Insights Fueling Ideas

Here's some interesting Stats I recieved recently via e-mail from Christopher G. Fox of Bain & Company:

Bain & Company asked over 1200 global executives about their attitudes towards top management tools and trends, and much of the data suggest that executives across industries are showing new seriousness about consumer insight:

•   Nearly 6 in 10 executives are concerned that their products and services are viewed as commodities, i.e., that their value is easily replaceable by cheaper competitors
•   Just over half of executives believe that insufficient consumer insight is hindering their performance
•   Customer loyalty is understood to be an issue, but 44% of executives do not believe their company has a clear vision for how to improve it
•   So-called "soft" issues matter internally as well. 91% of the respondents felt that culture was as important as strategy for business success

Executive anxieties about losing touch with their customers is driving higher and higher usage of customer tools such as CRM and segmentation. These tools have moved from below average use to second and third place, respectively, in the 10 years since Bain has included them in the survey:

•    84% of executives are now using CRM
•    82% are using segmentation to tailor their marketing programs and offerings to groups of customers who exhibit common patterns of behavior
•    New tools are emerging. Use of loyalty management is at 51%, and the use of ethnographic methods to observe customers in the real world is becoming more mainstream, at 35%. But in 2006, each of those tools rank below average in terms of executive satisfaction.

Comments

[Valeria Maltoni]

DA:

We are so on the same wavelength. See what I mean after I publish my weekly FC Expert blog post this morning.

Why don't we talk about who we hire and how we treat them? Those are two key components of supporting the right ideas from the inside into the outside.

CRM and all the other acronyms are tools. What matters is *who* is using them. We should learn to ask the right questions. If I do sound passionate about the human side of work, it's because I am. So many times I have met exceptional individuals -- gifted *and* amazing on a personal level -- who get left behind. And now you have given me the idea for today's post ;-)

[Tony D. Clark]

"Nearly 6 in 10 executives are concerned that their products and services are viewed as commodities..."

This is a common fear that I see regularly with clients. Even services that were considered must-have and cutting-edge just a year ago, are now being looked at as commodities.

3 pieces of advice I give in these situations are:

- Make it uniquely yours. Set it apart using what you can bring to it that no one else can.

- Add some additional value, and keep the price the same.

- Focus on the customer service side, and be recognized for your commitment to customers. People will be loyal, and even pay more, if they know they are cared for.

[Cam Beck]

"Nearly 6 in 10 executives are concerned that their products and services are viewed as commodities..."

And in many (if not most) cases, that's at least a partially accurate description of their offerings. That is a tough hurdle to leap if you're marketing a product or service to the masses, but focusing on satisfying and delighting a small group of passionate, loyal brand ambassadors should prevent the total devaluing of a company's brand identity.

As a test case, it will be interesting to see what happens to the iPod market share after the record labels follow EMI's suit. Apple's loyalists aren't going away. But will that translate to sustained, broad brand value that contributes to continued sales?

[Raimo van der Klein]

Do they really believe that consumer insights are going to solve their problem? The answer is not outside it is inside. Many of these companies just lack purpose. They have not defined their purpose from a holistic viewpoint. Adding this higher purpose fits the new Values Economy and provides means of differentiation.

[Jim Tobin]

I think it was Robert Lauterborn who said: "The only sustainable source of competitive advantage is superior knowledge of the customer." That is profoundly true. Yet our jobs force us to be feature focused to "one-up" the competition. If we really understood our own customers, the competition would never be able to touch us...

~Jim Tobin
http://lifeismarketing.blogspot.com

[Ardath Albee]

Interesting. And, it's great that execs are using CRM, but HOW are they using it?

Is the data in it accurate?

Beyond that, how extensive is the information they know about each customer?

Because, it really is about the customer.

Which begs the question of what they are doing with the information they find in the CRM?

[Mark Earls]

Not so sure I think this rush to CRM and "insight" is as good as some folk seem to. In fact, I know I don't think so.

Behind both of these tags is an insistence that it is market/transaction behaviour that is important in the lives of the people that buy our clients' stuff (and not the real world of 'other people' - Nobel prize winning Thomas Schelling once suggested that most of us spend most of our lives responding to a context which c consists of other individuals responding to a context which consists of other people responding to a context...repeat to fade).

CRM continues to underdeliver for this reason: it is based on a fundamental misunderstanding of human nature and what's important.

The truth is it shouldn't be about the "customer" at all...but about the real people behind the mask. Messy, frustrating, incoherent, unreasonable, impatient but supremely successful social creatures for whom our brands are always going to be of secondary importance (compared to people).

Far more important than we do to them is what they do to each other...

And don't get me started on insight. Too much lazy marketing assumes that insight is itself a commodity to be mined, drilled for or collected on deep-dives; that we need to just to find the insight (and like a clue in a treasure hunt) it'll tell us what to do...

Insight is not something that is found exclusively (or even mostly) inside consumers (contrary to what lots of research vendors and cheap planners will tell you) or even in the data (as the software or consulting vendors will tell you). Dove's revival is based on a "purpose-idea" - a belief about what's wrong with the world of beauty and fashion; Apple's continuing success is based on living up to their founding beliefs - doing the hard thing of making a great product like no-one has seen before...ditto the UK's great retailing success story Tesco.

Time to be honest with ourselves and our clients, methinks...the other way lies madness

[ravi]

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