roi of insights report - relayto/ · executives, i n their companies’ consumer insights and big...

ROI of InsightsReport

NOVEMBER 20, 2017

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Copyright

© 2017 The Boston Consulting Group and The Global Research Business Network

The copyright on this report is co-owned by The Boston Consulting Group (BCG) and The Global Research Business Network (GRBN). Parts or the whole of this report may only be reproduced with written permission from either BCG or GRBN. Parts or the whole of this report may only be distributed or transmitted if BCG and GRBN are clearly acknowledged as the copyright owners. In addition, when referencing material contained in this report, the source “BCG GRBN – ROI of Insights Report” must be acknowledged.

Disclaimer

The information provided within this report is for generalinformational purposes only. There are no representations or warranties, expressed or implied, about the completeness, accuracy, reliability, or suitability with respect to the information, products, services, or relatedgraphics contained in this report for any purpose. Any use of thisinformation is at your own risk. Neither BCG nor GRBN assume nor accept any liability to any party for any loss, damage, or disruption caused byapplying the information shared in this report.

Read Me I’m Important

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Contents

ROI Measurement Landscape

About the ROI of Insights 2017 Study

2015 Consumer Insights Benchmarking Study

Agency Involvement

Setting Up for Success

How CI is Measured Today

Next Steps

Introduction to the Report

3

Introduction to the Report

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Measuring the business impact of Insights is a must if Insights is to achieve a strong seat at the table.

This report presents the key findings from the qualitative and quantitative research recently undertaken by the Boston Consulting Group and GRBN on the ROI of Insights.

This research builds on the BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study, which revealed as few as one-in-five Insights teams are seen as strategic partners in their organizations. Additionally, measuring the ROI of Insights was indicated as one of the key characteristics of an Insights function that is seen as a strategic partner.

The key objective of the latest research was to increase the level of understanding of the state of ROI of Insights measurement today and to suggest paths to better measurement tomorrow in order for more Insights teams to have that seat at the table.

We hope you find the report both insightful and inspiring.

About This Report

Christine BartonBCG

Senior Partner and Managing Director

Andrew CannonGRBN

Executive Director

.

Pierre DupreelleBCG

Global Topic Leader, Customer Behavior

Mario SimonBCG

Global Topic Leader, Consumer Engagement

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Executive Summary

• More mature Insights functions measure the ROI of insights investments

• Those who measure ROI have found more of a seat at the table, increased budgets, and control

• When Insights teams measure ROI they typically do so after strategic and ad hoc projects. The reports are shared with the CMO and executive team; the most mature Insights functions are transparent with and engage the Board

• Identifying success criteria upfront is key for post-project measurement and, more generally, the integration of Insights into business decision-making

• Project criteria should be specific to particular business decisions being affected

• Agencies / firms need to lead more framing value creation and return from CI investments

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Executive Summary(in detail)

Previous BCG research in 2015 found lack of clear ROI as barrier to CI innovation

• Percent of those who believe the Insights function provides a high ROI had jumped 25% points to 68% since 2009

• More mature Insights functions tend to more commonly measure ROI

• Those who measure ROI tend to believe it is high and are more satisfied with Insights’ ROI than those who don’t

The study conducted in 2017 surveyed ~200 respondents across industries, mainly senior executives, in their companies’ consumer insights and big data functions

The landscape today shows trends toward measurement can provide benefits to Insights teams

• More mature Insights functions, and particularly those who measure ROI, often find the Insights function has gained more of a seat at the table and increased budget andcontrol

• They also have seen more tangible benefits like higher capital allocation and increased headcount

Today, Insights teams tend to handle measurement after each project

• Reports are then used mainly by executives to drive budget allocation and spenddecisions

• However, many companies face barriers to measurement like difficulty in isolating impact and time lag to results

Insights impacts a wide range of functions, particularly for those that are more mature, and varying somewhat by industry sector

• Measurement metrics are primarily revenue-based, though also span to marketing effectiveness and brand equity depending on function impacted

Agencies are used at a high rate today, with companies desiring to be even bigger customers

• Those who measure or have evolved Insights functions are more satisfied with both quality of insights and the ROI of agency use

• While Insights teams measure ROI themselves, there is a strong desire for agencies to be involved, providing benchmarks or best practices for measurement

7

2015 Consumer Insights Benchmarking Study

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Emphasis of research today is on trends in ROI measurement and tactics for measuring

Past research highlighted the need for ROI of insights measurement

Senior executives cited increased need for a

more strategic mindsetin CI

Heads of insights and practitioners cited need for clear objectives and

open communication

'Measurable ROIs' cited among top

necessary changes to CI

97

Architecting a world-class Insights organization requires executive, cross-functional commitment/engagement

Vision and pace Seat-at-the-tableand leadership

Functional talentblueprint

Ways of workingwith the Line

Self-determination Impact and truthculture

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10 2017

0717

ROIo

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v23.

