Performance enhancing insight

In analysis, customer insight, market research on July 2, 2013 by sdobney

Customer or consumer insight is the area in the business that looks after monitoring, modelling and predicting customer or consumer behaviour. The difference between findings or results and insight, is that insight should carry through the business, helping managers understand why and how purchasers behave the way they do and so apply this understanding to the running of the business. Dissemination and communication is part and parcel of the insight manager’s role. Not all insight though is equally valuable.Most insight is about trying to find competitive levers to better serve the customer, or alternatively to help increase profitability – eg by removing elements not valued by customers or finding ways to increase net margin.

The simple reality is that the customer would like more, and for a lower price. So it is very easy to find ways to improve the offer by adding cost, or cutting prices or offering more promotions that ultimately reduce profitability. Sometimes factors which are popular for marketers, like adding more variations or extending a product range to increase reach and so potential sales, have a hidden impact in terms of adding cost through complexity and so increasing management overhead, but also hidden cash implications in areas such as stock control and warehousing/distribution. A common first step for a new CEO arriving at a business is to cut the product range and simplify the offer. In some areas there is therefore a dissonance between what the customer likes and wants, and the cost impact to the business.

Not every want or need necessarily has a negative profit or cost and this is where the real insight skill comes in. In some areas, changes to better satisfy the customer might be relatively cost-free (eg packaging redesign or improved communications) or have a disproportionate benefit compared to their cost. Sometimes these are simple emotional connection factors like ensuring service is prompt and welcoming, presentation is clean and fresh or imagery connects or is distinctive or memorable.

Performance enhancing insight is thus insight that helps the business build more profitable business. It usually involves getting under the skin of decision-making – taking the view that simple customer wants may be too simple and that real drivers and points of competitive difference are likely to be more subtle (otherwise competitors would offer them) and so more challenging to find – be they emotional drivers and triggers or trade-offs in use and functionality. As businesses rush to do their own DIY research, it’s possible that the surveys and research carried out becomes too simplistic and hidden, and more powerful and profitable insights are missed. Experienced researchers understand that customers often struggle to articulate reasons for decisions, they don’t always give consistent or accurate answers and sometimes what they claim to believe is different to what they actually do in practice. If everyone is able to do simple research cheaply, just doing research stops being a competitive advantage. It’s the ability to find insights competitors don’t see or don’t find that becomes most valuable.


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