Be Consumer Fit. Insights-Driven Organisations Grow 8 Times Faster than Global GDP

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What’s your customer ‘normal’ and how can you stay on top of it?

I read a headline the other day saying that we have “normalised lockdown”. Normal must be one of the most used terms in 2020. I hadn’t thought about lockdown as being my normal, but I guess now it is.

First came the outbreak and the imposed normal, then came restrictions and severe lockdown, then came an easing of lockdown, now there’s fear of a complete easing with schools going back this week and a potential second wave.

On reflection, there are many versions of normal – old normal, new normal, what life was like before the pandemic, what it has been like during lockdown, what it’s like now and speculation about what a COVID-free life might be like. So, the relaxed lockdown, as it currently stands, is our ‘new (temporary?) normal’?

We’ve all been forced to change our habits and behaviour. Does this prolonged break (from our old norm) mean that we may never go back to them again? According to a BritainThinks survey only 12% of Britons want life to go back to our previous ‘normal’ anyway.

Know thy customer normal

Life at the moment is unpredictable and uncertain. No one could have anticipated what 2020 would be like. But one thing that I am certain of, is that Companies who are geared up to leverage insight and understanding of their customers based on their reality of the time (and not the past), will be the winners. Those successful organisations typically have an insights mindset, whereby they detect, anticipate, disseminate and are therefore able to respond to the ‘new normal’ or next normal.

Gaining insight isn’t best done through one-off activities or traditional market research-type studies. Organisations need a systematic approach to consumer insight, supported by talented individuals and the right technology. Whether it’s an ‘Insight Centre of Excellence’, an Insight ‘Hub’ or ‘Insights Engine’, organisations need a customer insight-driven culture whereby they build and unleash insights and data within the organisation and those insights are prioritised in decision-making.

Be an Insight-Driven Business – or not

Forrester talked about the arrival of a new kind of company about 5 years ago and how they would set the pace for global growth.

“A new kind of company — we call them insights-driven businesses — has formed. They are growing at an average of more than 30% annually and are on track to earn $1.8 trillion by 2021. These customer-obsessed firms systematically harness insights across their organization and implement them to create competitive advantage through software.”

They found that insight-driven organizations were growing eight times faster than the global GDP and at 30% year-over-year. Insight would appear to be a differentiator and source of competitive advantage.

However, according to BCG – despite awareness of the importance of gathering and acting on consumer insight (CI), their research showed that companies use CI in less than half of 30-plus business decisions and core processes.

Create your Insight ‘Engine’

There was a big study done in 2015, led by Kantar, which is still relevant, and it was aptly called Insights2020. Researchers conducted in-depth interviews with more than 350 businesses along with online surveys of more than 10,000 practitioners in 60 countries. Respondents were divided into two groups—overperformers and underperformers—based on their companies’ three-year revenue growth relative to their competitors.

The findings proved a strong correlation between customer centricity and revenue growth. It identified essential features of high-performing, customer-centric organisations which fit into three broad categories:

  • a superior ability to provide a consistent, personalised, meaningful experience across all touchpoints;
  • a singular commitment from every department to meeting customer needs; and
  • the presence of an insights engine.

This was typically an independent ‘function’ that participated fully in business planning and organisational strategy (rather than an offshoot of a marketing department). Of these three categories, the insights engine had the largest impact on revenue growth.

Why hard to do?

Some of the barriers to customer-driven decision-making are the same or similar to many other customer and customer experience issues: insight being generated and hoarded in silos with little collaboration, legacy systems and structures, limited critical capabilities, and lots of time and money spent on gaining insight (and focus on the detail of the data) but not its actionability.

Here are some numbers to support the size of the issue:

The reason insight is not being continuously generated, shared, and acted upon, goes beyond systems and processes. There are also issues with structure, mindset, and priority – or lack of.