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Architecting a world-class Insights organization requires executive, cross-functional commitment/engagement (II)

Impact and truth culture

Ambitious culture

Truth telling, positive, apolitical, client-services mentality

Perform-or-out advancement expectations; opposite of academicor tenured

Value creation orientation: customers, business “line” partners, and shareholders

8

Self-determination

Significant room for self-determination and accountability ofthe function

Need for aligned incentives on overall business/brand performance

Eventually, even more of the capability/ budget in control of the function

Need to question outsourcing model, particularly in CPG

Ways of working with the Line

Still significant room for integration with “line” decisions, beyond commercial

Systematic feedback, value proof, and metrics required

Function “earn-to-play” supported by top-down executive directive/expectation

Functional talent blueprint

CI functional blueprint: forward-looking, strategic, innovative, proactive, analytic

Functional specialization achieved through mix, use of partnersand advisors

Hire/develop skillsthat are translating insights into actionand ongoing advisory support of business “line” partners

Seat-at-the-table and leadership

CI is still typically reporting too deep in the organization for the investment

Blueprint for CI head: strategic, General Manager, wearing enterprise hat

Vision and pace

Our 2009 vision holds, and is even more important nowthan ever

Pace of transformation has been glacial, not going far norfast enough

There is a CEO and executive committee leadership negligence

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11

Limited budget, insufficient resources, and lack of clear ROI most limit experimentation with CI innovation

(%)

Proof of conceptResourcing Lack of commitment

“Biggest barriers to innovation are resources, both time and money. A lot of times there’ll be [a need for] an innovation project but it can't find a home.”1

1. National Sales Manager, Automotive companySource: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study 9

51

41 4035 34 34 32

Limited budget Lack sufficientstaff

Unproven ROI Short-term focus Competingpriorities

Cost-containmentculture

Cost of individual studies cost-prohibitive

Barriers to experimenting with innovation in CI and big data/customer analytics

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1210

Selected Insights:

Impact and Truth Culture

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• Belief CI provides high ROI significantly higher in 2015 than 2008-09, though only ~30% report attempting to measure CI impact

• Respondents whose companies attempt to measure ROI have higher perception of return and higher overall satisfaction

• CI and the Line agree there needs to be more hiring into and skill development on translating insights into business actions and ongoing support of execution with relevant, timely insights

• Best-in-class CI leaders are data-driven, insightful, flexible visionaries, with strong strategic and business orientation

• Stage 3 Strategic Insight Partners CI groups seen as strategistsand, to a lesser extent, General Managers

• “The most successful insights people are definitely those who understand the business”

1311

Belief CI provides high ROI significantly higher todayHowever, only ~30% report measuring CI impact, with significant room to improve

While only ~30% measuring impact of CI1 …

2/3 believe CI provides a high ROI (significantly higher than 2008–09)2 …

… and respondents state mixed satisfaction with ROI3

Respondents (%)

31

Respondents (%)

Satisfaction with ROI on company’s CI

61

Respondents (%)+25%

68

4320

1. CMO, CPG companySource: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study

“We would like to measure ROI, but we struggle with how.”1

We measure the impact of our CI research

Strongly Agree Agree

2009 2015CI provides a high ROI

Strongly Agree agree

Somewhat satisfied

Very satisfied

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1412

Respondents whose companies attempt to measure ROI have higher perception of return & satisfaction, likely due to up front alignment on resource allocation

Respondents whose companies do not measure CI impact have lower perception of return …

Respondents (%)

68

Do measure CI impact

80

30

Do not measure CI impact

61


61

83


52

… and lower intense satisfaction

Respondents (%)

36

Satisfied

Note: Do measure CI impact respondents answered “strongly agree” or “agree” to the question “we measure the impact of our consumer insight”. Do not measure CI impact respondents answered “neutral,” “disagree,” “strongly disagree,” or “doesn’t apply”Source: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study

CI provides a high ROI

Strongly agree Agree Very satisfied

Satisfaction with ROI on company’s CI

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Consumer/Customer insights (“CI”) stages of maturity based on integration into business as well as influence and focus

Stage 1. Traditional market research provider

48%Stage 2. Businesscontributor

33%Stage 3. Strategicinsights partner

15%Stage 4. Source of competitive advantage

• Mostly tactical• Focused on hindsight• Service provider• Order-taking

without own budget• Mostly Marketing scope• Significant CI activities

outsourced• No / little ROI

measurement

• More strategic focus• Focused on real-time

and optimizing existing• Collaboration with

business• CI with input; Line

with decision• Commercial functions• Significant CI activities

outsourced• Inconsistent or

qualitative ROI measurement

• Measurement by CI team

• Focused on strategic, real-time, and improving existing

• Trusted advisor for Line• CI with knowledge base,

points of view,and budget

• Cross-functional• Significant CI activities

outsourced• Frequent quantitative

ROI measurement of projects

• Measurement by internal team members outside of CI

• Focused on foresight, innovative, and new launch

• Corporate leader• Learning organization;

significant budgetand control

• Enterprise perspective• Strategic CI activities in

house• Consistent ROI

measurement and continuous measurement of continuous programs

• Agencies / firms used in measurement of CI ROI

5%

Companies (%)

Insight as a competitive advantage

1614

The more advanced the CI organization, the more reported measurement of ROI and thus higher perceived satisfaction

Source: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study

Who measures ROI? Who measures ROI and what is the impact on satisfaction with ROI?

