Why customers behave the way they do

Businesses can no longer afford not to analyse customer behaviour. Chris Pescott, CEO of customer intelligence agency Perceptive, explains how to do it properly to NZBusiness editor Glenn Baker.

It’s fair to say Chris Pescott is ambitious. He ‘eats, sleeps and breathes’ consumer behaviour and market intelligence. 

At Massey University he achieved a masters in statistics and stakeholder research and in January 2005 launched Perceptive from a desk at the university’s Albany e-Centre business incubator. 

The first 12 months was spent marrying practice with theory and identifying where the real market opportunity lay. Talking to business owners revealed the lack of information on customer needs and a yawning gap in available customer/market research. There was also a poor understanding of how businesses can improve connections and relationships with customers to serve them better.

“We quickly realised that if we could deliver that insight and intelligence to help businesses deliver better customer experiences then we would be an enabler for growth,” he recalls. “That’s definitely what Perceptive’s all about today.”

Chris’s e-Centre days ended in 2008 and he has outgrown his office three times since then.

Today, still on the North Shore, the business has 50 staff.

As Chris explains, Perceptive eliminated the words ‘static’ and ‘boring’ from New Zealand’s market research sector. “We brought a more engaging and visual approach; we developed and leveraged new technologies which produced research faster and more cost effectively.

“We introduced graphic designers to do a better job of presenting our research; we told better stories and consulted with clients on how to execute findings.

“We quickly realised our point of difference is to help clients get results from research – not just deliver the research. We also realised that research reports are only a promise of value. To get the value from them you must physically go and do something.”

Unless Perceptive helped clients extract value from reports, drive change and new products, change pricing and the way they service customers, they were only doing half the job, he says. 

“It’s like giving someone the Ferrari but not handing over the keys. There has to be a consultative approach.

“Today, Perceptive is all about helping businesses get smarter in order to unlock profitable growth. We utilise intelligence to make businesses better.”

Times have certainly changed in this digital age.

“Today’s business owners are surprised to learn how educated and sophisticated their customers are and how accessible information is. They can find out so much about your business, your brand, your services – and not just from you, but from your competitors and your customers themselves.” 

They can know enough to decide whether they want to do business with you before they even make contact, Chris says.

Third party endorsement and word of mouth [recommendations] have become easy through social media. “It’s almost like those walls around your business are made of glass.

“Customers can see right through flawed marketing, and whether you really do what you say you do – before they pick up the phone, before they hit your website, before they do anything.”

Look who’s listening

It’s fair to say Perceptive generates a mountain of information for its clients, all the while staying anonymous. Chris informs me they generate around half a million surveys per month, all to improve business outcomes and customer experiences. 

An example might be a follow up survey to an insurance claim. It’s important to capture feedback early, because a bad experience is quickly relayed to other people.

With social media everyone’s listening, says Chris. He knows of one particular ‘bad experience’ tweet that was retweeted 17 thousand times. Surveys have been known to capture employee fraud, as well as abuse, harassment, false promises, ridiculous delays and a lack of courtesy.

“If you don’t know it’s going on, then you can’t do anything about it.”

Improving customer experiences is now vital, Chris adds, because loyalty is becoming harder to achieve. “Even satisfied customers can leave you, because there’s just so much choice.

“You’ve got to ‘wow’ them, listen to them, be more relevant and exceed their expectations.”

It’s vital that businesses learn what their customers are interested in. “Generic marketing is working less nowadays. It’s a case of speaking to the right person at the right time with the right message,” says Chris. 

With consumers exposed to around 5000 ad messages per day – relevance is the ultimate filter.

Let’s talk

If the generic, ‘wallpaper” marketing approach is dead – what is the answer?

Chris says it’s now about providing interesting information in return for some form of engagement. In other words…get the customer to talk to you about themselves. 

When you have that information then you have something in common to build a relationship on. And all that can be done digitally – an example might be a building form that provides an online ‘design tips’ magazine. When people download the magazine, their details are automatically captured, and with subsequent magazines, a profile is slowly built up.

“It’s like researching customers while marketing to them; you nurture people until they’re ready to buy. That’s extremely effective, not just in improving sales conversion, but also profitability.”

As for the e-commerce marketplace, Chris believes it can be summed up in one word: Amazon. 

“It will play a massive role in New Zealand, based on its plethora of data and knowledge on customers,” he says. “It’s very intimidating. Fifty-five percent of product searches now in the US happen on Amazon and it has overtaken Google in product searches. It’s an absolute threat to retail.”

His advice is to work with the Amazon e-commerce model – not against it. “If you’re a ‘bricks and mortar’ store, work on a ‘wow experience’ to bring people into your shop. It’s not just about the goods, provide something extra that customers won’t forget, an experience they will talk about.

“Understand what customers like and provide that to them in spades, in an intimate experience-based environment.”

What’s next?

Looking ahead, Chris says Perceptive will continue to help clients embed technology into their business and become more customer-centric, as well as help marketers stay ahead of the game.

Perceptive was acquired by Clemenger Group in 2017, with Chris retained as CEO. 

The 36-year-old Ernst & Young Entrepreneur of the Year finalist has achieved his dream of building a substantial professional services firm and exiting in his thirties for an eight-figure sum. Clemenger is part of BBDO which, in turn, is part of global marketing and corporate communications holding company Omnicom Group, listed on the NYSE.

Transitioning to the larger organisation has been a breeze for Chris – he admits to “loving” his new role and the autonomy that comes with it. He’s also excited about having time to mentor and inspire other young business entrepreneurs.

His goal for Perceptive is to deliver more value to the Clemenger Group – “to blend insights and intelligence with great creativity”. 

“They were in advertising and communication, we were in research and strategy; today the two disciplines must work closer together to give clients the best outcome.”