687699 market research customer insight

8/3/2019 687699 Market Research Customer Insight

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Research that Produces

Customer Insights

Mohan Sawhney

Kellogg School of Management

October 22, 2003


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From market research to insight

What exactly is an insight?

What are some examples of insights? What is the process of developing insights?

How do we transform market research from

providing information to delivering insights?

What tools and frameworks will help us to improve

the quality of customer insights?


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Agenda

The nature of insights

Why traditional research rarely produces insights

How to do research that produces insights

Rethinking the mission of the research organization

A process framework for evaluating research projects


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Insight Conceptual definitions

Grasping the innernature of things intuitively

Clearordeep perception of a situation

Clear (and often sudden) understanding of a

complex situation

A feeling ofunderstanding


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Defining a customer insight

A customer insight is a fresh and not-yet

obvious understanding of customer beliefs,values, habits, desires, motives, emotions orneeds that can become the basis fora

competitive advantage.

A not-yet obvious discovery

A unique and fresh perspective A penetrating view of the obvious

A competitively-advantaged idea

Grounded in customer understanding Not a number, a fact, or a quote from a customer


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Seven characteristics of insights

1. Not immediately apparent

2. Can be based on one data point

3. Often come from unusual sources

4. Often discovered accidentally

5. Often rooted in observed anomalies

6. Rarely emerge from quantitative analysis

7. Need to be useful


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Examples of customer insights The Sony Walkman as redefining the relationship between

personal space and private space

The i-Pod as being able to take all your music with you but yetbeing unobtrusive

Maison Haire studies on Instant Coffee as reflective of lazymothering

P&Gs learning about Japanese mothers as being fastidiousabout personal hygiene, spending a lot of time outside theirhomes and traveling on public transportation

Research on HDTV showing that videophiles are people with a

lot oftime to watch TV and not people with a lot ofmoneytospend on video equipment

Steve Jobs insight that people see color of their PCs as waysto express their personalities and make a personal connectionwith their PCs

Sam Waltons insight that suburban and semi-rural markets aremore profitable and underserved by competition


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Virgin Mobiles Insights

About Young Adult Market

Young adults dont

have credit cards

Young adults

dont want their

fathers carrier

Young adults buy

lots of music

Young adults dont

like to be marketed to

Prepaid cellular Rebel brand image

Anonymity

No contracts

Word-of-mouth advertising

Non-traditional outlets


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It only takes a few

Companies built on a single insight

Home Depot Target Do-it-Yourselfers

Federal Express Segment by speed Dell Be direct

Starbucks Sell the experience

Southwest Forget hub-and-spoke

Enterprise Rent cars in the neighborhood

Body Shop Pursue environmental & social change Microsoft Empowering people through software


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Value Capture

Customer Experience

Solution

PlatformBrand

Networking

Supply Chain

Organization

Offering

(WHAT)

Process

(HOW)

Presence

(WHERE)

Customers

(WHO)

Customer insights as a subset of

business insights: The Innovation Radar


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Value Capture

Customer Experience

Solution

PlatformBrand

Networking

Supply Chain

Organization

Offering

(WHAT)

Process

(HOW)

Presence(WHERE)

Customers(WHO)


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Value Capture

Customer Experience

Solution

PlatformBrand

Networking

Supply Chain

Organization

Offering

(WHAT)

Process

(HOW)

Presence(WHERE)

Customers(WHO)


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Value Capture

Customer Experience

Solution

PlatformBrand

Networking

Supply Chain

Organization

Offering

(WHAT)

Process

(HOW)

Presence(WHERE)

Customers(WHO)


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Agenda







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Two ways of knowing

Inductive versus Deductive Reasoning

Inductive Reasoning: Using observation to

formulate an idea or theory. Qualitative orInterpretative research draws on inductivereasoning.

Deductive Reasoning: Taking a known idea ortheory and applying it to a situation (often with theintention of testing whether it is true). Quantitativeor positivist research draws on deductivereasoning.

Traditional research tends to have a positivist bias


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Two research paradigms

Qualitative Paradigm: Focuses on investigating

subjective data, in particular, the perceptions of thepeople involved. The intention is to illuminate theseperceptions and, thus, gain greater insight andknowledge.

Quantitative Paradigm: Focuses on what can bemeasured. It involves collecting and analyzing

objective (often numerical) data that can beorganized into statistics and interpreted.


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Contrasting the two paradigms

Accept or reject a

proposed theory, or get

specific answers to well-

defined questions

Illuminate a situation to

create deeper

understanding and

insights

Outcomes

Quantitative, rigorousQualitative, eclecticMethods

truth seen as objective

and universal

truth seen as subjective

and socially

constructed

Approach to Validity

Validate insights by

testinghypotheses

Generate insights that

lead to hypotheses

Objective

(usually) deductive(usually) inductiveType of Reasoning

positivist /

hypothetico-deductive

interpretative / responsiveAlso Known As

Quantitative ResearchQualitative Research


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Insights

Recommendations

Findings

Information

Data

Traditionally, marketing

researchers and researchagencies stop here

New understanding that isNew understanding that isactionable and competitivelyactionable and competitively

uniqueunique

InterpretationInterpretation of theof theresearchresearch findingsfindings..