-35-48

-26

34 2450

67

Percentage of all respondents

-11

Stage Stage Stage Stage 1 2 3 4


60


57


77

Respondents (%)

+39%+28%


88



79

Measure ROI

Don’t measure ROI Agree

Traditional Business Contributor

Strongly agree

Strategic Insight Partner

CI provides a high ROI

Low “n”

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17

About the ROI of Insights 2017 Study

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Benchmarked nearly 200 respondents quantitatively in Q1 2017

• 10+ industry sectors broken out• Insights and analytics leads and practitioners, business

partners, and senior executives• Refreshing and expanding topics from BCG's 2015's study

Explored company-specific challenges and strengths through interviews in H1 2017

• Interviewed 20 senior executives and insights leaders to build on understanding of insights teams' ways of working and impact measurement in practice

2017 ROI of Insights Study Overview

Sample participant industries Broad and deep Insights exploration

Restaurants Travel and tourism

CPG Retail Health and wellness

Consumer financial services

Fashion and apparel

Telecom Professional services

Automotive

Media and entertainment

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2017 ROI of Insights Study (I/II): ~200 survey respondents, with high industry diversity & mix of regional vs. international focus

Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Industry Scope

100

75

50

25

0

Responses (%)

25

50

0

100

75

Responses (%)

Travel and Tourism

Media/Entertainment

Restaurants

Consumer Services

Automotive

Professional Services

Telecom

Non-CPG Consumer

Fashion & Apparel

Consumer Financial Services

Health/Wellness

Retail

CPG

Respondents represent a broad mix of domestic and international businesses

International

Domestic/Regional

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2017 ROI of Insights Study (II/II): ~200 survey respondents, over 70% of which have revenue of $1B+, and good senior participation


Revenue Function

100

0

25

50

75

Responses (%)

100

75

50

25

0

Responses (%)

Greater than $10B

Senior Executive

Practitioner

Business Partner

Respondents represent senior leaders of large, scalable businesses

$1B-<$5B$500-<$1B

$5B-<$10B

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20

Measurement of ROI needed to spur additional investment

Half of companies report spending less than 0.13% of budget on consumer insights & bigdata

Source: BCG ROI of Insights survey, May 2017 (N = 187)

75

50

25

0Total2%+1 -< 2%0.25 -

<0.5%0.05 -<0.1%

Less than 0.05%

0.5 -<1%

0.1 -<0.25%

Total budget/spend on CI and big data/advanced analytics

Responses (%)

100

Average: 0.39% Median: 0.13%In line with results from 2015 study

22


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Key Take-Aways:


• By stage 4, companies almost always measure ROI, while only half do in stage 1

• Key benefits of insights ROI measurement are a better seat at the table and increased control of the Insights budget

• Stage 4 companies also increasingly see impact across variety of decisions

• Industry-wise, retail is on the leading-edge of measurement, while professional services and health & wellness lag

• With senior executives on board and some process in place, key barriers remaining are addressable for Insights teams

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By stage 4, companies almost always measure ROI, while only half do in stage 1

5129 24

27 2948

10

Companies (%)

Stage 4Stage 3

45

Stage 2Stage 1

Usually Half the time or lessAlways~11% of stage 1 companies

never measure

How often do you try to measure the success of the projects at some point after completion?

~50% alwaystrying to

measure still low for stage 4

Source: BCG / GBRN ROI of Insights survey, May 2017 (N = 187)

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It has helped us identify areas we need to work on

CI has achieved more of a seat at the table

We've increased investments in, and expenditure on, CI

The CI function has been given control over more of the CI

budget

It has resulted in more effective capital allocation

We've increased our CI personnel headcount

Key benefits of insights ROI measurement are a better seat at the table and increased control of the budget

Total Stage 1 Stage 4

22

28

33

59

14

69


What benefits has the CI function experienced from impact measurement?

Indexed to total Indexed to total

= Statistically significant at 95% level

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A Key Benefit of Insights ROI Measurement:

More Influence

The research indicates that those Insights functions measuring the impact they are having on the business, are reaping significant benefits from doing so.

Being “in the room” when important decisions are being made and being asked to input into those decisions are clear signs that the function is perceived as a strategic partner in their organizations.

Qualitative Insights

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“We have a committee, which the CEO, CFO, the Head of Strategy, Head of HR, the CTO and myself sit on. Any expenditure or deal that anyone is doing in the business, over a certain threshold, has to go through that committee before it can be signed off. My role in that is to ensure that everything that we spend over that threshold has an appropriate level of measurement attached to it and to challenge people as to what their success looks like on this expenditure.”

A Key Benefit of Insights ROI Measurement: More Influence

Head of Insights, Consumer Services

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In addition to being more influential within their organizations, Insights functions measuring their ROI seem to have growing resources at their disposal, either in terms of budget to spend or headcount.

In turn, many of Insights functions, which have not been able to demonstrate the impact they are having on the business, say they have seen decreasing budget and headcount over the last few years, and also expect this downward trend to continue.

Almost all the Insights leaders we spoke to say that there is increasing demand for data and insights on customers within their organizations. Those Insights functions measuring ROI seem more likely to have the resources to meet that demand, whilst those who are not, are having to ask their suppliers to “cut corners” or say “no” to internal requests. In either case, there is a risk of decreasing satisfaction with the Insights function’s ability to serve the business, which could lead to a downward spiral of further cuts in budget and headcount.


A Key Benefitof Insights ROI Measurement:

More Resources

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“Over four years we’ve grown each year as a team, both in terms in the number of team members and also the amount of budget that we’ve got to work with. I would say that half of that is we are able to show a return on the money the business invests in us as a team, and half that we are able to show a return on investment in a more traditional, commercial sense.”

A Key Benefit of Insights ROI Measurement: More Resources


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“Research is their easiest thing to negate the need for because you haven’t really assessed the value of it in quantitative terms to say this is how much we’re actually benefiting from what we do.”

A Key Benefit of Insights ROI Measurement: More Resources

“Headcount has come down and if I go back a little further, essentially the team size and the budget have been almost halved over a six-year period. We became a convenient place to cut.”

Head of Insights, Banking / Head of Insights, Insurance

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Insights functions measuring their ROI seem more likely to have control, at least jointly, on how to spend their budget, as well as to have the ability to set aside money within that budget for things like experimentation and meeting unexpected needs.

