Customer Insight Autumn 2021 by TLF Research

www.tlfresearch.com | Autumn 2021

PURPLE TUESDAY & THE DISABLED CUSTOMER EXPERIENCE ALSO INSIDE… Adapting to Demand Index of Consumer Sentiment Decisions on Auto Pilot Writing a One Page Summary

CUSTOMER JOURNEY Mapping Online training course - by Stephen Hampshire

Customer Journey Mapping is a useful tool that can bring together customer research and insight, service design, and process improvement. This course will give you the knowledge and skills you need to use journey mapping in your own organisation. The course is scheduled to run over 6 weeks, with a new chapter released each week and consists of:

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Over 6 chapters we will take you step by step through planning, developing, using, and communicating your own map for one specific customer journey:

Chapter 1: Making decisions and getting buy-in Chapter 2: Qualitative research to explore the lens of the customer Chapter 3: Quantitative research to prioritise and track Chapter 4: Service design to improve Chapter 5: Systems thinking for the customer journey Chapter 6: Visual thinking for the customer experience "A really informative and balanced course which introduced me to a number of interesting topics, and provided a platform to continue learning on this subject"

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EDITORIAL

Foresight It should go without saying that when we talk about the importance of meeting customer needs, we mean all customers. As our research with Purple Tuesday shows, there’s not just a strong moral and legal argument to focus on the experiences of disabled customers, but a commercial one. UK businesses lost £412 million during lockdown alone, simply because their online experiences made it difficult or impossible for disabled customers to do business with them. I think that’s extraordinary, but not actually surprising. We all need to do more to improve the disabled customer experience, and Purple Tuesday (which was 2nd November) is a great annual reminder and a chance to make a commitment to do so. There’s lots more detail from page 6.

Editor

Hopefully you’re signed up to our monthly TLF Gems newsletter. If you are, you’ll have seen that we linked to this interesting analysis of what CEOs are talking about in their latest earnings calls:

Source: https://iot-analytics.com/what-ceos-talked-about-q3-2021-inflation-supply-chain-disruptions-new-ways-of-work/

In the last issue we covered hybrid work and recruitment, and this time we’ve got an article from Blue Yonder about the priorities for supply chains (a topical piece if ever there was one) – turn to page 16 to find out more. Consumer sentiment has been on a wild ride over the last 2 years, for obvious reasons. We dig into the detail on page 21 and reveal that all that uncertainty is now really starting to eat into consumers’ long term confidence about the economy, in a way that was not true in the early days of the pandemic shock. We’ve also got more from ContactEngine on how behavioural science can teach us about how customers make decisions (page 28), segmentation (page 23), advice on writing a one page results summary (page 12), and our book review (page 33) promises to reveal whether blockchain and cryptocurrencies are worth the hype. Enjoy the articles, and please drop us a line if you’ve got an interesting story to share for a future issue.

EDITORIAL Editor Stephen Hampshire ADVERTISING Marketing Manager Richard Crowther DESIGN & PRODUCTION Creative Director Rob Ward

CONTACTS

Stephen Hampshire

Designers Becka Crozier Jordan Gillespie Rob Egan

Customer Insight is the magazine for people who want to deliver results to employees, customers and any other stakeholders as part of a coherent strategy to create value for shareholders. We publish serious articles designed to inform, stimulate debate and sometimes to provoke. We aim to be thought leaders in the field of managing relationships with all stakeholder groups. www.tlfresearch.com uk@leadershipfactor.com Customer Insight C/O TLF Research Taylor Hill Mill Huddersfield HD4 6JA

NB: Customer Insight does not accept responsibility for omissions or errors. The points of view expressed in the articles by contributing writers and/ or in advertisements included in this magazine do not necessarily represent those of the publisher. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without prior written consent of the publisher.

ISSN 1749-088X

3 Customer Insight Autumn 2021 | www.tlfresearch.com

C O N T E N T S

CONTRIBUTORS

A U T U M N

The Disabled Customer Experience Purple Tuesday (2nd November) is a day to focus on the disabled customer experience. We share some facts and figures from our panel, and speak to Purple Tuesday about best practice.

2 0 2 1

Writing a One Page Summary A punchy one page results summary can make all the difference to the way your research lands. In this article we look at some top tips for writing yours.

Adapting to Demand It’s no secret that supply chains have been stretched to their limits in 2021. Blue Yonder explain the top three supply chain priorities right now.

Nigel Hill

Tom Kiralfy

Stephen Hampshire

Wine-lover, Munroist and customer satisfaction guru

Panel wrangler, amateur novelist and proud dachshund-dad

Conference speaker, book-lover and occasional climber

4 Customer Insight Autumn 2021 | www.tlfresearch.com

CONTENTS

GUEST FEATURE The Disabled Customer Experience 06

Index of Consumer Sentiment

Nigel continues his series on segmentation with some examples of successful behavioural segmentation.

Book Review

We began tracking consumer sentiment in 2018. Needless to say, it’s been through a lot since then, and this is a chance to dig in and analyse what’s going on in consumers’ minds.

RESEARCH Writing a One Page Summary

GUEST FEATURE Adapting to Demand

RESEARCH Index of Consumer Sentiment

HOW HARD CAN IT BE? Segmentation Part 3

GUEST FEATURE Decisions on AutoPilot

Segmentation

Decisions on Auto Pilot

In the second of his series, Albert Evans from ContactEngine explains in more detail how the rules of thumb our brains use lead us into predictable mistakes.

BOOK REVIEW Bubble or Revolution

“Bubble or Revolution” is a great review of the world of blockchain and cryptocurrencies. Should you be building a private blockchain and investing in crypto? Well, maybe…

DESIGNERS

Published by

Becka Crozier

Jordan Gillespie

Rob Egan

Right brain mastermind, music enthusiast and have I told you I’m vegan?

Creative magus, genuine tyke and 20ft wave rider

Beer drinker, pixel pusher and dour Yorkshireman

www.tlfresearch.com | Autumn 2021 Customer Insight 5

G U E S T F E AT U R E

6 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

The Disabled Customer Experience. We often say that great customer experiences are about “doing best what matters most” to customers. In other words you need to find out

Are your day-to-day activities limited because of a health problem or disability?

what customers’ needs are, then meet or exceed them. One of the things that makes it difficult is that needs vary from

13%

customer to customer, and even from occasion to occasion, and your

Yes, limited a lot

own way of thinking may not be a good predictor of other people’s

20%

requirements. When it comes to disabled customers this question becomes

Yes, limited a little

even more challenging, as organisations are often not equipped to understand how the experiences they create may fail to meet the needs of disabled customers, and may not always have the necessary knowledge or perspective to get it right.

66% No

TLF Research teamed up with Purple Tuesday to measure disabled customers’ perceptions of the experiences they receive, to show the impact that not designing for their needs has had during the pandemic, and to understand what we can all do about it. As we’ll show, failing to cater for the needs of disabled customers is not only a moral and legal failing, but a commercial one. It’s a missed opportunity, and this is the perfect time to do something about it.

What the data shows

Do you have substantial difficulties with any of these areas of your life? Lifting, carrying or moving objects

At the beginning of the year, we turned to the TLF Research consumer panel to understand the “state of the nation” when it came to the disabled customer experience.

Difficulties are widespread Around 1 in 3 of our panellists say that their day to day activities are limited as a result of a long term health problem or disability. Estimating the prevalence of disability is tricky, and you can get very different results based on which questions you ask1, but this gives a sense of just how many customers may have needs which are not immediately obvious to your staff.

45%

Mobility (moving about)

42%

Other health problem or disability

20%

Manual dexterity

17%

Your physical co-ordination

17%

Continence

15%

Memory or ability to understand Communication Recognising when you are in physical danger

14% 9% 7%

1This ONS article gives a good summary:https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/ disability/articles/measuringdisabilitycomparingapproaches/2019-08-06 www.tlfresearch.com | Autumn 2021 Customer Insight 7

G U E S T F E AT U R E

Disabled customers feel organisations can do more 54% of disabled people feel that organisations could do more to improve the experiences of disabled customers. The most common themes were around physical accessibility (e.g. ramps, wider aisles),

“Listen to the customer and treat them with respect and dignity.”

“Better access to premises, more hearing loops, more staff training about disabilities.”

