Building a Better Consumer and Customer Insight Capability · Building a Better Customer Insight...

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


Business environment is becoming unpredictable

2. average five years standard deviation of EBIT margin

Source: BCG Analysis , Panel of Listed Companies


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


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.


Mixed

Ranked 1st

Ranked 5th

Ranked 2nd

Ranked 4th

Ranked 3rd

Top 5 capabilities development for the company


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



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


What is important for building an effective Consumer Insight capability

Strategic thinking

Seat-at-the-table

Leadership & talent

Budget



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



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


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..


-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


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


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



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



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...



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?


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


"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



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



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

bcg.com | bcgperspectives.com

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