Understanding the Right Customer

October 2013

Jay Ford, Ph.D.

Executives at Procter and Gamble learned some powerful lessons when seeking to expand their customer base to India. Their experiences highlight the importance of two  NIATx principles: understanding the customer and getting ideas from outside the field. The P&G story highlights the importance of understanding the right customer.

In 2008, executives at Gillette, which is now a division of Proctor and Gamble, wanted to increase its market share in India among men who shave. The prior introduction of a new shaving product in 2002 initially failed. At that time, they introduced a new razor with a bar to unclog hairs that collect in the razor. Market testing among Indian students at the Massachusetts Institute of Technology indicated that the new product was a big improvement. However, the introduction into the market was a complete failure. Why? The answer was simple:  the lack of running water.  Most men in India shave with a cup of water, which rendered the new razor useless. Alberto Carvalho, Vice-President of Global Gillette called it an “Another ‘aha’ moment’." Simply stated, they had not taken the time to understand the needs of the right customer.

So in 2008, Gillette was ready. They sent 20 staff to India. Once there, they conducted “walk-throughs” with their customers, spending over 3,000 hours watching men shave under many different circumstances and situations. They also conducted focus groups, another powerful tool to help understand the customer. Armed with this knowledge, they were able to develop and introduce new products in the market. Efforts to understand the needs of the right customer have resulted in an 11.8% increase in market share. To learn more about Gillette’s story, I encourage you to read the recently published article about their experience.

The implementation of the Affordable Care Act will change the market place for behavioral healthcare organizations. Through Health Information Exchanges, many more people with new  access to behavioral health care will will be seeking services. These people will become your new customers. The Gillette story highlights the importance of understanding their needs. 

Applying the first NIATx principle: Understand and Involve the Customer takes on a new meaning now. A walk-through conducted now should focus on understanding the needs of the right customer. Several California providers recently told me about how the new Health Information Exchanges present opportunities for them to provide care for different populations. As a result, they are taking steps to understand customer needs to show them--as well as new payers--that their services result in quality outcomes.

The choice is yours. You can repeat Gillette’s failed experience of 2002 or you can follow the approach they took in 2008 to clearly understand the needs of the right customer. What approach will you chose? 

What new customers will your organization be serving in the near future?  How will you know that you're  providing quality services for the right customers? Share your thoughts with the ATTC/NIATx Service Improvement Blog!

 Jay Ford, PhD, FHIMSS, FACHE
Assistant Scientist
Center for Health Enhancement Systems Studies/NIATx 

University of Wisconsin-Madison
fordii@cae.wisc.edu