In contrast, Insights functions, who do not measure their ROI, seem more likely to have someone else control the budget and to have that budget 100% allocated before the start of the financial year, making experimentation with new tools and techniques almost impossible. In these companies, if unexpected needs do arise then the requester needs to find the budget themselves, with the result that sometimes important research does not get undertaken.

From the discussions with the Insights leaders, one gets the sense that those measuring their ROI have less negative stress at work and a higher job satisfaction than those who are not measuring their business impact.


A Key Benefitof Insights ROI Measurement:

More Autonomy, More Job Satisfaction

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“My central budget here is owned by us and I don’t have to ask anybody for permission. My boss definitely will not interfere. A very large proportion of our central budget is used for developing new tools or experimenting with new technology Another part of ROI which we are driving very consciously is to remove everything where we know it has no ROI.”

A Key Benefit of Insights ROI Measurement: More Autonomy, More Job Satisfaction

“One of my conditions of staying with the company, a few years ago, was that I be given some of my own budget for things like innovation and development. It’s been a little tricky holding onto it.”

Head of Insights, CPG / Head of Insights, Health & Wellness

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A Key Benefit of Insights ROI Measurement: More Autonomy, More Job Satisfaction

Head of Insights, Health & Wellness

“We ran a marketing mix modelling project and identified 15 million dollars in savings off the spin. Which is huge. So, later that same week, the analyst working on this was asking the brand team for a hundred thousand dollars to do a study. And the guys, the project managers he asked, were like, oh no, that’s not in the budget, I can’t get you that. And their VP turned around and said she just saved us fifteen million dollars, get her the money.”

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Stage 4 companies also increasingly see impact across variety of decisions

Question: For which of the following business decisions are consumer insights – traditional research or commercial advanced analytics/big data – used today in an impactful way?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

3.5

8

6

4

2

0

5.5

Stage 2Stage 1 Stage 4

6.0

Stage 3

Indexed # of business decisions affected by CI in majority of companies within stage

1.0

Basis of index

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Industry-wise, retail is on the leading-edge of measurement, while professional services and health & wellness lag

22 2617

29 27 31 29 37

42 39 36 35 32

40

100

0

80

60

20


23

Non-CPG Consumer3

Companies (%)

55

CPGFashion & ApparelConsumerServices1

Retail Health & Wellness

22

Other non-CPG2

Half the time or lessUsuallyAlways

1. Includes mostly financial services 2. Includes Automotive, Media/Entertainment, Travel and Tourism, Restaurants, and Telecom 3. Includes consumer durables and electronicsSource: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

How often do you measure the success of the projects at some point after completion?

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With senior executives on board and some process in place, key barriers remaining are addressable for CI teams


What holds you back from defining success up-front, or measuring it ex-post, with more regularity and rigor?

• Difficult to do – studies are used in many different ways

• Difficulty in isolating impact of consumer insights

• Time lag between insight delivery and business results

• Consumer insights distant from business decision-makers

• Business objectives not clearly defined

• Insufficient staff to measure

• Lack of alignment on important metrics

• Not required by senior executives

• No agreed measurement process

• Not a priority / don't see the value

Largest barriers to measuring Secondary concerns Not a large barrier today

Particularly challenging for Stage 1 companies

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Everyone we talked to understands that the measurement of Insights ROI is difficult to do, and for many reasons: Indirect impact, time lag, difficulty in isolating from other impacts.

The difference comes when one looks at how Insights leaders react to the challenge. Put simply, those who measure their business impact have found ways to overcome these challenges. And there is not just one solution, rather each leader has developed their own set of solution based on their resources, their organizational structure, and culture.

A good first step is to set up budget allocations by BU or function and horizontal topics and track them. Then, within BUs or functions, have alignment meetings around the timing of strategic planning and operating budgets. Educating the organization on thematic research and investing is a good initial step, too.


A Key Barrier to Insights ROI Measurement:

It’s Difficult to Do

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“Some of the return on Insights work doesn't come for years. So you have to just have the wherewithal or the perseverance to keep that going so people can see that that initiative we worked on in 2014 now is hitting the market. Now what's the sales attached to that? We don't have that discipline.”

A Key Barrier to Insights ROI Measurement: It’s Difficult to Do

“The ROI metric would be on the combined project and not necessarily on the methodology level.”

Head of Insights, CPG / Head of Insights, Insurance

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Those Insights functions measuring their impact seem to be closer to the decision-makers in their organizations. In bigger organizations, they tend to have people embedded within business units and established procedures in place to help them measure their ROI.

Two of these key procedures which enable ROI to be measured are 1) a good briefing document, which has a section on the business objectives and expected outcomes from the research, and 2) a good feedback system, which enables them to measure the impact.

One key success factor would seem to be that success is shared with the business owner, so that the measurement of Insights ROI also helps the business owner report upwards on their own ROI.



Distance from Decision-Makers

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“It's a win-win situation; for ourselves, being able to say that this is the value that we essentially add, and then also for business to say that as a result of the initiatives this is what has been delivered to the business.”

A Key Barrier to Insights ROI Measurement: Distance from Decision-Makers

Head of Insights, Banking

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Very few of the Insights leaders we talked to currently have any kind of framework in place for measuring the ROI and business impact of their work in a consistent manner.

Despite not having a framework, those Insights functions measuring their impact seem to have realized that measuring the ROI of Insights is a “messy business”, requiring a mix of art and science. Where it is possible to measure a direct profit metric they are doing so, but where they cannot, they are using a wide range of other surrogate measures to estimate the return on investment through business impact.