“Make us more aware that they are around.”

providing help (e.g. reaching items from high shelves, carrying shopping to the car), and treating disabled customers with respect, patience, and understanding.

possible

measures counters steps even entrances required every premises mental needed services stand

difficulty hearing

persons

way

place

listen

just

problems level

shopping area

ramps

stores

face able l

without

users

areas

around

especially

can car

best extra cater feel

dedicated struggle

customers

organisations shop

free

easy ramps

facility

26%

Accessibility

wheelchairs supermarkets

welcome hidden

disability

listenmakeask staff treat help

train put every

times obvious

place many

time may

customers need

12% Treat customers with Respect, Patience, Understanding

patience individuals

life

available can member

make

hand

disabled

people

help staff

need time

ask

high shelves ensure reach items

get

train

offer

always

11% Provide help

customers

support better

shopping provide

wider t treat special training products try available

6% Training staff

move

let

5% Awareness of hidden disability

respect

time aisles doors service physical

space

disabled people

understanding just patient recognise required

things much like many high

tills

needs problems talk respect

customer disabilities

can feel hearing without better helpful

spaces

4% Priority/Dedicated support 4% Understanding of disability

goods

places patience

others disability y improve waiting

3% Ask what help needed

wheelchair

patient one understanding visible actually users work possible allow online consideration helpful member priority less accessibility e organisation specific often l g individuals companies covid walking difficulties facility welcome

also

parking

places

improve counters

health aware rather aids

door train

shop offer hand shelves

lower stores

spaces

accessible disabilities ensure

make better need staff help get peasier lot

lot

many

eas sure disable support

needs

reach

customers

wider facilities see

make easier

disabled help training

shops

accessibility mobility

hink

give

supermarkets

making

provide

disabled d

people

access

reach

person parking

access

staff

buildings

hidden first customer invisible ensure

people p

put experience ask mobility easy hard lifts

improved making

working

doors just

without etc improved like premises

provisions queue find

disabilities facilities

recognise may see a know dont ta

assistants well

accessible

better

lifts

give

depends

always organisations

provide floors

around entrance member

wheelchair items toilets dont available sure space aisles get need entrances

move

h l wheelchairs shelves

abilty different floors understand toilets entrance etc iitems care everyone lower easily

shops always offer seating

especially

way time high buildings door can easily things

put steps

2% Provide seating

personal

2% Toilet facilities

Some organisations stand out We also asked people if they could name an organisation which had stood out in the way they had dealt with them. Almost every sector

clear stand out performers who came up again and again. The 5 organisations below were each mentioned by more than 4%

of the economy was mentioned by at least one person, and in total

of those who named someone, with the NHS standing out as, by a

customers named 165 different organisations, but there were some

distance, the most frequently named.

The organisations mentioned most

The sectors mentioned most Supermarket

22%

Healthcare

15%

13%

Retail

Charity

Bank/Building Society

8 Customer Insight Autumn 2021 | www.tlfresearch.com

NHS

12%

Tesco

Sainsbury's

Asda

Amazon

G U E S T F E AT U R E

Pandemic and lockdown The pandemic and preventative measures (such as lockdown, social distancing, and masks) has had a huge effect on all of us, but we know the impact has fallen disproportionately onto disabled people. We went back to our panellists to understand their experience during lockdown. 40% of disabled customers have experienced difficulties in interacting

Inaccessible websites may have cost UK businesses as much as £412 million during the pandemic.

with organisations in person during the pandemic, with the main problem areas being communication (19%) and accessibility (18%).

During the pandemic, any difficulties interacting online?

During the pandemic, any difficulties interacting in person? Yes - problems with communication

29%

Yes - problems with accessibility

18%

Yes - website hard to read

15%

Yes - website didn't work for me

18%

Yes - other Yes - difficulty parking

6% No

Yes - other

65%

54%

60%

prevented from spending money A similar proportion have found that measures such as mask wearing and social distancing have made their lives more difficult,

How much more would you have spent?

even though most of those affected still believe that those measures were a good idea in order to contain the spread of the virus. Mean: £165

Have pandemic measures made your life more difficult?

£20-£50 33.0%

£50-£100 24.1%

£200-£500 14.7%

£500-£1,000 4.2%

£1,000+ 3.1%

12%

Yes, and bad idea

28%

Yes, but good idea

£0

£200

Less than £20 7.3%

£100-£200 13.6%

£400

£600

£800

£1,000

£1,200

What next?

61% No

Designing the customer experience with disabled customers in mind is not only the right thing to do, it’s the business savvy thing to do if you want to make sure that you are catering to the needs of a significant minority of customers who are affected in one way or another. In many cases a better experience for disabled customers is one that is better for all customers, whether that’s making your website

The opportunity cost of accessibility

easier to read, or your store layout more comfortable. Improving the experience for disabled customers is a road that

When it comes to interacting with organisations online, 1 in 3

doesn’t have an end, things could always be better, but the striking

customers have experienced difficulties during the pandemic, and in

thing that emerged from the responses to our survey is how big the

over half of those cases it led to the customer not spending money

effect of comparatively small changes could be.

that they would otherwise have spent. At an average of £165, that means that inaccessible websites

Improved accessibility, awareness, empathy, and the confidence to deal with disabled customers empathetically and respectfully should

may have cost UK businesses as much as £412 million2 during the

be areas we can all strive to do better in. Purple Tuesday is a great

pandemic alone.

opportunity to commit to try.

Based on 13,084,000 disabled UK adults 16+ (ONS Population Estimates: 14.1m disabled people minus 1,016 disabled children under 16). Average amount unspent online due to inaccessible websites: £31.46 per person. Total unspent online: £411,622,640

www.tlfresearch.com | Autumn 2021 Customer Insight 9

G U E S T F E AT U R E

Interview with Mike Adams. Hi Mike, can you tell us a little more about Purple Tuesday and why it’s important?

That’s great that so many organisations are on board. Can you give us anymore names – and let us know what measures are being taken by who?

Purple Tuesday is a change programme for organisations of all sizes from all sectors to get

More than 5,000 organisations are participating

involved in, with the common goal of improving

and there are many commitments. As we’re focusing

the customer experience for disabled people 365

on websites, let’s talk about eBay. It’s the world’s

days a year. More than 5,000 organisations have so

largest auction site – and today it’s sharing their

far used Purple Tuesday 2021 as an opportunity to

ongoing efforts to improve the experiences of

make practical commitments to improve the disabled

disabled buyers and sellers on their site and native

customer experience.

apps. They are striving to ensure: • Keyboard-only access throughout the site to help

How many people in the UK live with a disability?

people who prefer not to, or can’t, use a mouse. For instance, people with an injury or a motor impairment.

One in five people in the UK have a disability – which is a lot, but perhaps not surprising given disabled people make up the world’s largest minority group!

• Alternative text for icons and images, which provide a textual description of images for people with sight loss. • Clearly labelled form elements to ensure they’re easily understood for those cognitive disabilities and

That’s a lot of people. What’s the combined spending power of disabled people in the UK?

those using assistive technology such as a screen reader. • Adequate colour contrast across the site and apps for people with colour deficiencies or low-vision.

The Purple Pound – the amount of money spent

• Issuing advice to eBay’s 300,000 small business

by disabled households annually – is estimated to

sellers to avoid small font sizes, use plain but

be worth £274bn to UK businesses – a staggering

descriptive language, avoid light colours in text and

sum, although 90% of firms don’t have a disability

keep animations simple or ditch them altogether.

strategy to benefit from disabled people’s considerable spending power. That sounds like a missed opportunity. We understand you’re focusing on the online space this year. Why is that?

What about offline activities? Is accessibility for disabled people no longer a problem there?

More than one in three disabled people had difficulties using websites during the peak of the

Great question. In person, accessibility for

Covid-19 pandemic – and your research has found

disabled people is an ongoing issue. It wasn’t

that UK businesses lost out on almost £412 million

just websites that caused frustration during the

during the pandemic because their websites are

pandemic – 40% of disabled people had difficulties

inaccessible to disabled people.

interacting with organisations in person. Almost

That’s why we’re urging companies to review

one in five (19%) had problems with communication

the experience of their disabled customers.

and the same proportion had problems with physical

Currently they’re missing out on valuable revenue

accessibility. And while most disabled people agreed

opportunities, which could be fixed by simple

with measures such as masks and social distancing,

changes to their websites. It makes commercial sense

these did make life more difficult for 39%.

to be inclusive and accessible.

