How well do you actually know your customers? You likely have their purchasing data and demographic information, but do you truly understand their hopes and dreams?
The current crisis is revealing the stark difference between true customer intimacy – a deep-seated knowledge of the customer’s thoughts, needs, challenges and aspirations – versus traditional customer intelligence that is gathered by most firms, which tends to be facts and data about buying patterns and demographics.
When the customer’s situation changes, as it has in the current crisis, customer intimacy trumps customer information.
I recently spoke with Rachel Sanborn, Director of Advisory Services at Ellevest, the online financial advisory service for women that has disrupted the financial industry, about how their team was able to draw upon their deep knowledge of their customers to provide new services, and pivot quickly.
As a result, Ellevest is experiencing an increase in customer engagement and inquires. Their playbook illustrates three things other firms can do right now to drive innovation and differentiation:
1. Identify your customer’s unspoken hopes and dreams.
Buying behavior is what’s happened in the past, you want to innovate for the future. This requires deep understanding of your customer’s current reality beyond their stated needs. You want to understand and tap into their unspoken needs and desires.
Ellevest was founded in 2014 by Sallie Krawcheck, who previously led Merrill Lynch, Smith Barney, and Citi Private Bank as CEO, to, “unleash women’s financial power and get them invested in their biggest goals.” Sanborn says, “The data shows that when we ask women, what is your biggest confidence builder? What enables you to make positive changes? The biggest thing that builds confidence for women is having a savings plan for themselves. The team’s sense of noble purpose, and their deep understanding of their customers’ personal and emotional relationship with money, enabled Ellevest to innovate quickly. After culling through thousands of questions from their users, Ellevest launched a new membership program with lower minimum requirements, starting at $1 a month. The three-tiered program makes financial advice accessible to more women, during a time when they feel financially vulnerable.
Other firms can mirror this approach by asking, what are my customers afraid of right now? Let go of your past frame of reference. Instead, quickly pull together a user-panel or focus group to identify the most pressing issues on your customer’s minds. Armed with this knowledge, you can reconfigure your offerings to become immediately relevant.
2. Solve the root problem, with an eye to the future.
A crisis either strengthens your relationship, or it erodes it. If you’ve ever experienced a personal crisis yourself, be it job loss, health scare, divorce or financial problems, you probably remember who was helpful and who was not. Many a marriage or friendship has fallen by the wayside during a time of stress. On the flip side, when someone helps you look beyond the current challenge, provides you with practical help to move forward, they endear themselves to you forever. The same dynamic applies to brands and vendors, albeit in a somewhat less dramatic way. When all, or most, of your clients are going through a crisis at the same time, your response defines your reputation.
Ellevest quickly discerned, their clients (and prospective clients) were losing ground financially. Krawcheck articulates, “As a result of the pandemic, women overall — and especially Black and Latinx women — are losing their jobs at a higher rate than men are. Women who are still in the workforce are taking on greater child care burdens, forcing many of them to quit.” Understanding their clients’ root problems – lack of income, lower pay, less job stability – is why Ellevest offers their members access to career coaching in addition to financial planning. Sanborn notes, “We leaned into the insatiable appetite people had to know more, and the coaching sessions were tailored to people’s needs.”
As you think about your own firm’s customers, ask what are the larger issues behind their presenting problems? What could we do for them that would help them better navigate their future? Ellevest understood, better paying jobs and more career confidence are root issue for their clients. Helping their clients address these challenges, differentiates Ellevest and it creates more prosperous customers for the future. What are the root issues for your clients and how can you help them address them?
3. Actively solicit input from team members who look like your customers.
Years ago, when I was a young sales leader for a consumer products firm our largest customer, a major grocery chain, called in their vendors to show us the plans for their new retail store model. They told us, “Our goal is to get our target customer (moms of young children) to spend more time in the store.” As they displayed the beautiful new deli, the wide aisles, and the huge baby section, I found myself thinking, “Aren’t they going to do anything about the bathrooms?” I’d watched mothers struggle to change a diaper on the counter while trying to keep their toddlers from touching anything in the dirty back of the store bathrooms. I remember thinking if you want your customer to stay longer in the store, you need a nicer bathroom.
However as a young female leader in a room full of older executive men, I was afraid to voice my opinion. I thought, surely they’ve already noticed something so obvious. They hadn’t. It was a full decade before grocery stores began to have nicer bathrooms.
Innovation that is compelling to customers requires having people who look and think like your customers in the room while you’re exploring options. Otherwise, you’re missing opportunities. When Ellevest interviewed women they discovered a crucial difference in their approach to investing. When men discuss investing, they usually have a specific dollar amount in mind. For women, it’s not about outperforming the market; it’s about reaching personal goals – like buying a second home, retiring well, starting a business, or building an emergency fund. The money is a means to an end. The language Ellevest uses on their site to engage prospective customers reflects this emotional difference.
Ellevest has won a Cardrates.com Editor’s Choice award, and is one of CNBC’s Disrupter 50 companies. This recognition comes in part because they speak to their target customers’ hopes and dreams in a way that traditional financial services have not.
As you consider own future offerings, look around your leadership table. Do the faces you see represent what you want your customer base to look like going forward? Despite our best intentions, people consciously and unconsciously develop plans and products based on our own realities. If you’re looking for new customers, you need people who represent that demographic and mindset on your senior team. It’s hard to create customer intimacy if no one on the team understands the customers’ reality.
Customer intimacy is quantitative and emotional, it’s more “touchy feely,” than traditional customer intelligence, and thus harder to measure and articulate. It’s also crucial for driving innovation. Use the above three suggestions to get more insight into how your customers think and feel. When you understand who you customer is beyond their buying habits, what their root challenges are, and your team reflects that reality, you can innovate more quickly and create more compelling offerings.