Rather than putting their money where their mouths are, a recent report tells businesses that claim to be customer-centric to show it by lending more credence to customer insight.
The Consumer's Voice—Can Your Company Hear It?, a report put out by The Boston Consulting Group in November, shows that companies spending more for insight into their customers ($670,000 per full-time market research employee) have poorer strategies than those who pay less ($400,000 per employee). The answer, says the management consulting group, is to put a different strategy in place, backing up those corporate mission statements and annual reports touting commitment to customer centricity.
Instead of the C-suite calling out orders and forcing those employees researching consumers to build reactive, piecemeal reports (almost 90 percent of companies in the study follow a "more traditional approach"), why not gather helpful information, then use the customer insight to increase ROI?
The study shows that 72 percent of the 40 surveyed companies, with sales in the billions, use consumer insight to develop new products and marketing messages. But less than 40 percent use it to help decide pricing, promotional activity and distribution strategy. And only 33 percent use consumer insight to inform their financial forecasts.
What companies can do to improve this picture is build a cross-functional team that includes members of the insight staff, then review the status quo and make recommendations that leverage the findings of internal interviews and surveys. At that point, involve senior leadership and agree on a short-term plan while continuing to work on a long-term goal.
Successful companies focused on customer insight are making sure that senior leadership is responsible for the initiative's success. They also know patience is necessary, talent must be upgraded, company heads must care, consumer insight needs a respected status (a seat in the C-suite) and strategies should evolve.