How to drive ROI of your Consumer Insights organization

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One of the most inspirational projects on which I’ve had a privilege to work during my time at The Boston Consulting Group is related with a study aiming to understand Customer Insights (CI) organizations and their potential for further development. Research conducted by BCG included 640 respondents from more than 90 cross-sector enterprises balanced among senior executives, insights and analytics professionals, and senior business leaders (Barton et al, 2016).

Overall, based on the results of the study, BCG identified four stages of CI organization development. The top two of them “strategic insights partner” and “source of competitive advantage” have been found only in 20% of companies participated in the research (Barton et al, 2016). Importantly, this number has increased only by 10 percentage points in comparison with 2009, when BCG conducted similar research (Barton et al, 2016).

bestinsightsphere_CI_1What is the reason for this slow CI development?

BCG study helps to answer this question – “Most organizations struggle to integrate CI into their strategic decision-making and core processes” (Barton et al, 2016).

BCG highlights that in order to reach the fourth stage of CI development – “source of competitive advantage”, the organization should be able to provide feedback on relevant consumer and market trends, be capable to identify and offer its guidance on the high priority strategic topics and be fluent with innovative research methodologies (Barton et al, 2016). Hence, one of the most important aspect of a strong CI organization is its proactivity in identification of the business needs and business questions.

To be more specific highly developed CI organizations are strongly engaged in providing insights and guidance on a broad set of strategically important areas: capital investments, merges and acquisitions, risk and reputation management, as well as employer branding, employee engagement, and new product development, R&D; customer experience, customer engagement and customer loyalty programs (Barton et al, 2016).

If the list above of the areas where CI organization can enhance its engagement sounds too broad for you, I can share some of my experience. One of the biggest business contributions that I’ve managed to make in my CI career is related with identification of the undeserved consumer needs in a category on which I’ve been working. Those analysis allowed me to find out a strong lack in an existing product portfolio. I’ve discussed these findings with my multifuctional team including Finance Director. Results of that study exceeded my expectations – the work turned into a big M&A project where I’ve been fully involved sharing consumer and market trends and their SOP (“size of the prize”) for us. Needless to say that this work enabled us to turn identified potential into great business results.

bestinsightsphere_CI_2

Budget matters… ?

BCG research underlines that “both CI practitioners and CEOs focus on budget as a key barrier to the success of CI function” (Barton et al, 2016).

However, the study has also found out that “companies at higher level of CI maturity do not necessary have higher budgets” (Barton et al, 2016).

Following this important finding, BCG mentions that in order to turn CI function into a source of strategic insights and competitive advantage, CI budget doesn’t play a determining role. As it works in the other business areas – the solution lies in answering a question on where to invest its research money, rather than just how much money to invest (Barton et al, 2016).

bestinsightsphere_CI_3Make your ROI shine

Talking about the budget as one of the key constrains to the CI organization development, BCG advises to focus on reallocation of low-value research, data and tools that can be described as pure tactical, backward-looking and descriptive efforts into generation of strategic insights that will allow to empower company’s financial results and ensure faster business growth (Barton et al, 2016).

The good news is that it can be achieved by stronger implementation of the research methodologies and tools that have become available with the development of consumer neuroscience, behavioral economics and advanced analytics from one side, and quick&easy research from another side. To note here, even despite the fact that “consumer neuroscience” and “behavioral economics” can sound as extremely advanced and expensive research approaches in reality it can be turned into the domain of “quick & easy” research. Let’s take to instance available knowledge from Behavioral Economics that can be widely reapplied across various business questions (see Importance of context on consumers choice: Behavioral Economics Perspective and various highly automated neuroscience research tools).

As I’m a big advocate of innovative research methodologies and “quick&easy” research methods, I’ve shared two years ago for your inspiration one of my experience of how CI team can develop impactful business insights with almost zero budget (see Transform your Consumer Empathy with the Use of Mobile ).

Sources:

1.Barton, C., Koslow, L., Dhar,R., Chardwick, S., Reeves, M. (2016). Building A Better Customer Insight Capability. The Boston Consulting Group. Available at: https://www.bcg.com/publications/2016/center-customer-insight-growth-building-better-ci-capability.aspx [Accessed 24 Aug 2018];

2. Barton, C., Koslow, L., Dhar,R., Chardwick, S., Reeves, M. (2016). Why Companies Can’t Turn Customer Insights Into Growth. The Boston Consulting Group. Available at:  https://www.bcg.com/publications/2016/center-customer-insight-growth-building-better-ci-capability.aspx [Accessed 24 Aug 2018]

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