Customer UnderstandingAugust 20264 min read

You can have all the data in the world and still misread what customers value

There is a version of research that is more useful to the researcher than it is to the client. Useful research answers a decision. Other research answers a question. Those two sound close, and they are not the same. Most organisations still commission the second. And then wonder why three years of research on the same subject has produced the same answers each time.

Clients ask questions data cannot answer well, and then find themselves acting on the closest available approximation. Behavioural systems are very good at telling you what customers do. They are much less good at telling you what customers value whilst doing it. And in the gap between the two, three specific confusions creep in.

The first confusion. Engagement for value.

A customer opens the app every day. That must mean they value it. It might. Or it might mean they are worried about something, or constantly checking for a problem they cannot get resolved and would leave you tomorrow if they had the energy or the switching cost were lower.

I have watched the same behavioural signal be read as advocacy in one meeting and as resignation in another. A brand that cannot tell the two apart will read its data optimistically for years before the retention numbers force a rethink.

The second confusion. Satisfaction for loyalty.

A lot of CX programmes are structured to maximise satisfaction. But satisfaction is a low bar. It measures the absence of a bad experience, not the presence of a good one.

Customers who are satisfied but not connected are at risk the moment a competitor wins on price, or functionality. Customers who are actively loyal will forgive a rate hike, a service outage, and a redesigned app they hate on first sight. These two groups can look awfully similar in a satisfaction study, but they behave completely differently at the moment of a switching decision.

Which is why we talk to clients about intentional loyalty, distinct from satisfaction. Intentional loyalty is the customer who has weighed you against alternatives and chosen you again. It is what most organisations think they are measuring when they measure retention.

The third confusion. Personalisation for understanding.

This is being amplified rather than fixed by the AI takeover. A brand thinks it understands its customers because it can address them by name, remember their preferences, and serve them the right product at the right time. That is targeted execution.

Understanding is knowing why a customer values what they value. Which of the different sources of value they weight highest. Where the trade-offs sit. What would change their view of the brand if it did a better job of what they care about most.

This is where our 7 Sources of Customer Value framework earns its place.

It was built off the back of decades of work and is rooted in one killer thought: the more customers buy into your brand, the more likely they are to buy (and keep buying) it.

It also makes the three confusions I'm talking about here visible before they turn into commercial exposure. It does that by framing the questions in a more customer-focused way, rather than by generating more data.

Every one of the three confusions above maps to a specific source:

Engagement-for-value confuses Engagement with Utility
Satisfaction-for-loyalty confuses Experience with Brand Fit
Personalisation-for-understanding confuses Utility with Engagement

Naming the confusion is the first step. Refining the focus and reallocating the investment is the second.

What to do about it: three steps that shift things quickly

First, name the decision you are actually trying to make, not the question you have been circling. Decisions are commercial. Questions are exploratory. Insight investment scales differently against the two.

Second, look at your data with the 7 Sources of Value in mind. What are you measuring, and which of the seven sources does it tell you about? Most organisations discover they are measuring three sources heavily, one lightly, and three not at all.

Third, close the gap where it matters. You cannot fix everything at once. You probably do not need to. You need to know which sources are load-bearing for your category and your customer, and invest against those.

A long career in this business has taught me that the confusion between satisfaction, loyalty and love is where most retention strategies quietly leak. Getting clear about the difference is where the leaks close.

For our clients in financial services, travel, retail, telecoms and beyond, we are working through the implications of what our model reveals with sector-specific examples this autumn. If the issues I'm talking about here sound familiar in your organisation, let's have a conversation.