10 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

Comment from eBay

Top tips for embedding disability into leadership

Eve Williams, Chief Marketing Officer, eBay UK has commented “eBay’s purpose as a business is to create economic opportunity

Embedding Disability Inclusion into any organisation first starts

for all, and accessibility is a fundamental pillar of that. We know

with Leadership and here are some tips that Leaders can take to

that small changes can make a world of difference to people with a

starting the journey:

disability who use our platform, and we’re committed to continually adapting and evolving our site and native apps to ensure we’re catering to the needs of our customers. The eBay customer base is incredibly diverse, with over 29 million active buyers in the UK alone and 300,000 small to medium sized businesses. Ensuring that we are showing up and representing our customers with disabilities, is not only aligned with our founding values, but is good business.”

• Ensure the conversation is frequent and continual, it has to be part of everything you do so start with adding it to your monthly Board agenda and normalise the conversation • Support the conversation and promote your commitment to change by appointing an accountable board level Champion who bangs the drum and remove barriers to disability inclusion • Take the message in to your Supply Chain and procurement processes by advocating and encouraging disability inclusion within your supplier and partner organisations • Then leverage those partnerships by building your own campaign to promote disability inclusion and expedite the move towards

Mike Adams CEO Purple

accessible experiences for your staff and customers • And remember to make your commitment publicly visible by signing up to the Government’s Disability Confident scheme, elevating your reputation and commitment for change.

www.tlfresearch.com | Autumn 2021 Customer Insight 11

RESEARCH

Sharing the results of customer research can be challenging. As researchers we love detailed presentations, with lots of charts and graphs, but that doesn’t work for everyone. When it comes to sharing the right results to the right

It’s useful to be clear about what the purpose of the summary is. It needs to:

journalism. You’re aiming for something which has the attention-grabbing headline

• Get attention

and spare writing of good journalism, the

• Make a case with specific recommendations

clear explanation of data and visual strength

(based on evidence)

of a good academic poster, and the layer of

• Drive action and decisions

interpretation and clear recommendations

These are the “Hook”, “Contrast”, and

that make for a good exec summary.

“Mission” steps that characterise a good business story, and that’s exactly why you

What is “insight”?

people we need to craft a summary that gets

need the one page summary. Unlike the

attention, makes a strong case, and leaves a

dashboard, and the full slide deck of findings,

lasting memory.

the one page summary is first and foremost

is agencies claiming to deliver “insights”

a narrative argument. You’re making a case,

rather than just “research findings”. It’s

grounded in insight, that supports specific

often more of a marketing claim than a real

recommendations for action.

distinction, but what should you be looking

Why one page? The first question about your one-page

It’s also an opportunity to signpost people

One of the clichés of the research industry

for if you want your one-page summary to

summary is probably: do I really need one?

towards the more detailed findings if they’re

To answer that, it’s useful to think about

interested, but you shouldn’t feel the need to

what the one page summary isn’t. It’s not

include everything in your summary. In fact,

difference between a research finding and

a dashboard. It’s not a full report. It’s not a

the more you can leave out the better!

insight is the difference between saying:

piece of internal comms, although many of the same principles would apply to designing it effectively. So if you already have all those things (and you probably should), do you really need to add more work to the list? Unfortunately

deliver insights? As Jeremy Bullmore explained, the

“Product satisfaction arises less from inherent The one page summary is a narrative

construction and performance than from

call to action, something to grab attention,

consumers' internalised perceptions of personal

get across some key information, and drive

utility.”

change. What’s the best way to approach that?

for you, the answer is definitely “yes” if you

I think we need to draw together the best

want your research to get the attention it

bits from 3 models: the executive summary,

deserves.

the academic poster presentation, and

12 Customer Insight Autumn 2021 | www.tlfresearch.com

and Theodore Levitt’s famous observation: “People don't want quarter-inch drills. They want quarter-inch holes.” The point is that presentation matters. If you can find a punchy, memorable way to put

RESEARCH

You need a very clear, very punchy,

it, ideally with some sort of visual metaphor or image, then it’s much more likely to be

Hook

headline message. You need to support the argument you’re making with key

understood, remembered, and applied. We can expand on that idea to look for a systematic way to turn findings into insight. We start with whatever fact it is we’ve learned, and we synthesise that with things we already know to put that piece of knowledge about the world into context.

You have a problem! Let me describe the problem. Now let me show you how to fix it...

information that evidences it, quantifies it, and brings it to life. That information should make an appeal to the emotions as well as the rational analysis of your readers. Finally, you need to make strong recommendations as to what the results you’re sharing mean, and what decisions you

Finding

Insight

Synthesis How does this fit with what we know?

Interpretation What does it mean?

I’d suggest that a good hook is to state

If you can’t articulate that, then what’s the

you’re losing customers to competitors, or

point of reading your report? What, frankly,

that 20% of customers have experienced a

was the point of conducting the research it

problem with a particular touchpoint. It’s

was based on?

always tempting to frame these sorts of

mindset is that you should ruthlessly trim

you to frame them in the most alarming way

away the fat in every aspect of your report.

you can in order to get attention.

Hone the writing as much as you can. Refine

If you get that right, you can pretty much more, so support your statement with a few And, most important of all, make sure you

fact that the one-page summary is short doesn’t mean it’s quick to do. In fact, it often takes longer to write a short report

Bearing bad news is ok as long as you come

than a long one. Why? Partly because efficient communication takes work to revise, and

The editorial mindset

partly because the narrative required for a summary forces you to think through

A good summary report comes from

your evidence, and to produce statements

adopting what I like to call the “editorial”

of cause and effect. That’s what makes it

mindset. When you’re analysing the data

powerful.

you have to be neutral. You don’t have an

conclusions about cause and effect, and

opinion. You find out what the data tells you

that in turn means that we can apply it to

about the world. Once you’ve done that hard

our organisation, making recommendations

work, though, you need to present it to other

about what we should do. As important as

people in the most forceful way possible.

all the rest, though, is packaging that insight (like Levitt’s ¼ inch holes).

There’s a saying that “writing is

can do to address the problem you’ve raised.

properly, perhaps drawing some tentative

into a pithy, memorable, visual summary

clutter.

show them that there is something that they

with a solution as well!

That helps us to interpret the fact

charts and graphs to remove unnecessary

re-writing”, and I think it applies here. The

killer pieces of evidence.

Packaging How can we make this visual and memorable?

The second key part of the editorial

things in a positive way, but I’d encourage

guarantee your readers will want to know

Application What does it mean for us?

think should be taken as a result of them.

a problem for your audience, perhaps that

Cause and effect In terms of the specific information you need to include, and what your message should be, the details obviously depend on

Editorial Mindset

your exact situation, but again we can look for some general principles. If I had to boil it down to one thing, it

Your hook Let’s turn in a bit more detail to what

would be this: the results you share will be

Clear headline message

making arguments about cause and effect.

summary. You’ve got to get the attention

Key supporting information

knowledge relevant to understanding

means you need a punchy hook. You can’t wording.

As Professor Tufte said, “Good displays of data help to reveal

is going to be read, let alone actioned. That afford to be careful or diplomatic with your

they make links between survey data and other things. In other words you need to be

you might want to include in your one page of decision makers if your results summary

interesting and actionable to the extent that

Strong recommendations

mechanism, process and dynamics, cause and effect.”

www.tlfresearch.com | Autumn 2021 Customer Insight 13

RESEARCH

The point is not necessarily to prove

Power Words Power Words

a causal relationship beyond doubt, but to present data in a way that helps us to understand and discuss those possible links.

...because... ...because...

A good way to think about this is to look at the language you are using. Is it purely

...therefore... ...therefore...

descriptive? “Satisfaction is higher in the

If...then... If...then...

North East?”, for example. If so, then look for ways to address

Unless... Unless...

causal questions, and the key is often in a small number of words, such as because (“Satisfaction is higher in the North East because of …”), therefore (“Satisfaction is

That’s not an exhaustive list, but hopefully

higher in the North East, therefore customers

you can see the difference between describing

…”), if (“If we invest in our regional hubs to

a fact about customers and the much more

bring them up to the standard of the North

powerful argument you can make by linking

East, then…”), unless (“Unless we act to

that fact to other information about causes

improve in the South West we risk losing

and consequences.

these customers…”).