Consider carefully theConsider carefully the

researchresearch objectivesobjectives..

DataData Analysis andAnalysis and

Data ReductionData Reduction

The Pyramid of Understanding


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Recommendations

Findings

Information

Data

The Pyramid of Business Value

InsightsOf most value because offers newOf most value because offers new

ways of looking at markets thatways of looking at markets that

lead to competitive advantagelead to competitive advantage

Summarizes the implicationsSummarizes the implications

of the research for the businessof the research for the business

SelectedSelected informationinformation thatthat isis ofof

interest, butinterest, but lackinglacking inin implicationsimplications

InformsInforms thethe businessbusiness aboutabout aa

market, but no indication ofmarket, but no indication ofrelativerelative

mportancemportance of different pieces ofof different pieces of

informationinformation

Of little value because itOf little value because it isis

usually difficultusually difficult to understand andto understand and

interpret on its owninterpret on its own..


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It takes two to tango

Inductive, Qualitative,

Exploratory Researchthat Produces Insights

Deductive, Quantitative,

Confirmatory Researchthat Validates Insights

To blend the two paradigms into a synergistic whole, we need to

eliminate the positivist bias in research, balance the research portfolio,and tightly link the qualitative research with the quantitative research.


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Agenda







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Research as photography

What to see

How to frame

What lenses to use

How to focus How to develop

How to share How to remember


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Seven steps to insightful research

1. Right mindset

2. Right projects

3. Right tools

4. Right customers5. Right suppliers

6. Right metrics7. Right dissemination


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1. The right mindset 10 tips

1. Experience the task

2. Open your mind3. Enter the mind

4. Peel the onion

5. Respect the choice

6. Learn to listen

7. Be there yourself8. Observe natural behavior

9. Watch little cues

10.Keep moving on


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2. The right projects

Balancing the research project portfolio

Proactive,

Episodic

Reactive,Routine

Exploratory

Research

Validation

Research


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3. The right tools-

Broadening your repertoire

Observation ofObservation ofCustomer BehaviorCustomer Behavior

in Nativein NativeSurroundingsSurroundings

AnomaliesAnomaliesand Discrepanciesand Discrepancies

Metaphors andMetaphors andAnalogiesAnalogies

CustomerCustomerInsightsInsights

Patterns inPatterns inCustomerCustomer

Transaction DataTransaction Data

Introspection,Introspection,IntuitionIntuition

and Brainstormingand Brainstorming

Ideas from InnovativeIdeas from InnovativeCustomers andCustomers and

PartnersPartners


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IDEOs eclectic research toolkitCultural probes

Affinity diagrams

Try it yourself

Bodystorming

Extreme user interviews

Draw the experience

Five Whys

Activity Analysis

Immersion

Fly on the wall

ScenariosCross-cultural observation

Foreign correspondents

Empathy tools

Word-concept association

Narration

Error Analysis

Guided Tours

Social Network Analysis

Shadowing

Still Photo SummaryPredicttheHeadlines Customer Experience

Flow Analysis


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Hu

man

Hu

man

Re

sources

Re

sources

Subsidia

ry

Subsidiary

Marke

ting

Marke

ting

Lic

en

sing

Lic

en

sing

ProductProductDevelopmentDevelopment

Finance

Finance

4. The right customers

Thinking broadly about customers

Legal &Legal &

CorporateCorporate

AffairsAffairs

MarketMarket

ResearchResearch

ProductProduct

MarketingMarketing

CorporateCorporate

MarketingMarketing

Top Management

Partners


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5. The right suppliers

From vendors to research partners Trusted advisor versus research vendor

Strategic relationships with bilateral commitment Strategic scope

Integrated approach versus project-to-project

Solutions and service-minded Complementary skills

Eclectic methods

Diverse points of reference Engaging, inspiring recommendations

Consistent methodology and tools across projects


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6. The right metrics

Measuring the Value of Research Decision value: What decisions did the research cause to be:

Different

Not taken Improved

Learning value: What new understanding did the research provide usabout our customers and markets that: We did not know before

Customers could not have told us

We would have guessed differently

Business value: What implications does the research have for: Identifying new opportunities

Developing new products Differentiating us from competitors

Seeing the market differently

Option value: How can the insights from this research be leveraged:

Across business groups Across functional areas

Across research projects


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7. The Right dissemination approach -

Presenting Research Findings

Worst practices

35 key findings from theresearch

10 pages of methodology

Every possible analysisconducted

Analyses just from thatproject

Death by PowerPoint andbullets galore

Best practices

Key recommendations andimplications for decisions

Methodology in appendix

Only analyses needed tosupport recommendations

Integrates insights andanalyses from prior projects

Compelling narrative, writtenas a text story


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Agenda







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1 2 3 4 5

Finance &

Accounting

VeryNot very

Marketing

Information

Services

HumanResources

Market

Research

Source : McKinsey

How useful is the information ?

