building a better consumer and customer insight capability a better customer insight capability...
TRANSCRIPT
Building a Better Consumer and Customer
Insight Capability
Nicola Pianon Senior Partner e Managing Director
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 1
Unprecedented & accelerating pace of change Years to achieve one billion users (from launch)
125
13
11
8
5
0 20 40 60 80 100 120 140
Fixed lines
Google users
Mobile broadband subscription
Facebook users
Mobile cellular subscription
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 2
Business environment is becoming unpredictable
2. average five years standard deviation of EBIT margin
Source: BCG Analysis , Panel of Listed Companies
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 3
Customer and growth are top priorities for most senior executives'
Note: Only included top 50 used words, grouped customer and customers; grow and growth
Source: BCG Consumer Insights CEO Survey 2015
Understanding
changing customer
insights – CPG President
Learning more about our
customers – Restaurant & Retail
President
New
customer
base – CPG
President
To provide
exceptional
customer
service - CPG
President
Value proposition to our
customers - Non-CPG COO
Grow customer base – Consumer Financial Services
CEO
Acquisition of
new
customers –
Consumer Financial
Services COO.
Transform the
customer
experience –
Restaurant & Retail
President
Reactivation of the
customer base – Consumer
Financial Services CEO
In respondents' own words, top 5 priorities overall for their company
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 4
Consumer Insight capability considered critical to accelerate growth
411
413
9
114
114 4 11
117
9 7
13
4
13
7
114
9 44
94444
4
0
20
40
60
18
Perform. mgmt.
& measurement
22 24
Business
develop.
Strategic
planning
2
44
33
2
2
27
2
Pricing
analytics
Talent develop. Brand develop.
27
2
% responses
Big data /
customer
analytics
2
Consumer
Insight
27
CRM
20
2 2
Note. Only top 10 out of 30 possible capabilities shown.
Source: BCG Consumer Insights CEO Survey 2015
Mixed
Ranked 1st
Ranked 5th
Ranked 2nd
Ranked 4th
Ranked 3rd
Top 5 capabilities development for the company
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 5
Surprisingly many Consumer Insight still with long way to go to become strategic partners for the business
1 Traditional market
research provider
2 Business
contributor
3 Strategic insight
partner
4
Source of
competitive
advantage
2015: 80% of companies 2015: 20% of companies
• Tactical focus
• Service provider
• Marketing scope
• Insufficient or
inconsistent
budget
• More strategic
focus
• Business
collaborator
• Commercial scope
• Budget input but
no control
• Strategic,
prescriptive
• Trusted advisor
• Cross-functional
• Some budget
control
• Foresight,
predictive
• Ceo-suite partner
• Enterprise
perspective
• Significant budget
and control
Role of consumer /customer insight ("CI") function
Source: BCG Consumer Insights CEO Survey 2015
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 6
1
Despite executive interest, outcomes shows a slow speed of transformation
25
0
75
100
50
100%
Source
of competitive
advantage
5%
Strategic
insight
partners
15%
Business
contributors
Total
% of companies
33%
Traditional
research
Provider
48%
2 3 4
~20% of 2015 participating
companies determined to
be stage 3 & 4 versus
~10% in 2008-09
1. Insights executive, non-CPG consumer company
Source: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 7
What is important for building an effective Consumer Insight capability
Strategic thinking
Seat-at-the-table
Leadership & talent
Budget
Source: BCG Consumer Insights CEO Survey 2015
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 8
0.4
0.3
0.2
0.1
0.0
CI budget as of revenue (median) (%)
Source of
competitive
advantage
0.4
Strategic
insight
partners
0.3
Business
Contributor
0.4
Traditional
Research
Provider
0.2
Overall
0.38
1 2 3 4
Source: BCG, 2016
Budget
Budget is relevant, but is not the most determinant of functional performance and operating model
Company total CI spend by stage
Source: BCG Consumer Insights CEO Survey 2015
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 9
Spending more on consumer insights will not automatically make companies more customer centric
Budget
1Note: Data is from benchmarking of 90+ companies , 30 of which were assessed in depth, conducted in second half of 2015
1. square root of % of business decision influenced by customer insights 2. square root of customer insights budget as a % of sales
Source: BCG Henderson Institute
Company centricity vs. CI spending
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 10
It is more important how and on whom budget is spent Companies feel they are currently wasting about half of their Consumer Insight spend
Note: "CI" defined as practitioners. "Line" defined as senior executives and business partners Source: BCG, Yale CCI and Cambiar 2015 Consumer Insights Benchmarking Study
$2M
$15M
$25M
$35M
$60
M
0 20 40 60 80
CPG
Consumer
durables
Fashion &
apparel
Restaurant
& Retail
% responses (CI only)
Strongly Agree Agree
44%
10%
Auto
Budgeting
Over half of CI research
is reactive to decisions Line has
already made... Which means each year average company in Panel could waste..
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 11
-35-48
-26
3424
50
67
-11
-50
0
50
100
Stage
4
Stage
3
Stage
2
Stage
1
% of all respondents Who measures ROI on Consumer Insight Investments?
Do not measure ROI
Measure ROI
TraditionalResearch
Provider
Business
Contributor Strategic Insight
Partner
Source: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study
The more advanced CI organizations report ROI measurement
Source of competitive
advantage
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 12
Business wants insights that translate into recommendations that are relevant for the strategy of the company
"I'm really encouraging the team to really break out of traditional research methods
and really start experimenting with all of the methods that technology has enabled us to do."