Five tips for a compelling one pager Be Brave Get out of the comfort zone of reporting back descriptions of what customers said in the survey. Make arguments about cause and effect, talk about what the data means and how it links to our performance as an organisation. Be visual Make your one-page summary as visual as you can. It helps engagement, and it makes it more likely that people will remember key information. Be direct Make your writing as punchy and direct as you can – as if you were writing copy for an ad, rather than a report. Mike Monteiro suggests, rightly, that saying “if we launch this feature we’re going to get someone killed” is much more likely to get attention than “I have some concerns about this new feature”. Be receptive If you can, test your report on other people, ideally someone who doesn’t know much about the survey. Does it make sense to them? Do they follow your argument? Be prepared And finally, although it should stand on its own as a document to be read, expect questions. That’s a good sign, because it means people are interested and engaged enough to ask them!

Make sure you’re ready to defend your conclusions, your survey methodology, and have as many facts and figures ready to Stephen Hampshire

answer questions as you can. Dealing with

Client Manager

questions effectively is an important part

TLF Research

of establishing your credibility, and that’s

stephenhampshire@leadershipfactor.com

often the final hurdle between your results summary and action starting to happen.

14 Customer Insight Autumn 2021 | www.tlfresearch.com

BOOK REVIEW

New book

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G U E S T F E AT U R E

16 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

Adapting to Demand

THE TOP THREE SUPPLY CHAIN PRIORITIES FOR 2022 Supply Chain in partnership with Blue

(or at least minimise) disruption in order to

intense changes over the last year. While the

Yonder, surveyed supply chain professionals

protect the supply chain and the customer

COVID-19 pandemic emphasised the need

and found that COVID-19, customer

experience alike moving forward.

to safeguard supply chains in the event of

centricity, rising e-commerce complexity

worldwide disruption, black swan events

and costs, the need for direct-to-consumer

such as the Suez Canal blockage revealed

(D2C), and the risk of financial peril is

just how fragile supply chains are. But for

propelling retailers, manufacturers and

retailers to consistently match customer

LSPs to digitally transform. But what are

a dramatic rise of e-commerce over the

demands, they must have the tools in place

the top three priorities and strategies of

pandemic. As consumers have become

to overcome this disruption and adapt to the

supply chain professionals when it comes

accustomed to shopping in this way, supply

ever-changing behaviour of consumers.

to building these resilient supply chains,

chains are having to adapt and modernise

adapting to consumer demands and

in line with this consumer preference.

safeguarding the customer experience?

With online sales increasing more than

The logistics industry has witnessed

The current interruption caused by the lorry driver shortage in the UK due to Brexit and the ‘pingdemic’ highlights

Organisations are focusing on rising

1) E-commerce It’s no secret that retailers witnessed

120%1 over the past year, LSPs have seen

again the importance of creating resilient

e-commerce, risk management and

e-commerce volumes explode and this

supply chains. With additional factors

adopting digital-first technologies to

unprecedented rise has led to considerable

such as climate change putting pressure

future-proof supply chains in line with

change within the industry.

and uncertainty on the future of global

changing customer behaviour. The key

logistics, retailers, manufacturers, and

to building resilience here is through

area, shippers and LSPs are modifying

logistics service providers (LSPs) need to

incorporating the latest supply chain

their logistics footprint, engaging in digital

focus on building robust supply chains

technology to support business continuity

transformation, and renewing business

so consumers can continue to enjoy full

and uncertainty throughout operations. I

models to cope with demand. In turn, this

availability and flexibility of purchases. In

will therefore outline the top three supply

change has provided the opportunity for

today’s competitive environment – customer

chain priorities of 2022, including the

retailers to adopt an omni-channel approach

satisfaction is key and the importance

growth of online shopping, the focus on risk

to their customer experience, to appeal to

of ensuring the customer journey is not

management strategies and the importance

consumers from multiple different selling

disrupted by external factors is essential.

of adopting digital-first technologies; plus

channels. Companies looking to capitalise on

I will explain how organisations can best

these omni-channel opportunities created

address associated challenges to overcome

by the increased online order volume over

The State of Supply Chain Execution Report 2021, conducted by Reuters Events

As a result of anticipated growth in this

www.tlfresearch.com | Autumn 2021 Customer Insight 17

G U E S T F E AT U R E

the last 18 months are prioritising more

build more sustainable, resilient and agile

2021, the pressure is on for businesses and

agile delivery and fulfilment models. This

organisations for the future. In order to

consumers to focus on sustainability to

includes direct-to-consumer (D2C) to

provide the best service for customers in

future-proof operations. Flash floods in

deliver on consumer needs and maximise

line with the increase of online shopping

Germany over the summer, for example,

the customer experience. But what does this

and shift towards e-commerce, finding the

caused incredible tragedy, while delaying

mean for retailers?

best solution involves the optimal mix of

shipments and affecting global supply

customer centricity, cost and sustainability,

chains. By making a focused and concerted

and this is where technology excels.

effort to introduce sustainability into supply

I expect most e-commerce channel volumes will at the very least remain at the

chains, retailers will be able to protect

level we are experiencing today. There may be further increases in some verticals, for

2) Risk Management

retailers are reducing or totally removing

In addition to the focus on e-commerce,

their high-street presence for an online-

the pandemic brought a multitude of

only model in Europe, such as the fashion-

risk factors into the supply chain that

retailerGAP .

organisations needed to address to overcome

Retailers are clearly pushing their LSPs

their supply chains against future risks but also safeguard their operations against

example in apparel retail. Notably, some

government and consumer pressure to be more climate conscious.

3) Digital-First Technologies

disruption and deliver on customer

to meet the uptick and (in most cases)

experience. The State of the Supply Chain

the LSPs are meeting this, which is a

Execution report found that supply chain

organisations are highlighting how supply

great achievement for the industry after

risk management priorities have shifted

chains are vulnerable to external shocks,

the dramatic changes witnessed. There’s

because of constraints on raw materials,

prioritising digital-first practices and

a distinct air of greater collaboration

labour shortages and growing cybersecurity

technology investments. Greater visibility

between companies and also departments or

threats on distributed networks.

and orchestration over processes and

By prioritising risk management,

functions within companies, meaning there

Previously, risk management and

is more pressure on the industry to improve

resilience were widely ignored in favour

shock scenarios for local and global

visibility and planning in order to counter

of efficiency and just-in-time production.

disturbances easier and more effective.

the stress of storage capacity and increased

Now, organisations are making concerted

2020 – and even the first half of 2021 –

returns. Retailers are working together

efforts to break down silos in supply chain

have seen an acceleration in many emerging

with LSPs like never before to manage the

operations to enable long-term strategies

digital trends pre-dating the pandemic

e-commerce growth. And, with an improved

and actions in their logistics infrastructure

and the expectation of continued growth

holistic view of their entire supply chain,

and technology to ensure that future shocks

in these areas means that companies need

retailers can be in a position to effect

will be minimised, and the end-consumer

to enhance their supply chain capabilities,

positive changes.

will not be affected.

rather than throw resources at difficult

Investing in transportation management

Solutions like the Luminate™ Control

suppliers make managing risk and modelling

situations. Attaining interconnected

systems (TMS) and warehouse management

Tower provide retailers with full visibility

systems, integrating key systems such as

systems (WMS), as well as end-to-end

across the supply chain to help businesses

TMS and WMS as examples, and successfully

visibility, automation and cloud strategies

make informed decisions around deliveries,

leveraging the power of artificial intelligence

will help supply chain professionals to

stock and product lifecycle and help retailers

(AI) and machine learning (ML) are

to manage operations in response to risks.

irreversible trends, allowing supply chain

The enhanced and holistic view of the total

operators to convert insight from end-to-

Jim Bralsford

supply chain makes it much simpler for

end visibility into optimised and profitable

Senior Director,

companies to adapt sourcing and fulfilment

action.

3PL Industry Strategy,

channels. This gives answers to questions

Blue Yonder

such as, “so what if my shipment is

e-commerce, investment in modern supply

delayed?”, enabling retailers to mitigate

chain technologies and new approaches

risks and delays on their supply chain far

have become essential for businesses to

more effectively than without supporting

keep pace with shifting trends and customer

technology.

expectations. The State of Supply Chain

Jim joined Blue Yonder in February 2021 to continue his 20+ year career in supporting 3PL and supply chain solutions. His experience includes working for organisations in UK, EMEA, Asia-Pacific and Global roles, leading sales and solutions teams, to Senior Vice President level; notably with Unipart, Exel, Ceva and most recently E2open.

Linking back to the growth of

A crucial aspect of this is sustainability.

Execution Report 2021 found that pressure to

Over half (53%) of retailers/manufacturers

reduce supply chain costs, improving service

and half (50%) of LSPs plan to invest

levels for retailer customers and dealing

in sustainability as a strategy for risk

with labour shortages are the main drivers

management. Climate change affects us

of investment in supply chain technologies

all. With the hottest July ever recorded in

and digital-first practices for LSPs.

