An optimist’s forecast: large-scale vaccinations are done by June, so that’s when my business will pick up. If I can hold on for another six months, I’ll be fine. In the meanwhile, millions more will run out of savings. The new virus variants could return the lock-downs. Maybe your customers return early when they see the light at the end of the tunnel - or late after they’ve fulfilled needs in the lower levels of hierarchy. How can you know? Ask your customer.
How have my customers changed since I last served them? Not everyone is financially worse off after the pandemic. The stock market has returned another handsome profit, and people who have enjoyed steady income and lacked the opportunity to spend are sitting on a pile of cash, eager to spend. Many tech companies have had a record year. At the same time, there are 5 million fewer jobs in America, every third family has had to use savings to pay bills, and unemployment is still double the 2019 level. People have learned new ways of working and value different things in life. How will this impact your customers? Don’t rely on outdated insights; get better data!
Look at the crisis as an opportunity
in Chinese and Japanese, the word “crisis” is written with symbols for “danger” and “opportunity.” Not all, if any, of your competition will understand AND act on the need for updated customer understanding. Under normal circumstances, the incumbents benefit from the status quo and their better understanding of historical behavior. Much of that benefit just got wiped out. Suddenly, the new entrants can have a more meaningful data set to serve the customers while the customers are open to new partners, vendors, or providers.
Natural disasters are more frequent and better-studied crisis, where the past behavior can be used as a baseline. It’s been a century since the previous pandemic, and telephones and airplanes aren’t any more considered technological innovations. The 2021 Pandemic recovery is uncharted territory, and the best way to navigate those waters is understanding your customer and serving them well. The biggest failures of the pandemic won’t be the companies that run out of money now but the ones that fail to renew. It’ll take longer for the giants to fall. Similarly, the biggest success stories are being built now, in the middle of this disruption. Their true magnitude will show in the future.
How to seize the opportunity
Customer understanding is a journey, not a destination. In many ways, it’s like leadership, raising children, or brushing teeth. You get results over time, and you can’t make up for the inactivity by doing more the next month. Compared to all the previous crises, we’ve never been able to collect customer data as effectively as we can today. Secondly, digitalization makes it possible to change at a rate never seen before. This is why we say customer understanding will pay back better than EVER before.
Establish a new baseline. Don’t use the customer study from a year ago as a baseline. You know it’s not valid anymore.
Build on your baseline. Once you have found your respondents, set up the tooling, and worked through the data collection, analysis, and conclusions, the heavy lifting is done. You can run follow-up or ongoing studies with a fraction of the cost and effort.
Dig deeper. After you identify the potential ‘opportunities’ or ‘dangers’ of your crisis, you can dig deeper. Focus groups, surveys, and interviews all serve their purposes.
The job’s basically done - it only lacks execution
In 2020 we were told staying on the couch saves lives. As Ilpo described in the 2020 blog, some companies have managed an impressive digital transformation during this period. So, wake up to 2021, find out what your customers are up to, and seize the moment to make this the best year ever. The opportunity of our lifetimes is out there. 2021 will end the crisis but the heavy lifting is just about to begin.