Brain power

Managers failing to grasp what their customers think

Originally posted on The Horizons Tracker.

We live a big data driven age where organizations have seldom had as much information about consumers as they do today, yet a recent study1 from Indiana University suggests that managers have next to no idea about just what customers want. The authors believe there is an enormous disconnect between managers and customers in terms of what really matters and drives customer satisfaction.

The authors cross referenced data from a satisfaction survey of 70,000 customers with the same questions asked of over 1,000 marketing managers from Fortune 500 firms. It was remarkably common for managers to significantly overestimate just how satisfied their customers were.

“Clearly there’s been a communication breakdown,” the authors say. “Either the messages aren’t being disseminated, or they aren’t being understood within organizations. Otherwise, managers would have a better understanding of both the level and drivers of dissatisfaction among customers.”

Unsatisfied customers

All of which is a significant problem, as it means managers often have no idea of the problems customers face, and without this basic level of awareness, those problems usually go unsolved.

Sadly, this is often through no lack of effort. Most of the company’s surveyed had customer-satisfaction monitoring systems in place, but for some reason this data doesn’t tend to find its way back to the marketing managers, or they aren’t understanding the data correctly.

“These overly optimistic managers are likely to miss trouble signs when they appear,” the authors say. “This is compounded by managers significantly underestimating the proportion of customers who have complained about the firm’s products or services in the recent past.”

The authors believe the findings may explain, in part at least, why companies so often seem to place excessive emphasis on cost-cutting and efficiency rather than on improving the quality or differentiation of their products. This often stems from a lack of understanding of just how dangerous such cutbacks really are.

“There seems to be a belief in lots of companies — and it’s kind of an urban myth — that most people who are unhappy won’t complain,” they continue. “Therefore, the complaints that you get are not representative of the level of satisfaction that exists among general customers. This data suggests that they shouldn’t be treating complaints as something different. They should be used as part of an overall customer feedback system.”

The authors hope that their findings serve as a bit of a wake-up call for managers that customers really aren’t very happy with what they get, and that this has an impact. It also underlines the futility of so many market research and customer feedback efforts, when the data collected so often gets ignored. Of course, whether that’s a message that managers wish to hear is open to debate.

Article source: Managers failing to grasp what their customers think.

Reference:

  1. Hult, G. T. M., Morgeson, F. V., Morgan, N. A., Mithas, S., & Fornell, C. (2017). Do managers know what their customers think and why?. Journal of the Academy of Marketing Science, 45(1), 37-54.

Adi Gaskell

I'm an old school liberal with a love of self organizing systems. I hold a masters degree in IT, specializing in artificial intelligence and enjoy exploring the edge of organizational behavior. I specialize in finding the many great things that are happening in the world, and helping organizations apply these changes to their own environments. I also blog for some of the biggest sites in the industry, including Forbes, Social Business News, Social Media Today and Work.com, whilst also covering the latest trends in the social business world on my own website. I have also delivered talks on the subject for the likes of the NUJ, the Guardian, Stevenage Bioscience and CMI, whilst also appearing on shows such as BBC Radio 5 Live and Calgary Today.

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