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SEPTEMBER
77
BUSINESS
INTEL TIME
E
very day, well-known companies and
even entire industries go bust. Film,
appliance repair, movie rental chains –
and the list goes on and on. In fact, according
to the American Enterprise Institute, 88% of
Fortune 500 brands from 1955 are no longer
with us. They simply failed to transform as
technology, markets, consumer needs, and
customer desires changed.
As the saying goes: “Those who don’t
learn from history are doomed to repeat it.”
So, why do so few companies recognise the
consequences of failing to change with the
times? Why is my local supermarket
crammed with products made from artificial
ingredients, when today’s shoppers are
obsessed with natural and organic?
Why has McDonald’s changed so little
over the last decade, while other American
chains such as Five Guys, Smashburger,
In-N-Out, and White Castle have conquered
the hamburger world?
Why did Blackberry cling to their
keyboard, while the smart phone revolution
took place all around them?
Recently, on stage at a gathering of
executives in New York City, I asked how many
had spent time in a consumer’s home over the
past year. Out of 3,000 executives in the
audience, only two raised their hands. I could
almost hear them asking, “Why should I? All I
have to do is turn on my computer, and I’ll find
never-ending streams of data modelling how
consumers feel about my brand.”
But isn’t this the same as describing the
love of your life by the numbers? “I love
her because she’s 6 feet 7 tall, her hair
colour is Pantone 39134, and the last four
digits of her cell phone number turn me
on.” I have to wonder: Does this make the
same kind of sense?
Over the last few years, I’ve become aware
that we may have mountains of data, but we
possess almost no information. As we’ve come
to rely on BIG Data to understand our most
important asset – our customers – we’ve
stopped listening to what truly matters in the
marketplace: our customers’ deeply-held
emotions, wants, desires, and needs.
Not long ago, one of the major US banking
institutions, relying on BIG Data,
misinterpreted an increase of “churn”. This
term refers to customers who begin to move
their money around, refinance their mortgages,
and show other signs that they may be on the
verge of moving their business to another bank.
Acting proactively to stop the loss of business
they believed was roaring down on them, the
bank began preparing letters asking its
customers to reconsider moving on. Just before
mailing the letters, though, the bank executives
discovered something surprising. Yes, indeed,
BIG Data, the accumulation of endless data
streams, had uncovered evidence of churning,
but because BIG Data couldn’t see into the
customers’ lives, it couldn’t explain the cause
of the churn. The churn wasn’t because
customers were dissatisfied with the bank. The
real reason? These customers were getting
divorces, which explained why they were
shifting around their assets.
Some people think I have a strange job. I
spend time in consumers’ homes, observing,
listening, exploring, and delving into their
true desires. Strange, maybe. But what I
discover often has important results.
A young lady combined superstition with
her struggle to lose weight into a ritual-
based diet programme that involved
displaying her lost weight on an elegant
charm bracelet. The result? The turnaround
of a multibillion-dollar industry.
A German teenager liked to display a
worn-out pair of sneakers, because they
proved he’d spent countless hours perfecting
a skateboard trick. We realised that young
How should companies keep aware of what their customers
want?
Martin Lindstrom
discusses the importance of
listening to, and understanding, the market, rather than
relying on big data to inform their brand strategy
people are still willing to devote themselves
to a task, as long as they’re left in charge.
The result? The rescue of the world’s largest
toy company.
Or let’s consider the fact that technology
has practically eliminated transitions from
our daily lives. We wake up with our phones,
use them in bed, in the bathroom, while
eating breakfast and in the car. Yet I see
subtle evidence that people yearn for moments
of transition. When we deliberately
introduced transitional zones into the physical
and emotional layout of a major supermarket
chain, sales rocketed through the roof.
All this comes down to one single premise:
to understand our customers, we need to
hone the art of observing and sharpen our
ability to be truly present. But that’s a
challenge for most computer-oriented
business leaders these days.
Picture the last time you found yourself
waiting in a bar for a friend or colleague
who was running a little late. How did you
fill the time? I’ll bet you did something – just
about anything – with your phone. Anything
to stave off the unplanned boredom and to
keep the strangers around you from thinking
you were some sort of loser.
But this behaviour has rather scary
consequences. As we lose touch with our
surroundings and other people, we lose a
great opportunity to observe. We miss a
chance to pick up the very details that may
lead to innovation.
Perhaps most concerning of it all is that we
never let ourselves get bored anymore – and
boredom, I’ve realised, is the foundation of
creativity. It is that moment when we give our
thoughts a freefall, allowing unstructured
observations, reflections, and imagination to
come together in an unstructured swirl. And
it’s in that swirl that we generate innovations.
Technology is wonderful – but it has made