The Consumer’s Voice—

Can Your Company H

ear It?

The Consumer’s Voice—Can Your Company Hear It?

The Boston Consulting Group (BCG) is a global manage-

-

The Consumer’s Voice—Can Your Company Hear It?

bcg.com

Contents

4

Executive Summary

This study was undertaken by The Boston Con-sulting Group to analyze best practices and gaps in companies’ capabilities for market re-search—or, as many companies now call it, consumer insight.

the results of a comprehensive benchmarking study conducted in the spring of 2009. In all, 40 global companies participat-ed—all industry leaders, each with at least $1.5 billion in sales, and many with sales exceeding $10 billion. The study

-vey of more than 800 executives in both line management

-tive interviews. About 60 percent of the survey respondents were from North America, and the rest were from other re-

-ety of consumer-facing industries, including consumer goods, retail, apparel, technology, travel, banking, and insurance.

Executives talk about the importance of deep con-sumer insight…but struggle to achieve it.

---

-

-sumer-insight capabilities as best in class.

Most companies have not yet unlocked the value of consumer insight.

--

-

Frustrations exist both among line managers and within consumer insight teams.

-

Two critical drivers of success are the engagement model between line management and the insight function and the performance of the insight function.

-

-

Organization structure alone does not drive a better engagement model.

A better engagement model requires a strong con-nection between line management and the insight function.

-

--

-bution channels.

-sure that the insight team has access to senior manage-

the business.

Improving consumer insight is a question not merely of spending more money on research but also of

the most of each study.

-

less

-

-

Some companies have embarked on a transformation journey to modify or enhance consumer insight capa-bilities.

is

-

-

Mary EganKate Man-

fred Ivan Bascle-

Emmanuel Huet

Sharon Marcil

L ---

-

consumer insight. But name changes not-

-ating game-changing insights. Money is spent on research

-

--

--

should

-

in best-practice consumer-insight organizations. The par--

--

-

is

-concurrently -

---

Hearing the Voice of the Consumer

the company.

61

17

13

6

0

20

40

60

80

100

0

20

40

60

80

100

0

20

40

60

80

100Responses (%)

Consumergoods

Financial services

Retail and apparel

Travel

Technology

Industry

3

62

17

7

15

Latin America

Asia-Pacific

Region

Responses (%)

United Statesand Canada

Europe

48

52

Responses (%)

Consumerinsight

Businesslines

Employee type

Industry Region Function

-

no.

-

-

--

-

-

--

-

-

-

-

--

--

-

-

-

-

--

-

-

-

-

--

--

Data Overload:

-

Brand manager in the travel industry

Lack of Integration:

Marketing vice president in a pack-aged-goods company

Reactive, Tactical Approaches:-

packaged-goods company

Lack of Prioritization: -

services industry

-a critical means

business.

To what extent do you agreewith the following statements?

12 21

5153

2515

9 822

Agree

NeutralDisagreeStrongly disagree

Strongly agree

Our consumer insight or marketresearch...

...contributesmaterially toour financial performance

...puts us on a fastergrowth

trajectory

AgreeNeutralDisagreeStrongly disagree

Strongly agree

7 7 8

28 34 35

29 2937

27 2317

8 82Responses (%)

2833

4450

ExcellentAbove average

0

20

40

60

80

100Responses (%)

0

20

40

60

80

100

Developing a deep consumer understanding

Developing a world- class consumer-

insight team

Turning consumer insight into

innovative productsand services

Providing sufficient funds for consumer

insight

Our consumer insight or marketresearch...

...isbest in class

...is a source of

competitiveadvantage

...providesa high ROI

How strong is your company’s currentperformance in each of the following

consumer-insight capabilities?

To what extent do you agree with the following statements?

What are the primary challenges that your organizationfaces in achieving world-class consumer insight?

Responses (%)

Oconsumer insight along a continuum that

--

-

Stage 1: Traditional Market Research Function. --

---

-

--

-

Stage 2: Business Contribution Team. -

-

--

--

Stage 3: Strategic Insight Organization. --

--

--

-

From Cost Center to Source of Competitive Advantage

-

-

Stage 4: Strategic Foresight Organization. --

---

--

-

-

---

-

--

---

Almost 90 percent of companies are in stages 1 and 2

Traditional marketresearch function

Businesscontribution team

Strategic insightorganization

1

2

3

4Strategic foresightorganization

--

pact is seen in

-

shopper insight can translate into strategic partnerships

consumers.

better innovation.

market share gains -

-

their business: Why are customers more loyal to the ---

consumer segment.

-return on investment.

