Consumer Insight

A Necessary Evil Click to edit Master subtitle style

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What is Consumer Insight

Customer insight is a process that begins with knowing and understanding what your customers want, and ends with proof of their satisfaction with you as an organization.

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Consumer Insight

Identifying customer needs and expectations, not only of your unique products and services, but also of the level of service you provide Examining your processes and functions to ensure they are customer-centric Encouraging and enabling your employees to be able to focus entirely on the customer

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Implementing actions to improve the customer experience Measuring internal performance, customer behavior and customer perception to determine what further action is required

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Developing Customer Insight includes:

Understanding the explicitly stated or articulated needs of customers and potential customers, but more significantly... Identifying their unarticulated needs

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Articulated Customer Needs Needs that are recognized and communicated (stated) by customers Unarticulated Customer Needs Needs unrecognized by customers that when recognized and satisfied lead to products and services that delight them

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Ways of gaining consumer insight

Using Companies Internal Records Sales Information : marketing managers can look at easily available, reliable and real time sales report to gain how well there product is taken in the market.

Databases, Data warehousing and Data mining Companies organize their data in Databases- consumer databases, product databases etc . For e.g. customer database contains data like customer name, past transactions, demographics etc. and based on it companies rank their customer according to purchase recency, frequency and monetary value.

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Ways of gaining consumer insight

Taking Inputs for sales force :
Many companies encourages sales personnel to provide inputs on improvements as sales team is directly exposed to customers as well as competitors.

Setup customer advisory panel :

Members might include companys largest customers or its most outspoken or sophisticated customers along with highly qualified moderator.

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Ways of gaining consumer insight

Purchase information from outside suppliers : In India we have companies
such as ACNielsen or TAM Media research that provides research data and reports.

Take advantage of government data resources : government agencies from

time to time comes out with host of useful data like population trends, demographic characteristics, agricultural data etc.

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Ways of gaining consumer insight

Motivate distributors and retailers to pass along important intelligence : We can look at WalMart model where it captures data on every item, every customer, for every store and refreshes it every hour.

Use online customer feedback systems : Blogs, review boards,

discussion forums, chat rooms can be used to capture candid opinions and various needs of customers.

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SUCCESSFUL STORIES

iPod- not first entrant in digital music player business but first to get it right
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How consumers want to consume digital music

Insight:
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People want to take all their music with them But yet being Unobtrusive

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SUCCESSFUL STORIES
Eat the middle first and save the chocolate cookie outside for last Insight: Children love what they instinctively discover for themselves: this is simply the best way to eat an Oreo Oreo Double-Stuff for those who just can't get enough of the creamy middle bit

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SUCCESSFUL STORIES
Emami launched first Mens fairness cream segment in 2005 Insight: v Customer research which showed that 25-30% of customers of Fairness creams were men.
v

This insight paved way for a specialized brand for men

Brand became creator and the market leader of this segment

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SUCCESSFUL STORIES
ITC launched Sunfeast Yippee Insight: Some of the noodles in the market become sticky if they are not consumed early

Children prefer to slurp noodles while eating and therefore prefer a longer noodle Many kids add sauce to enhance the taste and look of noodles.

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SUCCESSFUL STORIES

Starbucks: Coffee is not a product but an experience marketed in a third place between home and work Sony Walkman: Redefined the relationship between personal space and private space P&Gs Pampers: Insight about Japanese mothers as being fastidious about personal hygiene, spending a lot of time outside their homes and travelling on public transportation

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Consumer Insight -Need of the Hour

Companies need information about their: Customers needs Marketing environment Competition Limitations of Traditional Market Research Marketing managers do not need more information, they need better information that provides insights, which are useful for decision making.

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Gaining Consumer Insight helps in answering following questions:

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Importance of Consumer Insight:

Envisions a future dramatically different from the present

Targets and develops both long- and short-term innovations Engages the customer as a collaborator, partner and knowledge resource an integral part of the process Thinks offensively and focused on beyond-me-too strategies Challenges business boundaries and explores beyond existing comfort zone where breakthroughs reside

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Importance of Consumer Insight :

Retail profitability is connected to consumer insight -Customer Insight can be used to determine merchandising decisions, determine a technology investment and drive brand relevance to help retailers uniquely differentiate themselves

Firms use customer insights to develop competitive advantage.

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FAILURE

Kelloggs
The concept of eating breakfast cereal a new for the Indian Subcontinent The company faced challenge of not only promoting its product but even the concept of eating cereal for breakfast As the product was expensive consumer bought it cornflakes as one-off novelty purchase Kelloggs remained unwilling to bow to price pressure and decided to launch other products in India, without doing any further research of the market

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FAILURE

New Coke

A classic example of product failure As company decided to scrap Original Coke consumers boycotted New Coke Coca-Cola capitalized on its original status in various advertising campaigns so by launching New Coke, Coca-Cola was therefore contradicting its previous marketing efforts

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FAILURE

McDonalds Arch Deluxe

McDonalds launched this new burger as a more sophisticated option for consumers The target market segment for this product was adults But the working class adults were not ready to pay more for a slightly better tasting burger

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FAILURE

Coca-Cola Blak

A coffee - flavored soft drink introduced by coca-cola in 2006 Launched as an energy drink Poor coffee to coke ratio and bad taste led to failure

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FAILURE

Tata Nano

The Tata Nano is a cause for every Indian to celebrate, but the joy was short lived. Faulty features led to failure of the car

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Advanta ges of Customer Insight

Identifies High-Potential Target Markets to Increase Revenue & Market Share Focused Marketing Efforts on Highest Leverage Activities Increased Lifetime of Customers Loyalty Increased New Business Referrals Reduced Marketing Costs

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Disadvanta ges of Customer Insight

Cost to the Company Time Constraint Dehumanized Maintenance and Repetition Difficult to interpret their requirements

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Consumer Insight : A Failur e

Problem not because of lack of skill of the workers Problems in getting incomplete/incorrect picture of consumer needs

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FAILURE INSIGHT
Targeting Wrong Customers Asking Wrong Questions Failing to act on the information they have Failing to turn Good customer insights they have into great products

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Tar geting Wr ong Customer s

Selection of wrong sample for survey These users might not reflect the true needs of the masses Problem of recognizing who real customers are Focusing only on existing customers and ignoring potential customers Can be avoided by having a truly representative sample Requires great level of intervention by management

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Asking Wr ong Questions

Questions about what they want rather than what they are willing to pay for Can be avoided by having discrete questionnaires of comparing two products

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Not acting on available data

Some kind of bias prevents managers from taking a fair valuation of data The data collected is wasted Can be avoided by having multiple views on the data collected Also by changing or rotating the decision making teams

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Not conver ting good insight to g reat pr oducts

Failure of translation of customer requirement to product specification May be caused due to ignorance to some of the facts collected

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THE PROFESSIONAL DOMAIN OF CONSUMER INSIGHT

Professionally, the domain of consumer insight stretches from market research, into database marketing, into customer service, into any function that deals directly with consumers Where it is used ? Direct marketing Direct Mail Database marketing Customer relationship management

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The relationship between market research and database marketing is often troubled. Database marketers need research to make their work effective Much can be gained by using the information that database marketing generates Consumer insight process helps to change how we think about consumers, staff and our organizations, rather than supports a counterproductive way of thinking about them

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Thank you!!

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