The Best Methods to Acquire Consumer Insights
Customer insights are not data, facts or statistics; these later items are all knowledge. Insights are the reasons, behaviors, emotions or actions responsible for the data, facts or statistics. As the dictionary definition cites, an insight is "seeing below the surface." Visibility to human behaviors in the form of customer insights (and understanding of the cause and effect relationship) empowers brands to improve product development, customer engagement, offer conversions, customer experiences, repeat purchases and loyalty. But capturing, synthesizing and acting upon customer insights is easier said than done.
As advised by Paul Laughlin of the Institute of Direct and Digital Marketing's Journal, insights deliver "a non-obvious understanding about your customers, which if acted upon, has the potential to change their behavior for mutual benefit."
Business to Business (B2B) purchase decisions are medium or high consideration purchases. They incur a very conscience decision-making process, occur over a lengthy period of time, involve multiple people or buying committees and result in a high dollar expenditure. B2B customer insights are primarily created from market research.
Business to Consumer (B2C) purchase decisions are low consideration purchases. They are typically fast, frequent, impulse purchases made without a conscience decision-making process. Consumers generally cannot tell you why they made a purchase because much or all the decision was made from unconscious behavior. Consumers generally discover, rather than know, what new products they need. B2C customer insights are not created from market research. Instead, brands use a variety of qualitative and quantitative analysis methods that include personas, journey mapping, ethnographic research, empathy interviews, design thinking and surveys (i.e. CSAT, NPS).
Consumer Personas – Generally The Best Starting Point
My prior post described how personas with insights identify the drivers and barriers for the consumption of products and services and when properly constructed reveal when, why and how customers make buying decisions.
Most organizations have sufficient data to obtain insights, but lack the strategy and technologies to synthesize and make the data actionable. Without action, insights are merely interesting.
What makes acting upon consumer insights different than B2B customer insights is their need to be fully automated. Consumer purchase cycles are fast and voluminous so technology must link insights to actions to systemically deliver the right content or response at each customer engagement point or moment of truth. Software technology is required to deliver, measure, refine and scale insight-driven actions. Some common examples of insight-driven actions include purchase propensity modeling, next best offer algorithms, cognitive bots and predictive analytics.
Journey Mapping – Combining Personas with Customer Journeys
Aligning persona journeys with company engagement processes creates insightful context and effective automation.
A customer journey map is a visual representation of customer interactions with your organization. Initial objectives are to understand the customers end to end path in completing a transaction and the customers goal at each touch point. With this information, you can streamline processes, remove pain points, eliminate drop-off conditions, orchestrate effortless progressions and better satisfy customer goals.
Journey maps also help identify siloed operations which complicate processes, create interaction differences among channels or devices, and produce inconsistency and gaps between departments.
When these insights are acted upon the improvements will collectively improve the customer experience and transaction conversions.
Journey maps can get complex as customers engage at different points, there are many onramp and offramp locations and channels, and customer sequence is quite variable. Trying to predict customer movement is less important than trying to satisfy customers at each touch point.
Ethnographic Research – Align Observations with Outcomes
In the wise words of legendary Yankees catcher Yogi Berra, "You can observe a lot by watching."
Consumers generally do not know explicitly why they make low consideration purchases, so watching can be more revealing than asking.
Ethnography is a data collection technique that observes a situation, identifies input or association variables and records the consumer behavior and response. It's not looking for generalized understanding but for quantitative findings where each consumer setting or situation results in a stimulus-response connection or cause and effect relationship.
Situational observation in context delivers empirical evidence of how different types of consumers respond in various conditions. This type of insight can be ranked, modeled, replicated and scaled.
Observing consumers in a monitored setting uncovers how they approach a product, if they evaluate the product and whether they purchase the product, decline the product or seek out an alternative. Online behaviors can use telemetry and digital footprints to record, analyze and produce insights automatically and at scale. In a physical setting manual human analysis may be needed to observe the path to purchase and determine the insights. For example, in a physical setting human observation may be needed to record whether the buyer reviewed package content such as ingredients or warranty, compared the item to nearby items, used a cell phone to compare prices online or get social ratings or reviews, or engaged a retail associate with questions or to assist with the sale.
