You think you own your business, but you don’t…customers do.
Their perception determines what you can do, the competitors you can outperform, the trust you can command, and the new business opportunities you can capture. So, to maximise the value of your business, you need to understand what customers really want, what they might want in the future, to what extent they are getting it from your company, and how you can keep them coming back for more.
Insights tell a company what their customers value, to what extent their organisation delivers it, how market trends and consumer needs evolve, and which levers they can pull to improve their performance relative to competitors. According to recent McKinsey & Company research, organisations that leverage customer insights (CI) outperform peers by 85 percent in sales growth and by more than 25 percent in gross margin.
Periscope By McKinsey recently conducted a survey of more than 200 businesses to help better understand the position of CI within their companies. It found that the overwhelming majority said that they aim to make CI a reality for their businesses, with 65 percent saying that CI should be a true “thought partner” (defined as the highest stage of CI maturity) to the entire organisation and a driver of transformational change. In addition, 44 percent said that CI is a top marketing and sales priority in their organisations, well ahead of trending topics like digitisation (18 percent) and omnichannel (13 percent).
While respondents clearly recognise the importance and impact of CI, results show they are struggling with attaining thought partner status. For example:
- 46 percent said that the CI function is a recognised counsellor, while 31 percent said that it is no more than a service provider with little or no systematic connection to commercial decision making.
- Only 36 percent had the impression that their companies are already fully geared towards customer centricity.
- 30 percent said that “processes” at their companies are insufficient to integrate CI systematically with decision making, and that they didn’t have the agility it would take to take continuous advantage of insights.
There is no single reason that the perceived role of insights is lagging at many companies. However, the survey revealed some common threads including a lack of C-level endorsement of insights as a driver of business success.
Businesses need to build a stronger, more agile insights function, leveraging not only the latest technologies but also ensuring such insights will be used for decision making. It’s also crucial for leaders to act as role models and sponsors to support this transformation. Collectively, this will enable businesses to actively steer towards customer centricity and growth.
Time to make CI a true ‘Thought Partner’
To drive growth with insights, CI needs to be recognised in all customer-related processes, from brand positioning and product development to distribution and CRM. When insights are integrated with decision making, they help companies differentiate their brands from those of competitors and sharpen their proposition to the most attractive target groups.
For example, as agile processes take hold across industries, companies bring new products to market ever earlier, often as minimum viable products (MVPs). In this situation, developers are hungry for continuous consumer feedback to iron out the kinks and introduce new varieties. CI also helps decision makers optimise their assortment, choose the right channels, cash in on consumers’ willingness to pay, and determine the most important drivers of loyalty.
An insights transformation is hard work – but it’s well worth the effort involved. Insights enable organisations to give customers what they want, sometimes before they even know they want it. The close link between insights generation and decision making will help companies to create a continuous stream of pleasant surprises for customers who will reward them with more purchases, increased loyalty and recommendations of their products to others.
Click here to read more about the survey’s findings.
The author would like to thank Frank Kressmann, Senior Expert for Marketing and Customer Insights at McKinsey & Company, for his contribution to this article.