18 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

For retailers to thrive above competition,

through AI and ML adoption and is essential

prioritising technologies that enable visibility

focusing on customer experience is essential

to withstanding disruption and adapting to

for both customers and operations, while

and any disruption to the supply chain

consumer behaviour. By exploring the top

automating processes and supporting

threatens this.

priorities for supply chains and witnessing

Moving away from legacy systems and

enterprise agility, is essential for future-

While ensuring customer satisfaction and

how retailers can – and have – adapted

proofing the supply chain. Introducing

supply chain efficiency, organisations will

to changing demand, from e-commerce

digital-first technologies is becoming

have to navigate an increasingly volatile

to risk management, and embracing

increasingly more important to lower costs,

world, both politically and environmentally.

digital technologies, it’s clear that the

cope with demand and deal with changing

This constantly evolving environment

right technology supports companies to

consumer behaviour, and one that underpins

demands for organisations to have the

be one-step ahead. In essence, digital

supply chain strategies for all organisations.

latest technology to be able to respond as

transformation is underlying the top supply

quickly and effectively as possible to any

chain priorities for 2022 and is the key to

Moving Supply Chains Forward

problems as they happen. This also extends to mitigating the

As the economy transitions to post-

risk of foreseeable problems

adapting to consumer demands and building the resilient supply chains of the future.

pandemic environment, retailers, manufacturers and LSPs are transforming transportation and broader supply chain operations to address the most pressing supply chain challenges. I believe that the rapidly changing customer behaviour, including the move to online and preference for convenient deliveries or collection, whilst maintaining sustainability requirements, will be the focus for supply chains going forward.

www.tlfresearch.com | Autumn 2021 Customer Insight 19

TLF GEMS NEWSLETTER MONTHL CX INSIGHTS FROM MONTHLY RESEARCH TLF RESE

Our mon monthly newsletter shares our favourite Custome Customer Experience, Insight, and Service Design h highlights.

TLF GEMS PODCAST

A MONTHLY PODCAST FROM TLF RESEARCH ON CUSTOMER EXPERIENCE AND INSIGHT

If you’re reading this and you like podcasts, you should definitely check out the TLF Gems podcast. Each episode Stephen and Greg talk about a different topic related to Customer Experience research and insight.

Search “TLF Gems” in iTunes or subscribe directly using the feed http://feeds.feedburner.com/tlfgemspodcast

RESEARCH

Index of Consumer Sentiment: TWO ROLLERCOASTER YEARS We launched the Index of Consumer Sentiment in October 2018. For the first six months it remained very static, and we began to worry that it might not be a useful indicator. Then, through 2019, we started to see some big shifts up, with a real spike in consumer optimism about the future in January 2020. Then…well, you know what happened then. It turned out the “big” shifts we’d seen in 2019 were not so big after all, as consumer sentiment fell off a cliff between January and April 2020. Since then we’ve seen consumer feelings about their own finances and the economy fluctuate as optimism and pessimism about the pandemic vie for dominance.

www.tlfresearch.com | Autumn 2021 Customer Insight 21

RESEARCH

The measure – a reminder The Index of Consumer Sentiment measures three things (using a total of 5 questions): •

How people feel about their own financial situation

•

How people feel about the general economy in the short term

•

How people feel about the general economy in the longer term

As well as the overall index, there are two sub-indices – the Index of Current Economic Conditions (ICC), and the Index of Consumer Expectations (ICE). Comparing these gives a good sense of how customers feel right now versus their view of the future prospects for the economy.

Sentiment in late 2021 In July it looked like things were getting back on track, despite the

shocks, such as the supply chain issues which have been extensively

lingering effects of the pandemic; but now it seems that broader economic

reported, have sent consumer confidence plummeting back down again.

85 80 75

Index of Current Economic Conditions 73.5 Index of Consumer Sentiment 69.8 Index of Consumer Expectations 67.4

70 65 60 55

Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

Comparison to the USA We have chosen a methodology that allows us to compare consumer

benchmark of how consumers are feeling in the EU. It turns out

sentiment in the UK with the University of Michigan’s Index of

that they have recovered much more strongly from the effects of the

Consumer Sentiment1. This helps us to see that the pandemic is indeed

pandemic, and are now more confident than at any point in the history

a global phenomenon, and it does seem to suggest that the issues

of the index (back to 2007). EU consumers do not seem to miss us! This is an important reminder that the Anglophone world is not the

consumers are experiencing in the UK are reflected on the other side

whole world, and the perceptions of consumers in markets that we

of the Atlantic as well.

don’t hear very much about, even if they’re not far away, can be very

We don’t, unfortunately, have precisely comparable data for the

different to ours.

EU, but the EU Economic Sentiment Indicator (ESI) does give a rough 110

140 130

100

EU 90 Index of Consumer Sentiment

120 110 100

USA UK

80 70

1http://www.sca.isr.umich.edu 22 Customer Insight Autumn 2021 | www.tlfresearch.com

Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

EU Ecnomic Sentiment Indicator (ESI)

RESEARCH

Beneath the index

Breaking it down

To understand what’s really going on, we can look at the individual questions that make up each of the indices. The three headline index

It’s also valuable to see how views differ among different groups of UK consumers.

numbers are calculated from a combination of questions, each of which is expressed as an index based on positive versus negative answers. In other words, a score of 100 means that the same number of people

Conservative voters are more confident about the economy

gave a positive answer as gave a negative answer, and a score below 100 means that there were more negative answers. Let’s have a look at what’s happened to each of the five questions over time…

For the first time in this wave we can look at how consumer sentiment varies according to voting intention, and the results are fascinating. People who would vote Conservative if there was an election tomorrow have far more confidence than others, particularly

Better or worse off than last year?

when it comes to their expectations for the future, while Labour voters 100

104

103

102

103

are most pessimistic about the future of the economy. 95

100

Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

Conservative Plaid Cymru

Is now a good time to buy big things?

104

109

107

Lib Dem Green

110 96

103

UKIP

69 Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

SNO Labour Other

Long term business conditions

106

107

109

111

118 100

111 98

ICS ICC ICE

114 98

Men are more positive than women, especially since the pandemic

Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

We have seen for some time now that men tend to score higher in the ICS — in fact they’ve scored higher than women in all but one wave — but the gap seems to have widened as a result of the pandemic, and has stayed around 7-10 points throughout 2021.

Next year better or worse off?

100

100 87

79 75

70 73

84 80

79 77

80 71

72 73

Male

Oct-21

Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

50 Oct-21

Jul-21

Apr-21

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Jan-21

76 55

Oct-18

Jan-19

Oct-18

Oct-20

Jul-20

Index of Consumer Sentiment

Short term business conditions

Oct-21

107

Jul-21

103

Apr-21

101

Jan-21

101

Oct-20

Jul-20

Apr-20

107

Jan-20

102

Oct-19

Jul-19

Apr-19

101

Jan-19

Oct-18

105

Female

www.tlfresearch.com | Autumn 2021 Customer Insight 23

RESEARCH

Young people are more confident about the future

100

Looking at how sentiment has varied for different age groups of

34 year olds have remained confident, and 45 – 64 year olds have remained relatively pessimistic throughout, but we’ve picked out the stories of the 18 – 24 year olds and the 65+ in the chart below. Both grouped started in October 2018 in the middle of the pack, but the pandemic has created strong differences between them. 100

Index of Consumer Sentiment

consumers through the pandemic tells a very revealing story. 25 –

25-34, 85 18-24, 84 80

35-44, 72

55-64, 61 45-54, 58 65+, 59

Jul-21

Apr-21

Jan-21

Jul-20

Oct-20

Apr-20

Jan-20

Jul-19

Apr-19

Oct-19

65+, 67 55-64, 64 45-54, 62

Jan-19

35-44, 73 70

Oct-21

25-34, 83 18-24, 80

Oct-18

Index of Consumer Sentiment

Summary There’s a lot more data to dig into, but looking back over the 3 years of data we now have reveals some fascinating insights:

• Consumer sentiment as measured by ICS is very sensitive to how people are feeling, and therefore an important indicator Jul-21

for businesses

Oct-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

• The sub-indices (ICC and ICE) show that consumers are good at distinguishing their current position from their perceptions

These differences become even more stark when we turn to perceptions about the future of the economy and their personal finances. Older consumers are more confident when it comes to their current economic position, but The Index of Consumer Expectations shows a clear and growing divide between younger consumers and older consumers on their view of the future.

of the future • Consumers are again concerned about the future of the economy • Consumers, particularly those aged 45 – 64, are beginning to worry more about their own financial situation. The two questions about personal finances are at record lows. • Consumers remain wary of making large purchases at the

100

moment. • Confidence in the future of the economy bounced back strongly in 2021, but has fallen rapidly between July and

90 Index of Consumer Sentiment

October. This seems to be reflected in the USA, but less so in 65+, 80 25-34, 80

the EU.