Other things affecting consumer insight-driven decision-making are:

  • No direct line into the top: when did you last see a customer insight person reporting directly to the CEO – it happens, but it’s rare? They are not normally anywhere near when key decisions are being made (according to Insights2020 only 29% do)
  • Consumer insight has also historically been run as an isolated ‘function’ – rather than a mindset, culture and systematic way of working across the whole business, serving many stakeholders’ needs
  • A reactive rather than proactive approach – as a business ‘service’, the insight ‘function’ often is there to respond to, rather than initiate consumer-related explorations and activity themselves
  • Insights aren’t connected – an insights organisation can generate and uncover many insights and studies over time, but these are often seen as individual, answering a certain set of underlying questions and leading to new studies rather than looking at existing insights within the business
  • There can be a lack of insight thought leaders who are more commercially oriented individuals rather than technical experts

Proactively and consistently acting on insight

Insight has played a huge role in the reshaping of financial products. Monzo is an interesting example. That business was only set up in 2015, the same year as the Insight2020 study. As of February 2020, it was reported to have 3.9m customers (just over 1 in every 16 people in the UK as a customer) and its revenue grew by 241% year-on-year.

This is what they say:

“Our mission at Monzo is to make banking better for one billion people, and a large part of achieving that involves solving existing problems. When we started out almost three years ago, we began by identifying all the pain points customers encounter when dealing with their traditional banks and designing features to eliminate them.”

Even at Monzo, by their own admission they fell into commonplace insight traps as they began to scale the business: pockets of research knowledge hidden within the company, or kept in individual’s heads, insights not being captured and shared, duplicating efforts, wasting time, missing important nuggets of insight and (the risk of) making decisions based on misinformed hunches.

They’ve since implemented more consistent and systematic insight processes that involve the whole business so that team can stay in touch with the customer: Testing Tuesdays, user interviews, explorative research, chat conversations, community forum. Their priority was to then find a way to share and store the feedback they acquire through different channels, keep it in one central place for the benefit of everyone at Monzo.

These insight sources aren’t revolutionary, but what makes Monzo different is how knowledge is shared amongst peers and how it finds ways to proactively and consistently tap into customers’ needs (and customers’new normal).

Use insights to navigate this changing consumer landscape

How do you go about adapting, not just reacting, to changes that we cannot anticipate, and respond in an appropriate and relevant way?

  1. Insight Eco-system: establish a process and system to avoid one-off research. Find a way to bring together the insights model from insight generation, collation, dissemination, activation, communication, integration to bring together data and learning across the organisation
  2. Insight Leadership: Insight can’t be an add-on to a department. It should be fundamental to strategic planning and work closely with the board and CEO.
  3. Insight Inspiration: There needs to be a focus on excellence, best practice, and thought leadership (rather than simply responding to requests from around the business).
    Create points of view about consumers that can be shared and used as a catalyst or incubator for action and improvement. The insights team needs to be the source of creative inspiration and guidance on critical and day to day decision-making
  4. Insight Talent: according to the Insights2020 study back in 2015, “the skills needed to be an insight-driven business were storytelling, ‘wholebrain’ thinking and business sense”. This still holds true. The best insight individuals that I work with have these things in bucket loads. And they are few and far between. Businesses need to seek out people with these kinds of skills rather than solely market research expertise
    Provide training and support to enable the whole business to work with and act upon insight for example communication and visualisation skills are becoming increasingly important
  5. Insight Digitisation: there is an overwhelming raft of tools now available to digitise, store, provide access to and automate insights so that people can self-serve insight within the business. But until you’ve built your framework and established your system/process, you won’t know what’s right for your company. Ensure that the tools you choose will enable you to take action with more predictive, smarter, and more granular insights.

I saw a Brandwatch ad – be consumer fit – Adapt and win with consumer research

Be Consumer Fit.

Be Normal fit. Being a truly insight-driven business, where insights are used for key decisions and change, will help you be Consumer Fit.

One thing is now becoming more certain, the current Lockdown Normal is not here to stay. What will our new normal be tomorrow?

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