According to Forrester, our world is abundant in data but lacking in true insights. Although many companies claim to prioritize their customers and possess a deep understanding of them, the reality is that they often have a surplus of data, some knowledge, and very few valuable insights. This results in a limited ability to truly understand their customers' needs and behaviors.

What is Customer Insight?

When asked to explain Customer Insight in simple terms, I describe it as "the hidden obvious". It's something that may not be immediately apparent but becomes clear and makes perfect sense when it's brought to your attention.

Having strong Customer Insights within your company, and effectively sharing them, can help cultivate a sense of understanding and empathy for your customers. This can lead to the creation of more valuable and innovative products and services.

During my time at Unilever's detergent category, specifically with Persil, we made an interesting observation while observing mothers and their children. We noticed that mothers viewed dirt in the context of children as something positive. They were proud of their children coming home dirty after playing outside.

children in the rain

This realization was groundbreaking as it disrupted the mundane detergent market with a fresh branding strategy known as "Dirt is Good" for Persil. This strategy has resulted in double-digit growth for the category for several years.

Studies reveal that a mere 5% of current businesses possess a strong customer intuition. Companies like IBM and Procter & Gamble, which have developed this skill, are thriving in terms of innovation and customer satisfaction.

Here's an interesting case of how Carlsberg, a Danish brewing company and one of the top 5 brewers globally, developed disruptive innovation through customer instinct. Carlsberg is also a major brewer in the UK.

Carlsberg took a customer-centric approach by developing an extensive advice portal for its on-trade customers (B-to-B) on its 'We deliver more' website. This effort was a big step forward for the company.

The website provides customers with various services, such as training and planning tools, that may not typically be associated with a beverage brand. Additionally, it generates revenue for the company. The marketing director of Carlsberg emphasizes the importance of having insight, a strong desire to learn and understand the customer's business, and the determination to take action in order to achieve success.

How can Customer Instinct aid in successful innovation?

Henry Ford provides insight with his statement, "If I were to ask people what they want, they would come back to me with a better horse." This response is based on their familiarity with horses as a reference point.

So does that mean it's not possible to gain valuable insights from conversing with customers?

The truth is that simply asking customers what they want may not yield the best results, as many individuals are unaware of their preferences until they are presented with options. Therefore, it may be beneficial to explore alternative approaches rather than relying solely on traditional market research to uncover customers' undisclosed needs.

How to gain Customer Insights?

1. Start with your customers’ “jobs to be done,” not your product or service.

According to Clayton Christensen, it's important to focus on the job that your customers want to accomplish. For example, instead of just selling a drill, you should think about the end goal of creating a hole in the wall or hanging a ladder to capture family memories.

By understanding your customers' needs and goals, you can develop innovative solutions that will make sense and provide real value. So, start by gaining key insights into your customers' "jobs to be done" and then work on creating solutions that match their needs.

2. See, Feel, Think, Do.

The concept of "See, Feel, Think, Do" suggests that observing how actual individuals behave in their everyday routines, in real-life circumstances and in real-time enables us to generate solutions that truly address their requirements.

Observing is often more effective than asking questions, which is why ethnography is becoming a popular market research methodology, even in B-to-B environments.

3. Make customers your friends.

The traditional methods of gaining insights through ad-hoc research, such as focus groups and surveys, are no longer effective. The new approach is to establish an ongoing dialogue with your customers.

Develop a friendly relationship with your customers by engaging them in co-creation and inviting them to participate in your open innovation platform.

It is important to approach the situation with empathy rather than solely relying on logic. Collaborate as much as possible with them to achieve mutual success.

Online market research communities, also known as MROCs, are becoming increasingly popular for conducting research and connecting with customers. Essentially, an MROC is a private community where customers can share observations and engage in conversations. These communities provide quicker, more cost-effective insights to inspire innovation and improve relationships with customers. MROCs are especially valuable in a business-to-business (B2B) setting, where personal connections and relationships are crucial.

4. Approach the right customer in the right stage at the right time.

Imagine you have a new product idea and you want to know if it will be useful for people's job needs. Additionally, you want to determine what will be successful, what won't be, and what other features are necessary for a successful launch. But can any customer provide this feedback? As it turns out, you need to focus on emergent customers.

Studies indicate that emergent customers are skilled in identifying and enhancing concepts that have greater appeal to the market. They possess a distinct ability to envision how these concepts can be further developed to succeed in the mainstream marketplace.

Sounds pretty valuable, right? What are these traits that define a customer’s emergent nature?

  • Openness to new experiences and ideas.
  • Reflective nature.
  • Experiental and rational processing style.
  • Ability to process information both verbally and visually.
  • High level of creativity.
  • Optimism.

If you're looking to engage customers in your innovation platform, you should seek out Lead users. These are the customers who use products under more challenging conditions than the majority.

For instance, 3M examined the requirements of field hospitals in combat zones to develop improved hygiene-related products for the operating room. In difficult situations, users frequently have to adapt products to overcome their shortcomings.

Eric von Hippel cited an example of lead user surgeons who had customized equipment and materials to meet their specific needs. These modifications were necessary because the standard products available in the market were inadequate. Interestingly, around 50% of these innovations were eventually adopted by big manufacturing firms.

Another instance of lead user innovation was observed when 3M compared ideas generated by their lead users and "general" customers. The company found that the ideas proposed by lead users were more original and catered to newer customer needs. These ideas also had a higher market share, greater potential to evolve into a complete product line, and were strategically more important than those suggested by non-lead users.

Find these users, make them your friends in MROCs, and learn where your market is going!

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