Empathy Interviews – Good Stories Deliver Good Insights
In summarizing the difficulty of traditional market research interviews with consumers making low consideration purchase decisions, legendary advertising guru David Ogilvy advised, "The trouble with market research is that people don't think how they feel, they don't say what they think, and they don't do what they say."
An alternative to market research is the empathy interview. This type of interview replaces Q&A with consumer provided story telling. It's a listening exercise where the interviewer is fully attentive to the consumers every word and occasionally prompts the consumer to continue speaking, explain their frame of mind, or share an experience, all in the form of a story. The interviewer then extracts the emotional and behavioral elements and relates them to the outcome.
It takes an experienced interviewer, but when correctly performed, uncovers the buyer's subconscious needs and reveals why they took an action, such as making or not making a product purchase.
Except for a leading question which prompts the consumer to tell their story about a purchase or similar event, empathy interviews have no agenda. The point is to get the consumer to talk in order to understand their frame of mind, emotions that play a factor in their decision, what they consider to be relevant or important, and how they go about their task.
In addition to understanding behaviors and emotions, empathy interviews are well suited to uncovering unknown or unstated needs. As Henry Ford said, "If I asked people what they wanted, they would have said faster horses."
Design Thinking – The Shortest Path to the Top Insights
Design thinking is a people-focused design and problem-solving method that applies deep empathy for consumers and collaboration among multi-disciplinary teams to identify what's most important to consumers. It's also used as a design method that considers how to achieve a behavioral or emotional goal, often expressed in the form of a better future situation.
Unlike most other insights acquisition methods, Design Thinking is done in a group-based workshop. It starts by recognizing consumers with personas, then creates persona-based empathy maps followed by documenting As-Is processes. With this data, the cross functional group then performs ideation activities to brainstorm new ideas to old problems or find new ways to replace old problems.
Procter & Gamble used Design Thinking to figure out why younger consumers were not purchasing its Tide detergent. It quickly discovered the top cause was that these consumers believed Tide caused their designer jeans to fade. The result led to a new detergent brand fueling new market growth.
I've led dozens of design thinking workshops and have found them to be the shortest path to revealing the most influential insights. The process is particularly effective in explaining consumer behaviors and actions even when consumers cannot explain themselves.
Focus Groups – They Don’t Really Work
I'd be remiss if I didn't bring up focus groups as a method to generate customer insights. That said, focus groups are a left-over relic from the mass marketing era. Except for a specific use case I'll explain, focus groups are far less effective than other methods.
The primary challenge with focus groups is that they rely on consumers' memories, which quickly deteriorate and are notoriously inaccurate. Another challenge is that focus group participants often exhibit a context-bias or exaggerate responses.
For example, marketers sometimes cite the infamous condom conundrum. Focus groups and surveys about the frequency of sex and use of condoms reveal a condom market four to five times bigger than the market defined by actual sales data. In a similar way, consumers show a propensity to recall favorable experiences with high dollar purchases. This behavior stands in contrast to more immediate survey data, and suggest consumers want to positively rate higher dollar purchases as a means to feel good or justify their decisions.
Another issue is high frequency panelists. Focus group panelists will often respond to as many focus group recruitment ads as possible. According to Persona Panels CEO Patrick Gorman, panelists are often on multiple panels, with one major study finding the average participant is on eight panels. To keep their participation and income alive, Patrick suggests that these people have incentives to say what they think the focus group moderator wants to hear.
The one use case where I've seen success with focus groups is where consumers are asked to compare two or a small number of products. In this scenario the focus group may determine the preferred product among buyers. This is often done as part of a social media marketing program that applies A/B or multivariate testing.
Except for the prior use case, focus groups are prone to selection bias, questionable participant memory and groupthink, and should be replaced with alternate methods.
The Point Is This
While there are several methods to acquire insights, what each insights generation method shares is the quest for understanding and customer empathy. Applying proven insights to the right customer at the right time on the right channel will most certainly improve customer experiences when compared to applying generalized data to a broad audience.
Consumer insights are essential to create products that are embraced, content that will engage, offers that will convert and customer experiences that will deliver repeat purchases.