Know your customer. The statement is blindingly obvious and overwhelmingly important. As a piece of business doctrine, it is indisputable. But how to do it? That's not as clear.

Hoping to turn vast data about their customers into a meaningful picture of who the customer is, CEO's and managers alike man customer hotlines, visit stores and work the front lines. Lou Gerstner, CEO of IBM, for example, spends one hour each day on the phone with a customer. Selling to them, asking for feedback, it doesn't matter. And John Pepper, formerly CEO of P&G, listens in on the company's 800 number for two hours each week. Why?

Because Gerstner and Pepper, like many other CEO's and managers, sense that the reams of data that their marketers supply--although statistically significant--fail to fully capture the essence of who the customer is. Marketing data may be necessary, but it is not sufficient for truly knowing your customer. What these CEO's are seeking, then, is what good sales people know instinctively--the nuances that bring customers to life. Good sales people know their customers as living, breathing, human beings that have history and context and multiple types of needs: Emotional needs, functional needs, and financial needs. Sales people know real customers and how they will react to real situations with real products.

When talking about their customers, sales people will tell you a story --they'll tell you where "George" and "Harry" went to school, how long they've been in the job, their personal likes and dislikes. They'll tell you about what "George" really wants—to get promoted, transferred, etc.

On the other hand, marketing people have statistically significant data that when taken together clearly represents a type of customer. These types can range everywhere from, say, techno-geeks, who live in Southern California, exist on junk food, and own a retooled Harley Davidson to the soccer Mom who lives in New England, drives a Volvo station wagon, and likely runs the auction at her church or at her son's private school.

And while such labels are helpful, knowing your customer as a type is not the same as knowing your customer as an individual. Marketers may know "statistically significant George," or "freeze-dried George"—customers with all the flesh and blood taken out. However, what they really need to know is a kind of reconstituted George—one who exists as a type and yet a type that they can know intimately.

After many years of tackling this marketing problem I've come to believe that it is possible to meld the two worlds to create an intimate portrait of the customer that is also statistically viable. I believe that the way to do this is to look at customer behavior in a number of contexts. That is, seeking to understand what the best salesmen already know about their customers and translating that information into a story that describes the role a product plays in a customer's life.

Such data has often already been collected, but has not yet been shaped into a story that helps marketers feel as if they know their customer. Yet understanding the story that customers tell themselves can be a powerful tool.

Consider the case of Tony the Tiger. For at least thirty years, the advertising icon for Kellogg's Sugar Frosted Flakes in the United States has been an animated character known as Tony the Tiger. Traditionally, ads for Sugar Frosted Flakes show Tony The Tiger talking to the core target of the brand--kids. The new ads, which started about four years ago, show an adult sitting in a chair in a half-darkened room describing their desire for the product. The adult's face is blacked out, in the way it would be if the person were in one of those documentaries where they are trying to protect their identity. This ad has been immensely successful for Kellogg's. It's given Sugar Frosted Flakes a 20% lift in the last four years, with the volume growth coming from adults.

The reason is that Kellogg's figured out, one way or another, what went through the mind of an adult who goes to the kitchen cabinet, opens it up and looks at all the cereals. The adult, particularly those who had families, saw the Sugar Frosted Flakes and said to himself or herself: "I like Sugar Frosted Flakes, but I can't have them because Sugar Frosted Flakes are for kids. You know, it's Tony the Tiger—if I take it out, my kids will give me a hard time. So I'll have something else."

What the ad does is acknowledge, and then interrupt, the story that the adult consumer tells himself. The ad says: "Yes, we know you're telling yourself that it's not okay for an adult to have Sugar Frosted Flakes. But it is okay to have Sugar Frosted Flakes, because other adults do it."

In this case, then, and in many others like it, knowing your customers means knowing the story they tell themselves about your product.

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