No Framework in Place

42


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Key Take-Aways:


• CI teams primarily measure themselves, on a project-by-project basis

• More advanced CI functions have high visibility with CMO & Executive team, and the CI team also starts to take more control

• Measurement reports are then used for budgeting and scope, particularly among more mature CI functions

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The role of the research and the time horizon should also dictate the relevancy of quantitative ROI over qualitative ROI measures. Megatrends or 10+ year timeframes are hard to measure in terms of $ ROI. They can, however, be measured in terms of behavioral moves sourced from public (Census, eg,) private (enterprise's data), or third party (eg, syndicated data, panels, etc.)

Insights maturation and integration cannot be only pushed bottom up. It has to also be pulled top-down, and it is insufficiently pulled top-down today other than by the CMO.


Setting up for success

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“Our new CEO is very consumer insight focused, and his focus is on making sure that we launch things that consumers actually want, so there's a huge shift in the way we're thinking, which means there's a lot more visibility on Insights as well. I've seen more people reaching out to Insights because he has set that stage which makes it easier for me, quite frankly.”


Head of Insights, CPG

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CI teams primarily measure themselves, on a project-by-project basis


66

39

20

19

18

15

Customer Insights/Commercial Advanced Analytics/

Big Data teams themselves

Marketing organization (CMO)

A business client of the research

Testing team (e.g. A/B testing team)

Outside vendors

Finance organization (CFO)

Total Stage 1 Stage 4

Indexed to total Indexed to total

62%of those 'actively'measuring do so

after almost

every project

(those who don't measure

after each project tend to

look monthly or quarterly)

Who conducts the measurement? How often?

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More advanced CI functions have high visibility with CMO & Executive team, and the CI team also starts to take more control

Questions: Which key stakeholders usually receive and review impact measurement reports?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Stakeholders who review measurement reports

12

14

23

30

30

31

41

41

45

47

The board

The Chief digital officer or equivalent

The CFO

The Chief strategy officer or equivalent

The CEO

The Commercial Advanced Analytics/Big DataCommercial Advanced Analytics team

The CI team

The business partner requesting the work

The Executive team as part of a regular review

The CMO 38% 37% 58% 60%

35% 46% 46% 57%

30% 34% 58% 43%

32% 37% 44% 53%

22% 37% 28% 33%

30% 31% 28% 30%

22% 33% 32% 30%

19% 26% 18% 30%

14% 11% 16% 20%

14% 11% 14% 10%

Stage 1 Stage 2 Stage 3 Stage 4

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Measurement reports are then used for budgeting and scope, particularly among more mature CI functions

Questions: How are the reports usually used?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Typical usage of measurement reports

7

18

23

27

28

35

43

50

Determine CI project scope in the future

As interesting data for the CI team to utilize as they see best

Formally linked to budget allocation

Determine marketing spend and allocation

Monitor insight budget and effective spend

Qualify supplier or evaluate ongoing use ofsuppliers/preferred supplier status

Performance coaching for CI team members and leadership

Respondents (%)

Tied to CI team member pay

41% 47% 50% 70%

27% 46% 48% 50%

30% 27% 48% 40%

16% 27% 28% 47%

24% 19% 34% 37%

22% 20% 32% 17%

11% 10% 24% 33%

11% 7% 6% 7%


Not used to determine team pay

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Key Take-Aways:


• The first step to measurement is ensuring to set criteria beforehand, particularly quantitative

• Beyond strategic planning and brand positioning, there is opportunity to better connect insights impact to key business decisions

• Customer experience ROI measurement example: Revenue growth measured through growth in customer base and sales force effectiveness

• Brand positioning ROI measurement example: Consumer brand equity measured through brand tracking, awareness, and even employee choices

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In companies where the ROI of Insights is measured, the internal briefing document is a critical instrument. As a minimum, it defines the business objectives, but even better the expected outcomes from the research.

A second important factor importance is to have strong modelling capabilities in order to both forecast and measure the ROI of Insights. For example, in the area of strategic planning, a segmentation model is often used as the base for measuring ROI, since it enables easy comparison to what business outcomes would look like with or without the model. In the area of marketing allocation and tactics, media mix modelling is also an important tool, which Insights leaders are able to use to demonstrate a clear ROI, especially in terms of increased marketing efficiencies. Modelling is also important when trying to measure the ROI from pricing research.



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Companies, whose Insights functions are sophisticated in ROI measurement, also measure the ROI of Insights through measuring cost avoidance. This can be clearly demonstrated with respect to research carried out during new product and service development processes, in such cases where the research has led to a project being shelved. In these cases, the company can easily estimate the cost savings made by not proceeding with the project as a Insights ROI measure.

In the customer experience space, one of the keys to being successful at measuring the ROI of Insights is the ability to isolate the change to be made to the process due to Insights recommendations. Once the change is isolated it is a relatively easy task to track the impact of that change on revenue growth and/or cost savings.



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“We also have a second page in our briefing document which includes which one of our seven strategic priorities does the project align to, and what does success look like, what are the key KPIs we need to be measuring.”



