Is Your Organization Listening to Customers? – Asrar Qureshi’s Blog Post #1268

Is Your Organization Listening to Customers? – Asrar Qureshi’s Blog Post #1268

Dear Colleagues! This is Asrar Qureshi’s Blog Post #1268 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to pharmaveterans2017@gmail.com  for publishing your contributions here.

Credit: Gustavo Fring

Preamble

This blog post is based on an INSEAD article. Link at the end.

What Happens When You Actually Listen to Customers?

In boardrooms around the world, companies routinely proclaim that they are “customer-centric.” They conduct surveys, they measure satisfaction scores, they track complaints, and they monitor social media conversations.

Yet a critical question remains: Do they actually listen? Not listen in the sense of collecting data. Not listen in the sense of producing reports. But listen in a way that leads to action.

According to recent research highlighted by INSEAD, the answer to this question may determine whether a business merely survives or truly thrives. The study found that businesses that systematically sought customer feedback and acted upon it experienced remarkable improvements in revenue and profitability. More importantly, the benefits extended beyond the customers who were surveyed. They improved the experience for all customers.

This finding reveals an important lesson for leaders. The greatest value of customer feedback lies not in making customers feel heard. It lies in helping organizations learn what they do not know.

The Listening Gap

Most organizations believe they understand their customers. After all, they have years of experience. They analyze sales data, they monitor market trends, and they engage with customers daily. Yet there is often a significant gap between what organizations think customers want and what customers actually experience.

This gap exists because success can create blindness. When products sell and revenues grow, organizations begin to assume that their existing understanding is sufficient. Processes become routine, assumptions become fixed, and internal conversations become more influential than external voices.

Gradually, organizations start listening more to themselves than to their customers. The result is predictable. Small frustrations go unnoticed, customer expectations evolve unnoticed, and opportunities for improvement remain hidden. The danger is not ignorance; the danger is believing you already know enough.

The Surprising Power of Asking

One of the most interesting findings from the INSEAD research was that simply asking customers for feedback creates value. Customers who were invited to share their opinions remembered the business more clearly and spent more than customers who were never asked. Researchers described this as the “solicitation effect.”

Why does this happen? Because asking communicates respect. Customers want products and services, but they also want recognition.

When an organization asks, what did you think, what could we improve, and how was your experience. It sends a powerful message: “Your opinion matters.”

Human beings naturally respond positively when they feel valued. This principle applies equally to customers, employees, and stakeholders. People support organizations that make them feel important. 

However, while this effect is valuable, it is not the most important lesson. The real breakthrough comes from what organizations do next. Listening Is Not the Goal; learning Is.

Many companies mistake feedback collection for customer centricity. They send surveys, they gather ratings, and they produce dashboards. Then nothing changes. Customers quickly recognize this pattern. They become less willing to participate because they see no evidence that their input matters.

The INSEAD research suggests that the real value of customer feedback comes from learning and acting. Businesses that used feedback to modify products, services, delivery methods, opening hours, or customer experiences achieved substantial gains in performance.

This is what researchers called the “learning effect.” The learning effect proved even more significant than the solicitation effect. The reason is simple. When a business improves based on customer insights, better experiences become available to everyone, existing customers become more satisfied, new customers are attracted, and operational weaknesses are corrected. The entire organization benefits.

Listening without learning creates reports; listening with learning creates growth.

The Myth of More Data

Modern organizations often suffer from data obsession. The instinct is always to gather more information, survey more customers, build larger databases, and create more sophisticated analytics. 

But the INSEAD findings reveal something surprising. Businesses that surveyed 70 percent of customers did not significantly outperform businesses that surveyed only 30 percent. Both groups achieved strong results compared with firms that lacked feedback systems.

This challenges a common assumption. More data does not automatically create more insight. At some point, additional information produces diminishing returns. The real issue is not quantity; it is quality. A smaller sample of thoughtful feedback can often reveal the same problems as a much larger survey effort. Organizations should focus less on collecting everything and more on understanding what truly matters.

The Humility Advantage

Customer listening requires a quality often missing from successful organizations: humility. Humility means accepting that customers may understand aspects of your business better than you do.

They experience your service processes, your product limitations, your communication gaps, and your delivery failures. Every day, they see things that executives may never see.

INSEAD has long emphasized the importance of an outside-in perspective, where customer value creation becomes the central source of strategic insight. Organizations that focus excessively on internal capabilities risk becoming disconnected from market realities.

Why Established Organizations Need Feedback Most

Many leaders assume customer feedback is most valuable for startups. The opposite may be truer. Young businesses are naturally attentive because survival depends on understanding customers, while established organizations face greater danger.

Success can create complacency. Long-established firms often rely on historical assumptions, legacy processes, and internal expertise. The INSEAD study involved businesses that had been operating for roughly a decade, yet they still achieved substantial gains from systematic customer feedback.

This suggests an uncomfortable reality: Most organizations understand their customers less well than they think they do. Experience does not eliminate blind spots, sometimes it creates them.

From Feedback to Competitive Advantage

Customer feedback should not be viewed as a customer-service tool; it is a strategic asset.

It reveals emerging needs, operational weaknesses, market opportunities, and innovation possibilities. Organizations that learn faster gain an advantage. Organizations that ignore feedback become vulnerable.

The marketplace continuously changes. Customer expectations continuously evolve. The companies that thrive are not necessarily those with the best products today. They are often those with the strongest learning systems.

Sum Up

The most important lesson from the INSEAD research is remarkably simple: Customers are not merely sources of revenue; they are sources of insight.

When organizations ask customers for feedback and genuinely act on what they learn, remarkable things happen. Revenue increases, profitability improves, customer loyalty strengthens, and operations improve.

But perhaps the greatest benefit is cultural. Organizations become more curious, more adaptive, humbler, and more responsive. In a world defined by constant change, these qualities become powerful competitive advantages.

Many organizations claim to be customer-focused; far fewer are customer-led. The difference lies in what happens after the question is asked. Because in the end, collecting customer feedback is easy, acting on it is leadership.

Concluded.

Disclaimers: Pictures in these blogs are taken from free resources at Pexels, Pixabay, Unsplash, and Google. Credit is given where available. If a copyright claim is lodged, we shall remove the picture with appropriate regrets.

For most blogs, I research from several sources which are open to public. Their links are mentioned under references. There is no intent to infringe upon anyone’s copyrights. If, any claim is lodged, it will be acknowledged and duly recognized immediately.

Reference:

https://knowledge.insead.edu/marketing/what-happens-when-you-actually-listen-customers