Much has been written about the use of customer and market insights instead of simply generating them. Leading brands typically excel at understanding their customers and markets for developing strategies for sustainable growth, creating superior customer experiences, driving continuous innovation, and increasing the efficiency and impact of their marketing and sales activities.
They see insights as generating the fact base that will enable them, for example, to optimize their offering portfolio, inform their innovation programs, focus their marketing and sales programs, or setting the right prices. Insights reveal what your customers value, to what extent your company delivers it, how customer and market requirements evolve, and which tactics you can deploy to improve your performance relative to your competition.
Based on our consulting engagements and the impact analysis of our work, we dare to say that organizations leveraging customer and market insights typically outperform their peers in two key areas: sales growth and gross margin. Two of the key questions that we often get in this context relate to the key success factors for excelling at this and understanding the relationship between strategy, insights, and competences. So, here are our selected thoughts on the topics.
Insight engines are ingrained in today’s business strategy and stakeholder experiences
The insight engine drives an evidence- and facts-based understanding of your customers’ needs or motivations and – more broadly – of the drivers, trends, and directions of your business environment. It powers business decisions and strategy. It also informs your marketing decisions and activities and sales processes. In summary, the key capability of the insight engine is to produce all the data required for business strategy and for powering more proactive, efficient, and predictive marketing, sales, and customer service.
Treating the insight engine as a pure technical set of capabilities results in an inevitable failure. Above all, it should be seen as a strategic capability including a number of well-known core competencies that can be divided into data, operational, and people competences. Most of these competencies are related to business acumen, organizational culture (building a data-driven culture as part of this), and ways of working that in today’s business can represent a pivotal foundation for competitive differentiation.
In summary, you need to understand what customers really want, what they are likely to want in the future, to what extent they are getting it from your company today, and how you can keep them coming back for more.
The insight engine is powered by competencies
Competencies represent a pivotal set of building blocks when it comes to bridging the gap between data and strategy, i.e., turning raw data into evidence- and facts-based business decisions. More specifically, these are the most critical core competencies required in insight today:
- Data competencies. This is about the ability to extract value from disparate data sources by generating a single-market, single-customer view that is shared and used across your entire business. Data aggregation, data enrichment, data synthesis, and data activation are the key concepts here.
- Operational competencies. Increasingly, this is about a relentless focus on imagining the future and the idea of experimentation. The forward-looking orientation focuses on anticipating and testing future opportunities. Experimentation leverages a test-and-learn approach to identify new business opportunities, inform decisions, and optimize your processes.
- People competencies. This is oftentimes the most diverse and challenging set of competencies. For example, business acumen and business literacy are critical foundational competences in a sense that customer and market understanding are of very limited value to the business, if it does not inform a business decision. The power of story telling should not be underestimated either, as it is related to the ability to communicate insights in a usable, meaningful, and engaging manner.
In summary, leveraging insights is a holistic game. It is about the ability to integrate data, make insights-led decision recommendations, run and scale experiments, and communicate to the business (through the power of story telling). There is oftentimes a big gap between aspiration and reality. Bridging this gap is, of course, completely doable and very critical, as it takes the right strategy and insights to navigate the exponential change we face in our world today.
Dare you try? Based on our experience, we dare say that creating a corporate-level or business unit-specific strategic plan or a marketing and sales playbook that is relevant, insights-driven, and forward-looking and that also considers the concrete competencies and other relevant “enablers” required for its successful roll-out and execution will show up in your top-line and bottom-line growth.