18-24, 75 35-44, 73

Get in touch if you have any questions about the index, or if

55-64, 69 45-54, 67

keep your eyes open for future results.

you’d like more details about the data and methodology, and

Tom Kiralfy Panel Manager Jul-21

Apr-21

Jan-21

Oct-20

Jul-20

Apr-20

Jan-20

Oct-19

Jul-19

Apr-19

Jan-19

Oct-18

Oct-21

TLF Panel

24 Customer Insight Autumn 2021 | www.tlfresearch.com

tom@tlfpanel.com

HOW HARD CAN IT BE?

In the last issue of Customer Insight we said that to be of any value, a segmentation exercise must pass 3 tests: 1. Understand - Does it improve your understanding of customers’ needs and preferences? 2. Identify - Does it identify customers by segment? 3. Reach - Does it enable you to reach customers by segment with tailored messages? We also said that traditional demographic methods of segmentation are very unlikely to pass those tests for the large majority of businesses and whilst methods such as psychographic segmentation can be much better for understanding customers they struggle to pass tests 2 and 3. In recent years it has become more widely accepted that the method which stands the best chance of passing all 3 tests due to its real-world applicability is behavioural segmentation.

Behavioural segmentation Behavioral segmentation is the process of grouping customers according to their behaviour when interacting with a product or service. Simple behavioural segments frequency and size of spend, and many customer loyalty schemes were developed on this basis. A very successful example was the Tesco Clubcard as it passed all 3 segmentation tests. It enabled Tesco to understand a lot more things about customers such as what they bought, how often, what products they bought with other products or on what occasions and what offers they

www.tlfresearch.com | Autumn 2021 Customer Insight 25

HOW HARD CAN IT BE?

were most responsive to. The Clubcard

The first three personas represented the

the social media platforms most used by its

was perfect for passing the second test and

most fertile ground for interaction because

most engaged customers. This has resulted in

customers could be reached individually

of their deeper involvement with the brand.

more coverage on the Internet, through the

with tailored communications. In the early

Lego has extensive interaction with Lead

proliferation of LEGO pictures and customer-

years of Clubcard the regular mailshots

Users including co-creating products with

made viral videos, and social media feedback

with personalised offers were particularly

them. For Lead Users, the 1to1 Community

has also been used to generate ideas for new

successful.

and the Connected Community Lego has

products.

In more recent years more sophisticated

strengthened levels of engagement by

Olay

behavioural segmentation approaches have

developing online communities and social

focused on things like different product

networks. By actively engaging these

or service benefits or different levels

customers and giving them special attention,

of customer engagement.

Lego encourages them to be the company’s

benefit segmentation when creating its Skin

most ardent advocates. The personas also

Advisor. The artificial intelligence beauty

enabled Lego to concentrate its efforts on

tool collects data from customers by asking

Lego

American skincare brand Olay used

them five to seven quick questions about Lego is an excellent example of the

their skin. The advisor then reveals the true

latter. They identified 6 ‘personas’ based on

age of the customer’s skin and recommends

engagement levels as follows:

products accordingly. By asking the customer

1. Lead Users—people LEGO actively engages with on product design 2. 1to1 Community—people whose names and addresses they know 3. Connected Community—people who have

questions based around their skincare routine, and their preferences, Olay can collate data that can influence its product development, allowing the brand to bring out products that are most sought after and

bought LEGO and been to a LEGO shop or

most relevant to customers. For example,

park

through its Skin Advisor app, Olay understood

4. Active Households—people who have bought LEGO in the last 12 months 5. Covered Households—people who have bought LEGO once 6. All Households—those who have never bought LEGO.

that many of its consumers wanted fragrance free products, an idea not even considered by Olay’s development team. Olay now has a very successful range of fragrance free moisturisers and creams. The Skin Advisor also revealed that many customers were seeking Retinol based products, and the lack of such products in its range was contributing to the brand losing custom. In response, Olay released Retinol 24 which has gone on to be one of the brand’s best-selling products and helped to significantly increase their sales.

Nigel Hill Chairman TLF Research

26 Customer Insight Autumn 2021 | www.tlfresearch.com

WEBINARS ON DEMAND 40 of our webinars are available free and on demand at www.tlfresearch.com/webinars/#past-webinars Here are some of the most popular

THE PERFECT CUSTOMER EXPERIENCE Do your people understand how their decisions and behaviours impact the customer experience? Often we focus on getting the individual parts right, but it’s only when we get every element lined up that we can deliver truly memorable experiences. Using the right combination of event-driven research and predictive analytics you can give colleagues the data they need to see what makes the most difference to customers. By creating a blueprint for “the perfect customer experience” you’ll make it easy for them to improve customer journeys and get control of the customer experience.

FINDING & TELLING YOUR CUSTOMER INSIGHT STORY

USER STORIES & CUSTOMER JOURNEY MAPPING

Do you struggle to find the key pieces of customer insight from your research? We’ve all been there with really detailed presentations that provide a wealth of useful information, but the key takeaways can be lost.

This is one of our most popular training subjects and helps you understand how things look from your customers’ point of view. Mapping all the touchpoints of a specific customer journey is a must for designing positive experiences. We can’t give you an in-depth guide to customer journey mapping in 30 minutes, but we can give you an outline of best practice, what to focus on and common mistakes.

In this webinar we talk through techniques for finding the insight that really matters and how to share effectively this information to make a positive impact.

USING ONLINE COMMUNITIES FOR QUALITATIVE RESEARCH

TURNING INSIGHT INTO ACTION

Online customer research offers you a flexible approach to connect with your customers and online communities offer an engaging platform to undertake a range of qualitative research. Online communities can sometimes be more cost effective than focus groups and allow for a much deeper understanding, with participants given time to consider their responses and supply rich media to back up their responses. In this webinar we’ll discuss the uses of online communities, such as online focus groups, in-depth interviews or bulletin boards, and how these can help you dig deeper, have longer conversations, and visualise your customers.

There is no point doing customer research unless you’re planning to do something with the results. Action planning is the best way to ensure you are using the insight gained from your customer research to drive positive change to the customer experience. Greg will guide you through best practice when creating an action plan and show you some practical examples of how they can work.

NPS BEST PRACTICE

BENCHMARKING RESULTS, CAN IT BE DONE RELIABLY & HOW?

If you’re using Net Promoter Score (NPS) as your headline measure, this webinar is a must. NPS should be the starting point for customer insight, not the ultimate goal. We’ll be discussing a range of best practice and latest thinking around the metric, from how to ensure a robust measure and common mistakes, to gaining in-depth insight and practical hints and tips to help drive change.

We are all interested to see how our Customer Satisfaction or NPS scores compare to others, but how do we do it reliably and what do we want to get from benchmarking? Greg Roche talks through different approaches to benchmarking and how best to use this MI to drive action.

Watch online at tlfresearch.com/webinars/#past-webinars

G U E S T F E AT U R E

Decisions on Auto Pilot: System 1, customers and your business

Most of our thinking is automated, enabling us to make rapid fire decisions on the fly. But at what cost? In the second piece of our crash course in behavioural science, we dive into the how, what and why of decision making, exploring Dual Process Theory, system 1 error and simple responses within the customer journey. when you and your customers are thinking

the dimensions of the problem quickly

101: Influence, Nudging and Choice Architecture

fast or slow, the automatic nature of

spiral. It’s not just the number of factors

I discussed the importance of influence

cognitive errors and how to implement

involved, but their interactions. Problem

and a very high-level view of nudging in

simple responses into your business

types, external stimuli, probabilities, mental

the context of a customer journey. Now it’s

practices.

states, physiology, prior beliefs, and many

In my previous article, Behavioural Science

other elements, are each interwoven into

time to go deeper. To become an effective choice architect, you must understand the systems at work when we make decisions.