- Marketing executive, CPG
"Consumer Insights is now sought after to be a part of those key strategic meetings and decisions and that's not the
role the organization has played in the past. It was more providing the reports and providing the data"
- Marketing executive, Consumer Durables
"We’ve made a lot of headway in showing strategic value of Consumer Insight ...People used to say, “Just go do this,”...and
we would run off and do it...[Now,] people have seen the value beyond the tactical to more strategic"
- Head of Insights, Restaurant
"Big thing is obviously thinking strategic. We have to think above the tactical and above the technical, broader and wider"
Director, Strategy & Insights, CPG
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Insights groups strive to be strategic partners
Strategic thinking
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 13
36 38
13 12
21 22
-60
-30
0
30
60
(%)
Too much focus
on tactical
studies?
4
Short-term ROI
timeframe?
4
38
34
-60
-30
0
30
60
(%)
Innovation is a
priority in the Budget ?
Agree
Yes
No
✓
✗
Consumer insight projects: often tactical, and not a priority for more than 50% of Companies
Strongly Agree
Disagree
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 14
Satisfied
Companies
Very satisfied
Companies
48
34
19100
50
0
Innovation
Strategic
Tactical
% of CI budget, by objective
34
35
31100
50
0
Historical
Real-time
Forward
looking,
predictive
% of CI budget devoted
to research that is...
All other
Companies
13% 21% 30%
20% 30% 36%
% CI budget
invested
in innovation
% CI budget
invested in
forward-looking
studies
More effective and satisfied consumer insights organizations spend more in innovation and forward-looking purposes
Strategic thinking
Satisfaction with effectiveness of CI on business decisions
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 15
High performing Consumer Insight organizations more likely to have CEO-suite champions ...
% respondents answering CMO or CEO
Most frequent
champion CMO CMO CMO
1 2 3
67
48
37
0
40
80
Traditional Strategic Insight Partners Busines Contributors
Seat-at-the-table
Consumer Insight is actively championed in the CEO -suite by...
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 16
25% 50%
Board has visibility into CI findings +18%
+27%
High performing Consumer Insight organizations more likely to be much more integrated into Exec. Committee
1. "How do senior leaders engage with CI team / leaders" able to select as many that apply. 2. Head of Insights, Non-CPG consumer company Source: BCG, 2016
"Our mantra is to ensure that the voice of the Consumer is heard in every decision...
we really do get invited to have a seat at the table and have these conversations"2
CI act as full member of Exec Comm
CI acts as advisor to Exec Comm
CI acts as presenter at Exec Comm
Senior leaders pose strategic questions to CI team
CI work shared broadly
+18%
+18%
+9%
+17%
Stages 1 & 2
Stages 3 & 4
Seat-at-the-table
How do senior leaders engage with CI teams / leaders?
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 17
Across industries Consumer insights is used only in 40-55% of business decisions
Mo
st
freq
uen
t
top
ics
Least
freq
uen
t
top
ics
40%
Automotive
51%
Restaurants
42%
Non-CPG consumer
Innovation and R&D Innovation and R&D
56%
Consumer durables
% of
decisions
using CI
56%
CPG
Strategic planning New product development Customer experience
42%
Retail
Note. For "Other", top 3topics are "Strategic planning", "Customer experience", and "Product enhancements", whereas bottom three are "M&A", "Store real estate", and "Category management". Source: BCG, Yale CCI, and Cambiar 2015 Consumer Insights Benchmarking Study
Ad campaigns Consumer branding
Brand positioning
Category management Employer branding Portfolio strategy
Risk management Capital investments
M&A M&A
Employee engagement Employee engagement Demand planning
Most common Least common
Seat-at-the-table
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 18
"There’s an insatiable curiosity
which I think is absolutely vital
for this role: Curiosity of the
technology and changes to
the industry and trends, not
just consumer trends, but
ways we can do things
better."
CMO , CPG Leading Company
Best-in-class CI leaders are data-driven, insightful, flexible visionaries, with a strong strategic and business orientation
Leadership & talent
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 19
CI value is in looking ahead vs. backwards, being strategic vs. tactical, proactive vs. reactive, and driving insight vs. reports
Leverage data and
research, to
understand trends in
the market and to
provide insight
4
Are proactive and
focused, but also
flexible as they adapt
to the needs of the
business, and to
external volatility /
change
Are action-oriented,
generating actionable
and dynamic insight
that can actually drive
business results.
In respondents' words, best Consumer Insight teams ...
size indicates frequency
thickness indicates co-
occurrence
Are innovative and
forward-thinking. They
are strategic thinkers
leveraging an analytical
approach, not just order
takers or number
crunchers
Leadership & talent
1
2
3
Source: BCG, Yale CCI a nd Cambiar 2015 Consumer Insights Benchmarking Study
Building a Better Customer Insight Capability ASSIRM vNP 26Ott16.pptx 20
How do companies can get to Consumer Insight excellence?
Start with a strategic plan
Reach out for executive championship
HR as a strategic, transformation partner
Earn greater control of your budget
Measure return on Consumer Insight
investment
Build a Proprietary learning agenda
• At least Two years, to focus on priorities
• Upfront alignment and transparency
• Go beyond the CMO—reach for CEO/CSO/CFO
• Match top talent needs to ideal Consumer Insight profile
• Recruit, develop/train, and retain differently
• Ring-fence strategic research and innovation budget
• And market it internally
• And market it externally
Thank you
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