--

--

ment has a strong interest in ensuring that this money

--

---

-

---

-

-

-

-

-

-

Favorable responses1 (%)

35

41

56

54

Favorable responses (“strongly agree” or “agree”) from consumer insight staff only (%)

T engagement model be-

performance of the insight function.

-

canwill

--

-

-

-

--

-

-

The Myth: Organization Structure “Makes or Breaks” the Engagement Model.

-

-

-

-

-

Closing the Gap

High ROI

Insight team’s seat at the table

Insight team says:We can’t have a realimpact on the business without a strong advocateon the business side topull us into strategic discussions.

Business side says:For too long, the insightfunction has been a service provider to the company, so it is difficultto move past thatmindset until they prove what they can deliver.

Insight team performance Business engagement model

6 3 3 17 6Companies using model

Consumer insight teamhoused within business units

Central consumerinsight team

-

--

-

-

The Reality: Four Key Tenets for Improving the En-gagement Model.

-

Ensure an appropriate interface with senior executives. The

---

Move beyond a narrow marketing scope. Many compa--

---

Consumer insight team helps informdecisions regarding...

...new productdevelopment

and innovation

...optimalmarketingmessages

...consumerpricing

...promotionalspending

allocations

...optimalchannel mix

80

Favorable responses1 (%)

74 72

38 3730

0

20

40

60

Vice president of consumer insights, consumer packaged-goods company

Manager of strategy and insights, consumer packaged-goods company

-

Prioritize strategic work and exercise the ability to say “no” to some projects. -

-

-

---

Strongly embed the insight team in the business unit. --

--

-

Market research spending (%)

Industry

---

-

then--

-

-sight FTE actually declined

-

continuum.

Spending and Resource Levels.

-

-

---

-

--

Fortune

and

--

-

-nership.

Investment in People.-

--

Hiring and Talent.

-

Favorable responses1 (%)

0

Spending($thousands)

Market research spending per full-timeemployee in the insight function

Spending per insight FTE islower at companies in moreadvanced stages of insight

800

700

600

500

400

300

200

100

670

400

Stage 1 and 2companies

Stage 3 and 4companies

-

-

-

-

--

right

Career Paths.

--

Training. There is room to enhance capabilities among

-

-

0I received training

within the last six months to improve my consumer-

insight capabilities

I have a clear senseof my future careerprogression within

the company

It is easy to use my current role as a

springboard to biggerroles in the organization

My company has a rotational programfor consumer insight

employees

80

100

60

40

20

43 4235

9

Favorable responses1 (%)

-

-

Deliverables.

-

-

---

-

-

-

--

-

31

33

35

47

50

52

63

0 20 40 60 80

Favorable responses2 (%)

Optimizevendor usage

Synthesizeinsights across

multiplesources

Leveragecustomer and

shopperinsights Provide

megatrendcompass

Drive to the“so what?”

Balance global consistency with

customizationDevelopscalable

capability

Executive vice president of consumer insights and strategy, consumer packaged-goods company

Senior vice president of consumer planning, con-sumer packaged-goods company

Director of marketing, retail and apparel company

--

W -

-

--

processes

-

--

-

Establish co-ownership with business lines.

-

Expect that success takes time. --

Getting Started on a Transformation Journey

-

Commit to make talent changes.--

-

Generate CEO-level buy-in and sponsorship. --

-

Make changes visible. -

-

--

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Learn as you go. --

-

--

-

-and

M

- -

Appendix

-

other

The Boston Consulting Group pub--

Women Want More: How to Capture More Than Your Fair Share of the Female Economy

Winning Consumers Through the Downturn: 2009 BCG Global Report on Consumer Sentiment

Capturing the Green Advantage for Consumer Companies

Trading Up and Down Around the World

Customer Segmentation: A Call to Action

Driving the Bottom Line from the Front Line

For Further Reading

--

Consumer Goods

The Clorox Company

Energizer

Nestlé

PepsiCo

Puig

Financial Services

BMO Financial GroupBNP Paribas Liberty Mutual

Retail and Apparel

The Gap

VF Corp.

Technology

Travel

-

-

-

-

---

Patrick DucasseBCG Paris

Miki Tsusaka

Christine Barton

Ivan BascleBCG Munich

Mary Egan

Note to the Reader

Jean-Manuel Izaret

Stephen Kremser

Carol Liao

Sharon MarcilBCG Washington

Antonella Mei-PochtlerBCG Vienna

Stuart Quickenden

Bernd ZieglerBCG Munich

Emmanuel HuetBCG Paris

Kate ManfredBCG Chicago

For a complete list of BCG publications and information about how to obtain copies, please visit our Web site at www.bcg.com/publications.

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