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The first step to measurement is ensuring to set criteria beforehand, particularly quantitative


40

20

60

100

0

80

Sometimes or seldom measure ROI

% of respondents

44

13

43

47

Actively measure ROI

Often

Always

100

0

20

40

60

80

% of respondents

189

Sometimes or seldom measure ROI


1726

Those who explicitly set quantitative criteria before projects begin

Those who explicitly set qualitative criteria before projects begin

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Beyond strategic planning and brand positioning, there is opportunity to better connect insights impact to key business decisions

35

35

35

37

37

39

39

45

49

50

56

57

57

66

Portfolio strategy

Existing product /service improvements and category extensions

Market / category / format entry

Consumer engagement / relationship management

Customer service

Communications / marketing messages

New product / service development and innovation

Promotional strategy, allocations and tactics

Customer experience

Consumer branding / brand equity

Marketing strategy, allocations, and tactics

Pricing strategy and tactics 60

Brand positioning

Strategic planning 72

Innovation / R&D priorities and pipeline

Advertising campaign development

Respondents (%)

All respondents

Question: For which of the following business decisions are consumer insights – traditional research or commercial advanced analytics/big data – used today in an impactful way?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

59% 60% 84% 97%

51% 64% 74% 77%

49% 57% 60% 80%

46% 50% 66% 70%

43% 56% 66% 60%

38% 50% 62% 80%

38% 50% 50% 63%

22% 43% 64% 73%

30% 40% 60% 53%

35% 34% 42% 50%

19% 40% 48% 47%

22% 34% 42% 57%

22% 34% 52% 40%

27% 29% 46% 43%

16% 26% 50% 53%

38% 24% 44% 40%


Key areas for potential impact rarely seen in stage 1

Business decision impacted by CI

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serv

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Backup: relevance of CI to business decisions varies somewhat by sector

89% 67% 77% 74% 71% 76% 78% 69%

74% 81% 71% 63% 57% 48% 72% 62%

71% 67% 63% 66% 43% 72% 39% 46%

69% 43% 49% 60% 64% 44% 61% 56%

71% 67% 60% 54% 64% 48% 67% 64%

51% 52% 66% 51% 64% 84% 67% 62%

57% 52% 54% 57% 43% 52% 39% 41%

66% 43% 34% 54% 57% 40% 56% 51%

54% 48% 40% 40% 29% 40% 56% 44%

26% 33% 46% 43% 50% 60% 56% 38%

37% 43% 49% 34% 50% 40% 44% 41%

60% 43% 46% 54% 21% 12% 44% 38%

43% 33% 31% 40% 43% 36% 50% 36%

54% 10% 14% 40% 57% 36% 33% 31%

54% 19% 20% 40% 21% 36% 50% 33%

54% 19% 37% 31% 29% 24% 39% 31%

Business decision CPG Fashion &apparel

Retail Health &wellness

Professionalservices

Consumerservices1

Non-CPGconsumer2

Other non-CPG3

Strategic planning 89% 67% 77% 74% 71% 76% 78% 69%

Brand positioning 74% 81% 71% 63% 57% 48% 72% 62%

Pricing strategy and tactics 71% 67% 63% 66% 43% 72% 39% 46%

Marketing strategy, allocations, and tactics 69% 43% 49% 60% 64% 44% 61% 56%

Consumer branding / brand equity 71% 67% 60% 54% 64% 48% 67% 64%

Customer experience 51% 52% 66% 51% 64% 84% 67% 62%

Promotional strategy, allocations and tactics 57% 52% 54% 57% 43% 52% 39% 41%

New product / service development and innovation 66% 43% 34% 54% 57% 40% 56% 51%

Communications / marketing messages 54% 48% 40% 40% 29% 40% 56% 44%

Customer service 26% 33% 46% 43% 50% 60% 56% 38%

Consumer engagement / relationship management 37% 43% 49% 34% 50% 40% 44% 41%

Market / category / format entry 60% 43% 46% 54% 21% 12% 44% 38%

Existing product /service improvements and category extensions 43% 33% 31% 40% 43% 36% 50% 36%

Portfolio strategy 54% 10% 14% 40% 57% 36% 33% 31%

Innovation / R&D priorities and pipeline 54% 19% 20% 40% 21% 36% 50% 33%

Advertising campaign development 54% 19% 37% 31% 29% 24% 39% 31%

# = % of respondents who see CI having some impact on process today1. Includes mostly financial services 2. Includes consumer durables and electronics 3. Includes Automotive, Media/Entertainment, Travel and Tourism, Restaurants, and Telecom Question: For which of the following business decisions are consumer insights – traditional research or commercial advanced analytics/big data – used today in an impactful way? Source: BCG ROI of insights survey, May 2017 (N = 187)

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“We have done a big attitudinal behavioural segmentation and have a segmentation of our customer base, and within that we have our growth segments as well. For each of our segments, we have programmes and target systems lined up for them. We have access to the live data, which we can look at in real-time, and look at over longer periods, and obviously we know how much money is going into it, so we can actually look at cost by acquisition. This gives us a simple calculation of value that we can then benchmark our other programmes against.”

Insights ROI Measurement: Strategic Planning


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“We make significant recommendations based on our model for media allocation and we’ve been able to see how shifts in that allocation actually effect the sales picture. We did some research that recommended shifting dollars among our media mix and that resulted in x number of dollars, pre and post, if you will. So, at the end of the year, let’s say we would look back six months from the time to where we made this shift and run the model with the original allocation and run it again with the new, or then look at actuals.”

Insights ROI Measurement: Marketing Allocation and Tactics


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“We have a sales model. You can tell it all the known factors, and then you can decide what price by different segments could be, and it would tell you how many sales you would make. We can play with the dynamics of pricing and promotion. It also helps with estimating the media spend from marketing. This is probably the piece of work that directly has the most impact financially across the business, because also within that model is all the financial data.”