Behavioural and Decision Science – a little background

decision making. Attempting to understand the nuances

In this post, we begin by taking a high-level overview of behavioural science in general,

our conscious and subconscious processes of

On the face of it, decision making seems

of this mental soup and how it plays out

before getting stuck into Dual Process

like a difficult thing to get your head around.

on the micro level of choice, is to enter the

Theory, heuristic bias and system 1 error.

And when you really drill down into what

realm of mathematicians, psychologists,

By the end of this post, you’ll recognise

kind of a problem a decision or choice is,

and neuroscientists. Fortunately, practical

28 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

applications of modern psychological

serve as a basis for putting insights into

mode of thought requires mental effort and

research can be employed by anyone, with

practice, and a three-minute crash course in

is associated with the subjective experience

just a little knowledge of the fundamentals

behavioural science.

of agency – thinking thoughts! It’s responsible for all information recall tasks,

being enough to get started. The same cannot be said for previous models of choice. Classical theorists painted

The first principle: Dual Process Theory

no matter how trivial or complicated. This is the sort of thinking you do when trying to remember a phone number or

humans in a very dim light, their models of choice portraying ‘homo sapiens’ more like

The first thing to keep in mind, is that

picking the best deal for a mobile phone

decision making may be split between two

upgrade. It’s our default mode for difficult,

broad systems, each working in tandem

longer term decisions. But it also works to

perfectly rational, calculated, and self-

with the other – system 1 [fast/involuntary

rationalise certain decisions made by system

interested. These theories didn’t do very well

thinking] and system 2 [slow/deliberate

1, as we’ll see in the next post when we look

at explaining actual behaviour though and

thinking]1. There’s more nuance to how

at confirmation bias.

modelling interactions below the macro level

the mind works than just this single

was reliably ineffective.

interpretation: these two systems may

can be used as a practical framework for

‘homo economicus’. Characterising our decision making as

These two complimentary systems

contain a series of modular child systems,

understanding the way people approach

are more accurately described as ‘homo

and some have argued for a third system

problems. And when you begin to think

emotionalis’, acknowledging the growing

operating in the gaps between the two2 - but

about your own decisions in this way, it

evidence of our irrational biases, probabilistic

for our purposes, basic dual process theory

can become quite the rabbit hole. In fact,

patterns and emotive propensity towards

should serve as a good introductory basis.

it’s excruciatingly difficult to maintain an

Times have changed. Our thinking selves

awareness of these systems in everyday life,

error. The frontrunners of these changes were Nobel prize winner Daniel Kahneman, and

System 1 – Thinking Fast

work transformed our practical understanding

and this is why influencing strategies which take into account dual process theory are so

long-time colleague Amos Tversky, whose System 1 refers to fast, emotional,

effective.

of the mind. Together, they gave rise to the

intuitive, and automatic thinking. It’s what‘s

Because, whilst accurate most of the

multidisciplinary subject that’s popularly

working to constantly form the subconscious

time, our reliance on automatic processes

known as behavioural economics.

impressions, feelings, and associations,

does lead to a systemic tendency towards

that guide everything we do. It’s the vast

error. This is the second principle to keep in

majority of all thought, used to make

mind – through automaticity we are prone

quick, involuntary decisions and complete

to error. And it’s through exploitation of this

habituated actions: from tying shoelaces,

error, that we are then vulnerable to external

when trying to understand how the brain

to pulling away from a fire or avoiding an

influence.

works. But understanding every modern

accident on the motorway.

Getting started There’s a lot to get to grips with

advancement in cognitive neuroscience isn’t

It’s also ballistic - once we start a system

necessary to develop a toolkit for nudging!

1 action we can rarely stop. It’s the hero that

For now, let’s swerve the realm of higher

gets us through our day to day, but system

academics and keep only two basic principles

1’s speed can also cause us problems.

in mind. First that people seem to use two different and complimentary systems for

the uninitiated, these two principles should

Because 90% of what we do is automatic, we sometimes make errors. And these errors

System 2 – Thinking Slow

decision making, and second, that these systems are prone to habitual error. For

The second principle: Automaticity leads to error

may come about in many ways. For system 1, many of these errors come from what

System 2 is the slower, more analytical, and reasonable sibling of system 1. This

Kahneman, calls WYSIATI – “what you see is all there is”…

¹Kahneman, D. (2011). Thinking, fast and slow. Farrar, Straus and Giroux. ²Carey S. The Origins of Concepts. Oxford: Oxford University Press; 2009.

www.tlfresearch.com | Autumn 2021 Customer Insight 29

G U E S T F E AT U R E

and is more prolific than you might expect.

The correct answer might not be what

very quickly, but only constructs a narrative

And whilst it’s tempting to think that only

you expect. Using some conscious effort and

or decision structure based on what is

our super-fast system 1 would be prone to

working back from 48 days, tells us that

in front of us in that very moment. This

this, that’s not the case, as we’ll see in the

the lily patch will take 47 days to cover half

story is constructed from what we feel and

next post on type 2 errors.

the pond. And yet many of us will fail this

System 1 thinking processes information

perceive in the present, informed by our pre-

To get an idea for how bias works, we’ll

existing biases and prior experiences. This

go through a couple of examples, before

representation can be incredibly accurate

moving into some commercial applications.

become automated!

System 1 error: WYSIATI & Heuristics

Consider a Formula 1 driver hurtling along a racetrack. The driver carries out a multitude of complex decisions concurrently,

first try - myself included! If you find yourself mistaken in either problem, don’t fret. In a study by Tay et

and reliable – since through skill acquisition and learning, complex system 2 thinking can

exercise, mistakenly answering 24 on the

al4, of 128 2nd, 3rd and 4th year medical students, around half incorrectly relied on system 1 and made system 1 errors, across a

Think about the following problem and try to think of the answer as quickly as you can:

small battery of cognitive reasoning tasks, which included the lily pad question. Their

with the accuracy of each decision critically

analysis aimed to highlight the importance

important, not only to the race, but their

of system 1 decision making in life and death

survival! The consistent precision of this kind of decision making is amazing! But what’s more incredible is that many of the driver’s decisions have become automated

“If it takes 10 whales 10 hours to eat 10 tonnes of Krill, how long will it take 100 whales to eat 100 tonnes of Krill?”

over time, their imbedded expertise the product of years of experience and practice.

error when unprepared. Through practice and experience, we imbed expertise, and this imbedded expertise helps physicians rely on system 1 to make life and death decisions accurately on the fly. But their findings also

The automation of decision making is made possible by mental shortcuts used to

medical situations, and our vulnerability to

show us the importance of staying grounded The answer may surprise you. You might

in the face of new problems, especially those

speed up information processing. For most

think the answer is 100 hours. But it’s

that may seem as simple as the lily pad

tasks in our day-to-day lives they may be

actually 10, and if you read this again, you’ll

task…

reliable but as complication of these tasks

spot the schoolboy error! This is an example

increases, so too does the likelihood of

of system 1 thinking and WYSIATI, leading

inaccuracy and error.

to error. Your brain perceives a pattern, and

WYSIATI, System 1 and the customer journey

naturally inserts in what seems to be the

Heuristic Bias

appropriate number. If the problem had been

Commercial exploitation of WYSIATI

more complicated, there’s a good chance

and system 1 bias has existed for a very

system 2 would have got involved to solve

long time, long before the revelations of

heuristics. They are simple, automatic

the problem, but no such luck for most

dual process theory. Take the simple act

strategies or mental processes, that people

people! But they can be even trickier than

of buying a tin of beans – there’s a good

use to quickly form judgments, make

this...

reason so many alternative brands will use a

Behavioural scientists call these shortcuts

decisions, and find solutions to complex problems. Natural results of heuristics

Let’s try one that’s a little more complicated:

acknowledgment of these biases has led marketers, behavioural scientists, and policy makers to begin incorporating intentional and behavioural design into their work. In doing so, choice architects exploit our natural tendencies to appeal to simple, habitual bias.

to market their products. As one scans the tins aisle, we are drawn to what we know.

are bias, which is a cause of error in any system based on generalisation. The growing

Heinz-like colour scheme, font and imagery

“CRT question 3: There’s a lily patch in a local pond. Each day the lily patch doubles in size. If it takes 48 days for the lily patch to cover the entire pond, how long will it take to cover half?”3

This influence may be positive or negative

Since what you see is all there is, people will often make a ‘simple’ choice and just pick a tin that looks familiar. The use of WYSIATI goes a lot further than selling copycat baked beans though! And utilising simple choices is an effective way to encourage a customer along a given route within a customer journey. We utilise keywords, structure, and

Tay, S. W., Ryan, P., & Ryan, C. A. (2016). Systems 1 and 2 thinking processes and cognitive reflection testing in medical students. Canadian medical education journal, 7(2), e97–e103. 4 Tay, S. W., Ryan, P., & Ryan, C. A. (2016). Systems 1 and 2 thinking processes and cognitive reflection testing in medical students. Canadian medical education journal, 7(2), e97–e103. 3

30 Customer Insight Autumn 2021 | www.tlfresearch.com

G U E S T F E AT U R E

primes to help our users make simple

to complex issues – though something

choices, which is an effective way to reduce

that happens a lot online through clever

friction. And there will be decision points in

UI design, particularly with regard to

your customer journey where you will have

permissions and privacy. Used properly,

the opportunity to influence the customer to

eliciting simple responses can remove the

give simple, system 1 responses.

friction from complex journeys, providing

What’s key is understanding both the context of the decision and your control over

business.

