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Strategic Value of Insights Research – Generating Insights that Innovate Business

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Innovation is hard. At first, a new product may have been germinated by the seed of an idea that grew into a Generation One product success. But, after this initial surge in business was created by the new product, it may falter and die without ongoing innovation. So many have achieved initial success, then failed to meet sustaining expectations and that is why 99% of new products have a limited lifespan.

At the core of generating innovation is insights research. These are perspectives into the lives of customers in B2B markets or those of consumers in B2C markets. These perspectives can be used to generate areas of opportunity that can sustain and even elevate the level of product or service innovation.

Generating insights takes work. Great insights efforts share “success” commonalities, which are:

  1. An unbiased approach to what is working and what is not such that results are not viewed as threatening to the organization in any way,
  2. An open-ness to take ideas from anywhere they originate, including from employees within the company, overcoming the NIH – not invented here – syndrome,
  3. A sensitivity to observe the usage nuances of the product or service in such a way that gaps in benefit delivery can be distilled out…a result that may allow the addition of features and capabilities intended please the customer,
  4. The ability to rationalize the most important opportunities in terms of investment in their delivery vs. their potential payback in incremental profitable revenue.

Fortunately there are some evolving tools that can deliver great insights. They are not only proven, they have been used to generate significant value. Here are four major insights tools that are currently in use, along with an example of how each is being utilized.

1.9 - Post Pic21.      Social Listening  — a powerful new tool enabled by setting filters to “listen” to conversations about your product, the purpose it serves (and how well on not that is being met), and general comments about the usage category. Social listening tools are set up to monitor electronic communications across the platform spectrum including email, texts, web navigation, blogs, social web site postings, tweets and pretty much anything that goes through the internet.

Example: An appliance brand was interested in learning about likes, dislikes, wants and needs of usage related to refrigerators, ovens, counter-top cooking surfaces and other kitchen appliances they marketed. By listening to the natural discourse of comments, ideas and suggestions being exchanged between people who had interest in these appliances, they were able to make major, highly desirable changes to their product line.

2.      Ethnographic Research – “Ethnography is the branch of anthropology that involves trying to understand how people live their lives. Unlike traditional market researchers, who ask specific questions that carry with them some bias, ethnography is to observe and listen in a non-directed way. Our goal is to see people’s behavior on their terms, not ours. While this observational method may appear inefficient, it enlightens us about the context in which customers would use a new product and the meaning that product might hold in their lives.” (Source: “Ethnographic Research a Key to Strategy”, Harvard Business Review, March 2009)

Examples: Companies such as Intel and Procter & Gamble use ethnographic research extensively. In P&G’s case, this research is conducted by company employees who live with consumers or work alongside retailers. One example of a successful P&G product that came out of this approach is one of a laundry detergent made for Mexican and Latin American households. It solved the problem of reducing the laundering process from five steps to just two and was sold in single use packaging that fit into the weekly budget for low income households.

3.      Process Mapping and TouchPoint Analyses – This approach is highly effective in the B2B environment. It relies on six sigma and/or lean methodologies to reduce the “friction” in the handling of products, services or information between one business partner and another.  This kind of innovation leads to lower overall product costs. The less a highly valued product costs, the more competitive it can be and revenues generally increase.

Example: WalMart is credited with leading the way to reduce supply chain costs in the big box retail segment. Their goal to have a product “touched” only once from the time it is received at a store to the point it is placed on the shelf has saved millions for suppliers and WalMart alike. They accomplished this goal for many product categories by working with suppliers to reconfigure packaging, introduce RFIDs on pallets delivered to the store and create handling capabilities that allows one-person operating a product mover to manage everything.

Examples: Another example is that of a beauty products company. They used this technique to address the time it took to get their products from inception to market. Clearly reductions in time-to-market meant added revenue and a more responsive approach to consumer needs. A comprehensive process mapping effort lead to the identification of numerous bottlenecks. Eliminating these through lean-process work sessions reduced time-to-market by close to 20%.

Insights in the process mapping and touchpoint analysis solution are gained through the development of a detailed knowledge of “what is happening” vs. a future state vision of “what could be.”

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4.      Big Data Analytics – An emerging and perhaps overwhelming capability in creating insights is the use of “big data.”  Big data is a term used by marketing scientists to harness the exponential growth of data, both structured and unstructured.   These data attempt to get as close as possible to understanding what consumers are interested in and the action they take on those interests.  What has been a long standing conundrum in market research is to predict the relationship between what people say they want and what they go out and actually buy.

Example: Big data analytics avoids this issue of intent vs. actual behavior because it measures actual behavior directly.  Researchers follow a person browsing on the internet for mountain climbing gear. They integrate the driving patterns gained by GPS tracking to note when this person frequents stores that sell technical climbing gear. It may be noted from another data source that the person books airfare to faraway lands that are home to big mountains and does so on a certain patterned frequency (presumably when the mountains are climb-able).  A company selling climbing products might then know when to message this individual about their product line, at the time the person is most interested in buying additional or replacing old equipment with new offerings.

Who can employ these techniques?  Any size company can begin using these techniques, whether they be large, small or just a single proprietor.   Tools are available for social listening that can “hear” what is going on globally, nationally or within a single zip code.  Ethnographic research has the ability to be employed to some extent on a “do it yourself” basis, and there are independent consultants that are quite affordable for a small business to engage.

Process mapping and big data may require use of expert resources, particularly in the case of big data analytics. But even these analyses can be in part gleaned from available sources such as google analytics and other web-based applications companies. The key to success in discovering insights and linking them to strategic value is in following the success principles of unbiasedness, open-ness, sensitivity and rationalization.

 

 

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