Insights ROI Measurement: Pricing Strategy and Tactics / Marketing Allocation and Tactics


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“What about the value that we bring which would be part of ROI in terms of making sure that we don't go forward with these things. If we hadn't done the work, if Insights weren't involved, we would have gotten this product to the market and it would have failed, but because we did the work, we know that the initiative or the product or whatever did not test well on all the key metrics and therefore we eliminated it. And so that piece of eliminating dud needs to be part of this conversation as well.”

Insights ROI Measurement: New Product / Service Development and Innovation

Head of Insights, CPG

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Business decisions commonly influenced by CI are monitored through varying metrics, though primarily revenue growth

Source: BCG ROI of insights survey, May 2017 (N = 187)

Metrics to measure insights impact on business decisions

Business decisions whereCI has an impact today (top for stage 4)

Revenue growth

Marketing effectiveness

Consumer brand equity

Price realization

Cost reduction

Employee brand equity

Strategic planning 77% 62% 50% 36% 33% 18%

Customer experience 63% 57% 77% 31% 24% 26%

Pricing strategy and tactics 74% 30% 28% 79% 28% 3%

Brand positioning 56% 75% 77% 28% 15% 23%


82% 41% 46% 47% 25% 10%

Marketing strategy, allocations, and tactics 67% 85% 59% 28% 32% 9%

Overall average 65% 56% 53% 34% 29% 16%

# = % of respondents who use that metric to monitor and see CI having some impact on process today

= 1 std. deviation above mean = 1 std. deviation below mean

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Customer experience double-click: Revenue growth measured through growth in customer base and sales force effectiveness



Business decisions where CI has an impact today (top for stage 4)

Revenue growth


Consumer brandequity

Price realization

Cost reduction







82% 41% 46% 47% 25% 10%


Overall average 65% 56% 53% 34% 29% 16%


• Improved new customer acquisition

• Reactivation of lapsed customers

• Increased sales associate effectiveness


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“To make sure you can isolate the change that was made in the process and to see how that is impacting, and then obviously they know the cost of implementing that change, and you can measure the impact on customer lifetime value or share of market or whatever the measurement you’re going to use is. And then you’ve suddenly got an ROI bottom line.”

Insights ROI Measurement: Customer Experience

Head of Insights, Insurance

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“So what we've been able to demonstrate with those programs is significant increases in retention, especially with new customers being able to quickly identify trouble spots, go in and fix them, we saw significant upticks, so that one was a relatively easy sell, we continue to run a lot of programs because when you can show that – when you have as many customers as we do, just say even a half a percentage point uptick in retention is millions of dollars.”

Insights ROI Measurement: Customer Experience

Head of Insights, Insurance

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Brand positioning double-click: Consumer brand equity measured through brand tracking, awareness, and even employee choices



Business decisions where CI has an impact today (top for stage 4)

Revenue growth


Consumer brandequity

Price realization

Cost reduction







82% 41% 46% 47% 25% 10%


Overall average 65% 56% 53% 34% 29% 16%


• Brand of choice in the space

• Improved brand tracking scores

• Improved customer awareness (aided & unaided)

• Employer of choice


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Agency Involvement

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Key Take-Aways:

Agency Involvement

• Companies who measure ROI or have mature CI functions are more satisfied with agency insights quality

• As a result, the same groups are highly satisfied with the return on investment in these external research agencies

• Agencies tend to be involved in measurement with stage 4 companies, leading to higher trust

• Agencies can begin to build trust in the transition activities after a project

• Agencies risk being pigeon-holed as technical specialists without moving into trusted advisory roles

• Majority of companies have a desire for agencies to guide the measurement process

• To the benefit of agencies and partners, companies in stage 4 prefer to be bigger customers to their agencies

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The research indicates that there is both an opportunity and a threat to agencies with respect to ROI measurement.

The threat of DIY is very real, irrespective of whether an Insights function measures their ROI or not. This is partly, at least, because of the way headcount budget and project spend budgets are treated differently, with these budgets often being held by different people in the organization. The problem is compounded by the fact that it is much easier to create an ROI metric on the headcount budget than on the project spend budget. Whether this is the right metric or not can be argued, but if that is the metric being used to drive behavior then it is a very serious threat to research agencies.

The results suggest that agencies should work hard to become trusted advisors to their clients, which involves proactively discussing, and feeding, into a ROI measurement process, which focused on business impact and not Insights function resourcing.


Agency Involvement

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One key way in which agencies can assist clients with ROI measurement is through the collection of and use of benchmark data.

Also, agencies need to ensure they are asking for briefs, speaking to business partners and tying their own work back to the business objectives.

Agencies should work together with the client to identify how the client may start to measure their work, either on a project, business decision-making area or overall relationship level.

Finally agencies can advise clients on how to communicate about the business impact of their work to Executive Leadership Teams, CEOs and Boards.


Agency Involvement

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“I’m very open- in an appropriate way- with all our business data with them. So, KPI and things like that, ultimately, if that’s proving whether something has worked or not, the brief, the response from the agencies, they have to know that to build the right blend of methodology to get us to that answer.”

Agency Involvement

“The team that manages that, yes, definitely have models that they use to translate what they’re aiming for in order to either retain client numbers or manage the perception of the brand in market. They do have that for themselves. And then they also rely heavily on benchmarks or norms that are created for the industry.”