ContactEngine

But modern-day problems require modern-day reasoning and carefully

Errors, errors everywhere…

evaluated solutions. Unfortunately for us, this means our lazy

complicate the decision? And how complex is the choice to begin with? This context is

Implementation Analyst,

tangible benefits to both customers and the

this context – what can a customer see? Does the information you provide ease or

Albert Evans

That we frequently make system 1 errors

brains don’t always automatically engage

within your control, and through careful

and rely on heuristic bias is clear. But why

system 2 when you’d expect that they should,

design of these factors, you can trigger

do we appeal to them so consistently? The

and as we’ve shown, we rely on our first

a type 1 response, when the scope of the

answer is complicated… Evidently, part

impressions – “What You See

problem is small enough to warrant it.

of the problem is lethargy, and another

Type 1 responses in Appointment Booking

Is All There Is!” But understanding system

significant part is wiring: our system 2

1 error is only half of a deeper and less

capabilities are intensely lazy, and as alluded

predictable story…

to, thinking is a cognitively expensive process; we only do it when we have to!

In the next post, we’ll explore the practical ramifications of system 2 errors, including

At the same time, this is just the way

strategies for dealing with cognitive load,

example of a customer journey in which

that we’re wired. Pre-historic man evolved

confirmation bias and mental accounting.

ContactEngine utilises system 1 responses.

in a world where probabilistic, type 1

For example, we elicit simple responses by

decision making was fast

offering one specific date rather than many

and accurate enough

and prompt a response through keywords

to prevent an

to increase response and success rates. By

untimely

offering a single date rather than several, we

demise.

Appointment booking is an excellent

draw the scope of the decision in, reducing friction and making the choice much easier to make. By framing the conversation by way of keywords, we leverage the user’s technology - which suggests these keywords words to the user as a possible reply. All the while, we leave room for complex responses if there’s a problem. Through our conversational AI, we can handle responses where the date offered is unacceptable. But by offering a single date over many as a first option, and prompting a simple response, we greatly reduce the complexity of the decision. The line between system 1 and 2 is a little blurred here, but the goal is to drive a rapid, intuitive response. The less the customer has to think about the decision and the more automatic the choice, the greater the likelihood of a simple, system 1 response. This is an example of minimising cognitive load, which in excess causes a type of system 2 error we will explore in the next post. It’s important to note, that it’s unscrupulous to aid type 1 responses

www.tlfresearch.com | Autumn 2021 Customer Insight 31

Consumer Insight The data for the Sentiment Index article came from TLF’s panel. The TLF Panel offers you an easy way to access the views and opinions of UK consumers. It’s a flexible research solution with a range of uses, including: Insight into consumer behaviour, attitudes and usage Facts and figures for compelling content and PR stories Brand awareness and competitor surveys Testing advertising and product concepts Recruitment for focus groups and interviews

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BOOK REVIEW

decisions which were made while it was

authors speculate that China will likely soon

If you’re like me you probably have a

developed, and that’s true of Bitcoin and

test a tokenized currency in Africa, and then

vague sense that it’s something to do with

other cryptocurrencies. As the authors

launch it in China with the aim of making it

Bitcoin, and that it’s a distributed way of

point out, those design decisions lead

the dominant cryptocurrency.

authenticating information without the need

you to different conclusions about Bitcoin

to trust any particular authority, but you’re

depending on whether you see it as a

probably a bit vague about the details of how

currency (which it does very badly), a way

it works or why that might be important.

of making payments (which it does well for

What do you know about Blockchain?

I read this book to find out more, and

high value payments you’re prepared to wait

Diminishing returns & centralisation Mining Bitcoin might seem like a great

I have to say it was exactly what I was

a long time for), or as an investment (where

way to earn free money, but the power

looking for. Rather than coming from a

it may have huge potential as a potential

required now puts it beyond the reach of

place either of total scepticism or unthinking

alternative to gold).

ordinary people. The “pickaxe” theory

enthusiasm, the authors do a great job of explaining these technologies in nontechnical terms and outlining what they have to offer.

Cryptocurrencies Any product has strengths and weaknesses which result from the design

equates this to the gold rush, arguing

“…the thing that makes currencies good is stability, while the thing that makes investments good is growth.”

that there’s little profit to be made by participating in the craze, but lots to be made by selling equipment to those that do. Because the full blockchain is now too big for most people to store, we’re becoming reliant on the few who do, defeating one of the core aims of Bitcoin. On top of that the software is owned and maintained by a small group of people who are employed by a single company. Mining pools are increasingly

Stephen Hampshire

Bitcoin is unlikely to become a meaningful

consolidating power, raising the spectre of a

Client Manager

currency, but other cryptocurrencies might if

possible “51% attack” (basically, if you can

TLF Research

they’re designed in ways which suit the needs

mine blocks quickly enough you can rewrite

of states. Whether or not that’s a good thing

history). Already, Chinese pools mine 88% of

for the rest of us is a different question. The

the world’s bitcoins.

stephenhampshire@leadershipfactor.com

www.tlfresearch.com | Autumn 2021 Customer Insight 33

BOOK REVIEW

“A powerful central government and a handful of big companies could control the future of Bitcoin. This is not the world that Satoshi envisioned.”

Reasons to use a private blockchain More generally, blockchains can be used outside of cryptocurrencies, and many organisations are deploying their own. Does that mean you should jump on the bandwagon and start putting blockchains throughout your business? Probably not. Blockchains, like any technology, are only good for situations that play to their strengths: • Decentralised • Trustless • Transparent • Tamper-proof It doesn’t make any sense to put your

Beyond a record of transactions

customer database onto a blockchain, but it

A paradoxical success

might be a good idea for your supply chain, Blockchains can do more than simply

especially in markets (like food) where it’s

In the end, the success of

store a secure record of transactions. They

important to be able to trace very accurately

cryptocurrencies may hinge on them

can run code, store data, and really do pretty

where product has come from.

abandoning their original philosophical goals:

much any kind of computation. Ethereum is a cryptocurrency built on the idea that this kind of mechanism is useful. One potential use for this is so-called “smart contracts” which can be set up to automatically perform certain actions (such as paying out) when particular conditions are met, but smart contracts have been criticised as being neither smart nor contracts.

“Anything that you can conceive of as a supply chain, blockchain can vastly improve its efficiency — it doesn’t matter if it’s people, numbers, data, money.” Ginni Rometty, CEO of IBM

The efficiency gains possible are real, but in practice implementing a private blockchain can be very difficult, not so much for technical reasons as for social ones.

“The technology designed to upend the monetary system and cut out banks and governments is being integrated with the monetary system, adopted by banks, and regulated by governments.” Perhaps the most exciting thing about blockchains is their potential to revolutionise the mundane but important business of supply chain optimisation. That may not be a revolution, but it’s not quite a bubble either.

“…crypto…will change the world, not through anarchy…but through sheer efficiency.” 34 Customer Insight Autumn 2021 | www.tlfresearch.com

Customer Insight Magazine is created and published in house by TLF Research. The magazine is our way of sharing features and latest thinking on creating an outstanding customer experience. We hope you enjoy reading the magazine as much as we enjoy creating it. If you’ve got an interesting customer experience story to tell and would like to feature in the magazine, we’d love to hear from you. Please contact our editor Stephen Hampshire for more information.

Email Stephen at stephenhampshire@leadershipfactor.com or give him a call on 01484 467014

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Customer Insight Autumn 2021

Articles inside

Adapting to Demand

Writing a One Page Summary