Listen Up!

Listen. (No, listen carefully.) Did you hear that? It's the sound of your customers trying to help you do a better job for them -- and, in the process, to help you build a more successful company for yourself.

We are living, once and for all, in the Age of the Customer. Did you hear what we said? There has never been a better time to be a customer -- or a tougher time to be a supplier. Customers have higher expectations and more choices than ever. Which means that you have to listen more closely than ever. Forget building a learning organization. You first have to build a listening organization -- a company whose people have their ears to the ground.

We can hear your reaction already: Of course we listen to our customers! We spend millions of dollars a year on market research and focus groups. Sorry, that's not enough. Most focus groups are tone-deaf. Here's what Jerome Conlon, 43, a former marketing guru at Nike and Starbucks, has to say: "Unskilled moderators tend to phrase questions so that customers say what they think the moderator wants to hear. Customers don't like revealing that they're unsure. Most focus groups aren't conducted in a way that lets companies listen to their customers' aspirations. Instead, they go for the jugular about whether a product is good or bad. That's why focus groups cannot be the only tool for learning about what customers want."

Or listen to David Schriber. "We hate focus groups," declares Schriber, 35, VP of marketing at Burton Snowboards. "One or two people always influence the rest of the room. Kids who are independent -- our primary demographic -- wouldn't participate in formal discussions. And 'exit interviews' are no good. Snowboarders are the first ones on the mountain in the morning and the last ones off at night. Does your clipboard-toting pollster have that kind of stamina?"

So what's the alternative? Well, companies that are serious about listening to customers are tapping the immediacy of the Web to listen more carefully and more frequently to more and more of their customers. Philip Letts, 34, chairman and CEO of beenz.com Inc., has created a virtual Web currency to help companies track how their customers use their sites, and hundreds of other sites as well.

Or better yet, how about a night of clubbing with a sample of your future customer base? Senior managers at Ford's European operations knew market statistics and demographic projections by heart: The next significant customer segment for automobiles will be brand-conscious teens -- the so-called echo boomers. Ford's management team, however, didn't know about its future customers' lifestyles and priorities. So the team decided to observe some of those customers -- on their terms and on their turf. A group of Ford engineers and marketers began by hanging out at a hair salon in London that also hosts experimental techno-pop. There, the teens chatted about what was important to them (time and personal space more than money), and then they all partied at some of London's hottest clubs.

"It was a deliberate shock tactic, getting inside the heads of echo boomers," says Andrew Grant, 27, Ford's European and consumer-marketing-insights manager. "Suddenly, our customers were no longer statistics on a page or a clever write-up by an ad agency. They were flesh and blood -- and standing right in front of us."

When the managers and the kids started connecting, the real listening began. With the help of computer-aided tools and a group of young designers at Ford, the partyers became vehicle developers. "We got a feel for their lifestyle and for what was important to them," says Grant. "We incorporated those insights into some designs and asked, 'Would you want a vehicle like this?' "

The kids would then suggest a line here or there and, with the designers, came up with a sketch of a car that's simple and relatively inexpensive to buy. Such listening experiments have been so successful that thousands of Ford employees in North America will be getting a one-day crash course in how to communicate with consumers, whether at a dance club or in a grocery store.

What follows, then, is Fast Company's crank-up-the-volume guide to listening to customers. Effective listening may not always require techno-pop, but it does require principles that keep your ears to the ground. For one thing, it's important to recognize that where you listen is as important as how you listen. For another, whom you listen to is as important as where you listen. Listening works best when you give customers something to talk about. But, in the final analysis, companies don't listen -- people do. So if you believe that listening to customers is one of your organization's most critical jobs, then good listening becomes a critical skill for everyone.