Market Research doesnt deliver:

What CEOs say about Research


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Criticisms of Market Research

Dont know our business

Too data bound Confirm what we should already know

Not integrative people, focus on one job at a time

Not good at delivering or generating insight

Presentation valium

Insular Reactive

Order takers

Too rigid and slow


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Some soul-searching questions What value does market research add to our business?

What are the major strategic decisions taken by ourcompany over the past year?

What role did market research play in these decisions?

What would decision makers do if the research group did not

exist?

How could market research have had more impact?


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Creating a vision statement for research

Vision Statement

An energizing picture, based on a view of thefuture, of what leadership wants the function tobecome.

Elements

Fundamental goal

View of the future Scope of offering

Distinctive competencies


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Vision statement for Unilevers

Consumer and Market Insights Group

To be the fundamental resource for

business intelligence, knowledge, and toolsthat are used systematically for achieving

higher levels of market performance and

stakeholder value.


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McKinsey Customer Insights Vision

To be the preeminent consultants generating deep

customer and consumer insights to createinnovative marketing and business solutions for our

clients.


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Eli Lilly Customer Insights Vision

Delivering insights that drive decision

making.

NOT Risk Avoidance

NOT Confirmation of what we (ought to) know


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Repositioning the research function:

Some titles that firms are using

Customer and Market Insights Group

Consumer Insights Group Business Analytics and Assessments Group

Customer Insights and Strategy Group

Customer and Market Intelligence Group

Customer Understanding Group


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Market research at Unilever

A case study


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Unilevers Corporate Statement of

Purpose

Our purpose at Unilever is to meet the everydayneeds of people everywhere, to anticipate the

aspirations of our consumers and to respond

creatively and competitively with branded productsand services which raise the quality of life.

Consumer insight as an enabler of the corporate mission


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Consumer insight and Unilever growthOur growth depends on one thing above allothers. Consumers.

If we do not get better at understanding ourconsumers and meeting their needs, want andaspirations, we will not grow.Its as simple as that.

Keki Dadiseth Patrick Cescau

HPC Division Director Foods Division Director


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Four roles of Unilever CMI Group

Consumer Guru

Consumer Voice

Consumer Process Expert

Guardian of Consumer Knowledge


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Transformation of Research at

Unilever: From MR Group to CMI Group

Less time managing projects, more time adding

value and mining for strategic understanding

New Competencies Needed

Strategic Influencing

Breakthrough Thinking

Personal Experience

Seizing the future


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The New Market Research Mindset

Think BIG PICTURE

Think CLIENT/BUSINESS

Think INSIGHTS & SOLUTIONS

Think LONG TERM RELATIONSHIPS


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Agenda







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Seeing Research as a Learning Cycle

Sense

Interpret

CommunicateDecide

MonitorLearn

and

Adapt

Eclectic tools

Diverse listening posts

Interpretation skills

Empathy

Presentation skillsDissemination

channels

Relevance

Partnership

Tracking

Evaluation

Post-mortem


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Checklist for research projects How does this project fit into the global business priorities of our

business?

How does this project relate to other research projects? Is there something new or creative about the problem, the

methods, or the anticipated learning?

What do we already know about the problem?

What stakeholders will benefit from this research? What is the business case for this research?

Are we using the right research methods for the problem?

Should we outsource this research? How important is it for us

to be personally involved in the field work? How will we involve the customers of this research in the

process?

What is our plan for disseminating the findings and insights?

How will we capture the learning and insights so that they areeasily accessible in the future?


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Scorecard for evaluating research

What were the key findings of the research ?

What were the key implications of the findings? What new insights did the research produce?

How were the research results disseminated?

Who actually ended up using the research?

What decisions did the research impact?

What was the estimated business value of theresearch?

What did you learn from this research about doing

future research projects differently or better?


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A Macro Issue: Knowledge

Management system for research

This is a macro question what is the process for

disseminating, archiving, retrieving andsynthesizing cumulative learning across all

research projects done in the past?

How will decision makers use this system? How dowe make sure this system is user-friendly and

contextually relevant?


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Bottom line The research team should measure itself on the business

value of the insights that it produces through research, not

on the quantity of research or the number of projects that itconducts.

The research portfolio needs to be balanced with anappropriate blend of insight generating research andhypothesis validating research.

The research team should strive to be seen as an expertand trusted advisor by its internal customers.

This will require a different mindset, different methods, anddifferent metrics.

The research organization needs to redefine its mission andrethink its organization design and processes to achieve this

goal.

687699 market research customer insight

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