Why companies should care more about insights?
A recent survey showed that European and American CEOs didn’t place much emphasis in the insight generation capability of their companies. The “strategic insight generation process” wasn’t included in their top ten priorities list. As demonstrated by many behavioral studies, human beings can remember and focus on no more than 3-5 items at time- so if you are not in the top 10, you are irrelevant.
Peter Drucker said 15 years ago: “business people stand on the threshold of the knowledge society. In this society, a company’s competitive advantage will come from an historically underdeveloped asset: the ability to capture and apply insights”.
We haven’t made a lot of progress since then. The question for the readers of this blog is “why”? Why don’t business leaders – in a knowledge economy, with shrinking average margins in many product categories and weak macro-economic scenarios – give strategic insight the priority it deserves?
Strategic insight is very often related to customer insight. An insight is strategic when, for example, it can trigger an innovative and winning value proposition. Building an insight generation capability is not only about using customers’ (or consumers’) investigation tools, but also about having appropriate processes, and skill-sets in the customer insights department. The position of the department in the organization and its degree of integration with the innovation and strategic planning departments is alsovery important.
Building such a comprehensive capability and organizational emphasis would be a competitive advantage, as Drucker said.
At DigitalMR we believe there are 3 key broad indicators for embracing strategic insight generation.
Company culture – is the company customer-led? If it has an embedded culture of putting its customers first then it is likely to be more insight orientated. This example from Nestle’s corporate website shows you what a customer led organization looks like:
“A deep understanding of our consumers is essential to our success as a business. After all, without that, we'd soon lose our ability to connect with our consumers and energise our brands with the warmth and integrity which have made us a hallmark of quality for well over a century.
The question is: how do we maintain those levels of insight both today and in the future?
The answer is through the efforts of our Consumer Insight team. A centre of excellence in market research, this is where we provide insight across everything from the launch of a new product to changing packaging, developing and modifying recipes and finding the ideal communication channels for our consumers. In every case, our team is motivated by a deep commitment to understanding Nestlé consumers and their changing needs”
In addition to culture, there needs to be the right organizational structure in place to facilitate this approach. Customer-led organizations will usually refer to their MR function as a Customer Insights Department. This is important as it reflects the need to incorporate across the organization and not have MR operating in a silo. A second indicator is whether the position of Customer Insight is viewed more as strategic rather than tactical. Does the head of Customer Insight have a seat in the board room or at least have the ear of the CEO or does the role function 3 levels below, reporting to a Marketing Director who reports to the CMO?
If a Customer Insight department is operating at a strategic board room level, it is will be more able to embrace “big data” by incorporating data from other departments (especially transactional and operational data) and data generated from its market research program. It is also more likely to have backing and resource to converge data streams into a reporting platform that allows analysts from departments across the organization to access and interrogate dashboards.
Finally a consumer-led organization is likely to utilize the latest research tools and technology to provide rapid and cost-effective insight generation. From setting up online communities for research and co-creation, to using web listening and online ethnography, today’s technological advancements make it easier than ever to collect data, analyze it, understand it and then extract business insights.
Online ethnography or netnography can extract consumer insights from everyday life with little effort or cost, for example, using online video diaries accessed with smartphones. Take this video clip example of a young woman using a dishwasher. When the dishes are very dirty she throws an extra dishwasher tablet in the machine, since there is no space in the detergent compartment.
This simple demonstration could provide two key insights:
1) the manufacturer of the DWM can create double compartments for tablets.
2) the detergent manufacturer could develop a double size or double density tablet.
Another example of insight generation was Listerine, who found out from listening to conversations on the internet that people not only use its mouthwash as a treatment for toe nail fungus but also as a mosquito repellant used in small containers around the barbegue vicinity in their garden.
Small wonder then, that many switched-on companies are now coming to the realization that being customer-led means listening to what their customers have to say and integrating it with other data streams to strategically generate insights for competitive advantage.
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