Data isn't enough: Why it’s so important for companies to speak to real customers

Olivia Sanchez

The digital landscape is a battlefield. Often established corporations, despite boasting vast resources, can struggle to adapt to the ever-evolving terrain. New technologies emerge at pace, user expectations constantly shift, and the need to innovate feels more crucial than ever. However, the pressure to keep up often drives businesses to rush the launch of products and services without really thinking them through, and without truly understanding their value to customers.

But churning out products without a deep understanding of real users can lead to costly mistakes. According to Harvard Business School professor Clayton Christensen, of the over 30,000 new products introduced each year, a staggering 95% fail. Often, the culprit is a fundamental disconnect between the product and the needs of the target audience.

The key to success lies in truly understanding users, and building products, services, experiences that they actually want.

So where do big corporations go wrong? And how can they get it right? This article explores why data alone is insufficient and how companies can bridge the gap between data and real customer understanding to create real value for customers and the business.

The limitations of data

Data is a powerful tool, but it can be a double-edged sword for big companies. While they have the resources to collect vast amounts of user data, traditionally their approach to "getting to know" users involves market research, website analytics, and user behaviour tracking. While valuable, a purely quantitative data-driven approach often paints an incomplete picture. It tells us what users do, but not why they do it. It captures the clicks and scrolls, but misses the motivations, frustrations, and desires that drive them.

Imagine a banking app. Data might show a spike in mobile app logins at the end of the month. But is this because users find the app intuitive, easy to use and valuable to them? Or simply because they have no other way to check their account balances to ensure they have enough funds for monthly bills? Understanding the "why" behind user behaviour is key to unlocking true innovation and designing customer-centric products.

Real user insight goes beyond surface-level data. It requires digging into the reasons behind actions, uncovering the context of usage, and understanding the emotional drivers of behaviour.?

Understanding human behaviours

Instead of solely relying on data, companies need to delve deeper and explore the human story behind the user. By integrating qualitative research methods such as interviews, ethnographic research, co-creation and user testing and validation, companies can gain a holistic view of their users and unearth a wealth of hidden insights.

Through these methods, we can rapidly discover:

• The user journey: What steps do users take before, during, and after using your product or service? What context do they use it in? Are they using your app on their morning commute, in the middle of a busy workday, or while relaxing at home?

• Hidden pain points: What are the frustrations users face while interacting with the product or service? Does your product or service solve one problem but create several more?

• Untapped potential: What unknown needs do users have that the current offering doesn't address? What else could you be doing to create value for customers?

• Shifting expectations: How are user expectations and behaviours evolving in response to new technologies or trends? What do younger target markets expect from you?

By considering these contextual factors, companies can develop solutions that seamlessly integrate into users' lives, not just add another complication. In the banking app example, qualitative insights might reveal that users find the app necessary but difficult to use, leading to stress during critical financial moments. This understanding can drive meaningful improvements, such as simplifying the user experience or adding features and resources that create reassurance.

Value for customers = value for business

Understanding your customers and building products and services around their needs isn't just about creating great experiences and happy customers; it's a strategic approach that directly impacts the bottom line.

Customer loyalty & repeat business: Personalised experiences and solutions that are truly valuable to people encourage customers to return. According to studies carried out by the Temkin Group, companies that excel in customer experience achieve a customer lifetime value (CLV) of up to three times higher than their competitors. For example, Amazon’s focus on customer convenience, with features like one-click purchases and personalised recommendations, encourages loyalty and boosts repeat business - increasing their CLV.

Enhanced word-of-mouth: Happy customers are more likely to recommend your products and services, serving as powerful advocates for your brand. Companies that prioritise customer-centric strategies often see increased referrals and organic growth. Consider how brands like First Direct have built reputations on exceptional customer service, leading to strong word-of-mouth recommendations.

Reduced customer churn: Companies can drive higher retention rates by truly understanding their customers and addressing their pain points. Bain & Company found that a 5% improvement in customer retention can increase profits by up to 95%. For example, Spotify discovered from user interviews that users were overwhelmed by the sheer volume of available music and found it difficult to discover new songs they might like. This insight led them to develop the "Discover Weekly" playlist, which curates music based on individual preferences, increasing user satisfaction and reducing churn.

How we approach research

We learnt very early on that quantitative research wasn’t enough for us to create the products we wanted to see for our clients. As we talked about in our last blog, deep user-research and co-creation is deeply embedded into our process, and it not only helps us build accessible and inclusive products, but build things people actually want and need.?

Below are a few of the principles that guide this approach:?

In-depth customer insights: At Made by Many, we specialise in conducting comprehensive user research that goes beyond surface-level data. By employing qualitative methods including interviews, focus groups, and ethnographic studies, we uncover the motivations and emotions driving user behaviour. This enables us to help organisations build a deep understanding of their customers, allowing for more informed decision-making and truly actionable insights.

Collaborative design: Customer engagement shouldn’t finish at the research stage. Made by Many brings users right inside the design process to continue learning and validating through co-design and prototyping. The magic happens here: extending direct customer involvement for longer leads to stronger and more suitable solutions you cannot uncover any other way.?

Agile solution development: Made by Many drives rapid innovation by quickly translating research findings into actionable strategies. Our Agile approach enables us to test and iterate on new ideas with real customers, ensuring that product design efforts remain aligned with user needs and expectations.

Cross-industry expertise: With experience across diverse sectors, Made by Many offers valuable insights and best practices that can be adapted to different contexts. Our ability to draw from various industries fosters creativity and a truly customer-led approach that helps organisations stay ahead of the curve.

Strategic partnerships: We collaborate closely with organisations to align strategic goals with user insights. We have and continue to work as an extension of organisations’ teams, ensuring that customer-centric strategies are integrated into every aspect of the business.

As the digital landscape continues to evolve, companies must look beyond mere data to truly understand and serve their customers. By prioritising customer understanding and weaving it into the core of your business strategy, you can unlock a wealth of benefits. You'll develop products and services that truly resonate with your target audience, fostering loyalty, boosting revenue, and propelling your business towards sustainable growth.

If something we’ve said here resonates, feel free to get in touch.??