Insight-driven companies are setting the pace of business today. According to Forrester, this new class of companies is growing faster than the average global GDP. Collectively, they are set to make $1.8 trillion annually by 2021.
Recognizing the importance of becoming insight-driven, companies are investing billions of dollars in data collection and analysis. However, many companies are confusing “data-driven” with “insight-driven.” Having more data doesn’t necessarily mean you have insight.
According to Forrester, insight-driven companies have different DNA. Businesses like Etsy and Tesla have built systematic processes to capture insight. They recognize that to drive corporate KPIs, insight needs to be actionable. Experimentation and continuous cycles of testing and optimization are common in insight-driven businesses.
But there’s more to these companies. At Vision Critical, our software has been used by thousands of brands over 15 years, and we have built a deep pedigree in market research. Time and time again, we have seen some common roadblocks that stop companies from becoming a truly insight-driven engine.
Research and Voice of Customer leaders are in a position to help tackle these challenges. But recognizing that these issues exist is an important first step.
Lack of Authentic Customer Relationships
In an effort to be more insight-driven, companies are investing significant resources in extracting information from customers as effectively as possible. This extraction mindset worked for companies for decades, but it is no longer effective. When interacting with brands, digital-first customers expect engagement, personalization and authenticity—characteristics that are not necessarily associated with traditional market research.
Companies need to recognize that customers are more than just numbers on a spreadsheet. Why? Because if customers refuse to participate and provide their feedback, it’s impossible to get quality data and real insight. Authentic customer relationships are absolutely fundamental to the creation of an insight-driven business.
From our perspective, a relationship-based approach to gathering customer intelligence is what Forrester really means when it says you must change your DNA. Building an insight-driven company requires a mindset shift—one that focuses on delivering real value to customers.
The simplest way to create customer relationships is to demonstrate that your customers’ feedback has been heard and acted on. At Vision Critical, we advocate for “share backs”: providing information back to the customers that communicates how their feedback is helping the brand improve. This back-and-forth creates a mutual exchange of value that drives engagement up and delivers better customer insight over time.
Lack of the Right Data
More data doesn’t matter if it isn’t the right data.
You can’t be insight-driven unless you pursue all the relevant data, according to Forrester. In our experience, many data-aware businesses lean too heavily on transactional data, forgoing the strategic importance of a deeper understanding of their customers’ attitudes, emotions and intent.
“A detailed emotions analysis adds a layer of predictive insight,” says Anjali Lai, data analyst at Forrester. “Emotions are fundamental drivers of [customer] decision making, spark unique behavioral outcomes, and are ‘nudgeable,’ as they can draw consumers into a brand’s experience.”
Building on Lai’s point, we believe that the real power of attitude, emotion and intent data is its ability to drive differentiation. That’s because this type of data illuminates something transactional data alone can’t: why people make the decisions they do. This “why” provides context to transactional data and reveals how an experience makes a customer feel, which Forrester found is the number one factor in customer loyalty. Understanding customer emotion drives differentiation in the experience economy and is an essential part of becoming an insight-driven company.
Lack of a Unified View of the Customer
Delivering agile, high quality insight in all areas of your business requires a unified view of the customer. Unfortunately, most companies don’t have this holistic view of the customer because of data silos. In many companies, attitude, emotion and intent data has historically been incomplete or stored separately from transactional data.
At Vision Critical, addressing this challenge has been a key driver to the evolution of our customer intelligence platform. We believe that connecting attitude, emotion and intent data to the broader transactional data ecosystem is foundational to really understanding your customers and, ultimately, delivering higher quality insight. By connecting data silos, many companies that work with Vision Critical have been able to develop richer customer profiles and segmentation, create more relevant messaging and gather customer-focused intelligence.
The Payoff for Insight-Driven Brands
Investing in a relationship-based approach to customer intelligence and in uncovering the “why” behind transactional data delivers business value. According to a Forrester study commissioned by Vision Critical, companies that have adopted this approach as part of their journey to becoming truly insight-driven could see substantial impact. The study indicates that a composite organization utilizing Vision Critical’s platform to build secure, double opt-in, online customer communities saw $1.7 million in value from increased customer insight, $2.9 million in research cost savings and a 590% ROI with almost immediate payback.
Making the leap from being data-driven to insight-driven does come with challenges, but the journey is worth it. In fact, the consequence of not making the change is potentially devastating.
“The focus that insights-driven businesses place on winning, serving, and retaining customers means they are coming after your customers and your revenue,” warns Forrester in a 2017 report. “That’s why being insights-driven matters: It’s a competitive differentiator that will make or break your long-term success.”
To learn more about creating an insight-driven business and the role of market research in it, please join me in an upcoming webinar featuring Michelle Bishop, principal analyst from Forrester Consulting.