Head of Insights, Consumer Services / Head of Insights, Insurance

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Companies who measure ROI or have mature CI functions are more satisfied with agency insights quality

5355

52

41

59

43

2231

17 11 16

47

All respondents Actively measure ROI

Stage 1 Stage 2 Stage 3

26

Don’t activelymeasure ROI

Stage 4

Respondents (%)

60

Questions: A1: How satisfied are you with the quality of insights from your external consumer insight/market research vendors or partners?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Somewhat unsatisfied Very unsatisfiedVery satisfied NeutralSomewhat satisfied

Satisfaction with the quality of insights in external consumer insight/market research vendors or partners

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As a result, the same groups are highly satisfied with the return on investment in these external research agency

5662

5230

6066

60

13 20 14 9 10

Stage 1 Stage 2

30

Stage 4Don’t activelymeasure ROI


9

All respondents

Respondents (%)

Stage 3

Questions: A2: How satisfied are you with the return on your company’s investment in external consumer insight/market research vendors or partners?Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Very unsatisfiedVery satisfied Somewhat unsatisfiedSomewhat satisfied Neutral

Satisfaction with the return on your company’s investment in external consumer insight/market research vendors or partners

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Additionally, CPG, Consumer Services, Retail, and Health and Wellness show highest satisfaction of insights

53

43 44

3352

48

6960

54

2214 17

33 32

1123

40

Consumer Services3

Fashion & Apparel

19

Non-CPGConsumer1


All respondents

Other non-CPG2

CPGRetailHealth/Wellness

Very satisfied Somewhat satisfied Neutral Somewhat unsatisfied Very unsatisfied

1. Includes consumer durables and electronics 2. Includes Automotive, Media/Entertainment, Travel and Tourism, Restaurants, and Telecom 3. Includes mostly financial services Questions: A1: How satisfied are you with the quality of insights from your external consumer insight/market research vendors or partners?Source: BCG ROI of insights survey, May 2017 (N = 187)

Satisfaction with the quality of insights in external consumer insight/market research vendors or partners

Respondents (%)

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Agencies tend to be involved in measurement with stage 4 companies, leading to higher trust


0

40

20

60

100

80

Stage 4

43

+24

40

% of respondents

30

Stage 1

30

Somewhat involved

Very involved

51 57

78 73

100

80

0

40

20

60

% of respondents who agree

Stage 2Stage 1 Stage 3 Stage 4

I trust my company's external consumer insight/market research vendors/partners

How would you describe the role of the research agencies in the measurement of the impact of insights?

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Agencies can begin to build trust in the transition activities after a project

54

67

82

83

0 60 10020 8040



51

54

62

63

10020 600 40 80


When using external vendors, my company owns all the underlying data and analyses of a proprietary study

My external vendors transition to my company the surveys, tools, databases, analyses and assets created on our behalf when the study is complete

Stage 3

Stage 1

Stage 4

Stage 2

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Agencies risk being pigeon-holed as technical specialists without moving into trusted advisory roles

5941 35

54 5743

64 5838

73 7753

+89%

StrategistsTrusted advisorsTechnical specialists

Respondents who agree (%)

Stage 3Stage 1 Stage 4Stage 2

68 7080 80

+18%

Use of external consumer insight/market research

vendors/partners to complement internal skills and capabilities

Respondents who agree (%)

Question: A5: To what extent do you agree/ disagree with the following statements? Source: BCG / GRBN ROI of Insights survey, May 2017 (N = 187)

Roles

More advanced CI functions use agencies even more

Agencies are used as technical specialists across the board, though with maturity, agencies become "trusted advisors"

Majority still maintain strategic control internally

More internal ownership More external ownership

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Majority of companies have a desire for agencies to guide the measurement process


How could research agencies best help to improve the measurement of the impact of insights?

48

37

9 6

Be more open to link fees to the impact of the projects

% of respondents

Provide a benchmark of KPIs to measure the impact of

insights of specific projects

Be proactive in suggesting methodologies of measuring

the impact of insights

I wouldn’t trust agencies to measure the impact of

insights of their own projects

Agencies have permission to take

more active leadership on ROI

measurement

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To the benefit of agencies and partners, companies in stage 4 prefer to be bigger customers to their agencies

0

20

40

60

80

% who prefer to be a bigger customer to agencies

+39%

Stage 4Stages 1-3


79

Next Steps

80

How to Get Started

Educate further through additional articles

Self-assess on where you stand today

Sign-up for the ROI of Insights Handbook

Institute value proof after each ad-hoc and

strategic project

Work with agency partners on

immediately improving standard terms

Host annual 360-evaluations with

agencies to foster relationship

accountability

https://www.bcgperspectives.com/content/articles/strategy-technology-digital-introverted-corporation/

https://www.bcgperspectives.com/content/articles/center-customer-insight-marketing-sales-why-companies-cant-turn-customer-insights-growth/

https://www.bcgperspectives.com/content/articles/center-customer-insight-growth-building-better-ci-capability/

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GRBN ROI of Insights Handbook

Building on the in-depth interviews conducted as part of this study, GRBN will be issuing an ROI of Insights Handbook, which offers client-side Insights leaders a practical guide to measuring the ROI and business impact they deliver to the business. The objective of the Handbook is deceptively simple:

To significantly increase the number of Insights teams who measure their ROI, thus helping them become strategic partners to

the business, grow their budget, and their team

The Handbook will be issued on January 23rd 2018, and distributed across the globe through GRBN’s network of regional federations and national associations.

You can sign up to receive a copy of the handbook at http://grbnnews.com/grbn-initiatives/roi-insights-report-handbook/

http://grbnnews.com/grbn-initiatives/roi-insights-report-handbook/

NOVEMBER 20, 2017

ROI of InsightsReport

roi of insights report - relayto/ · executives, i n their companies’ consumer insights and big...

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