What Customers Can’t Tell Us

Three steps to discovering new ideas

The secret to staying ahead of our customers is learning to discover what they want, even when they haven’t envisioned it yet. Like imagining an iPod in the days of the Sony Walkman.

State Farm has recently designed a pilot experiment called “Next Door” that is designed to do exactly that: Next Door attempts to offer a new generation of customers an insurance brand they can relate to. Their approach demonstrates the three basic steps for discovering new ideas that will strengthen our brands and build customer loyalty.

1. Start with a hunch.
State Farm noticed something very troubling a few years ago. Younger prospective customers, “Millennials”, weren’t acting like younger versions of their parents. Causes and effects that had been linked decades earlier weren’t working the same way they used to—for instance, having a baby no longer automatically led to buying insurance. Millennials didn’t sign up with agents the way their parents had. State Farm saw the trend and realized that their future depended on their ability to figure out what young professionals want from an insurance company.

2. Walk a mile in your customers’ shoes.
The State Farm team heard early rumblings in informal conversations that the Millennial customers had a hard time relating to all of the traditional financial services brands, from banks to insurance brokers to financial planners. According to Brett Myers with State Farm, a team of researchers followed dozens of customers around for days, from bank to brokerage firm to agency, to discover what it would take for a financial services firm to resonate with younger consumers. This is what they heard:

That couch in the bank lobby—it’s not for me.

I don’t want a hard sell every time I ask for information.

I’m stressed about my student loans, but I don’t think they can relate to my situation.

I wonder what other people my age are doing about insurance.

State Farm was onto something: discomfort with traditional approaches and traditional brick and mortar settings + huge desire for information – sales pitch + peer coaching = huge opportunity

3. Imagine what might be.
The research team learned that in addition to the existing live and online options for financial services, Millennials want a live place to gather for information immersion, informal coaching, and impromptu seminars.

And voilà—State Farm’s Next Door was born—an experimental design (currently being tested in Chicago) for a novel, neighborhood hangout that allows people to experience their brand without sales pressure. Next Door offers a place where people share financial information, hold informal coaching sessions, and experience a whole new relationship with an insurance company. It’s branded as State Farm, but insurance is not sold there.

State Farm saw the signs of a risky future and designed a counter-intuitive concept to fix it that is based on research and walking in the shoes of their customers. Just at the time when many companies have abandoned their brick and mortar locations, Next Door represents a new place for Millennials to warm up to the State Farm brand.

Customers couldn’t tell State Farm what to do, but they did give State Farm signs and signals for what to try next.

What hunch do you have today about your customers’ changing needs? If you walk a mile in your customers’ shoes today, how could you change your company’s future?