Insights Inform Strategy

Published in the June 2021 edition of Moneywise Magazine.

By Engaged Strategy|2021-06-24T19:41:51+10:00June 15th, 2021|

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Henry Ford, the man who created the first automobile affordable to the middle class American, once said – “If I would ask people what they want, they would come back to me with a better horse.” This is true in most cases because customers mostly have a reference point in what best is available in the market.

We live in a data-rich world. Every company is gathering data today. Even small businesses are busy conducting customer satisfaction surveys to fix immediate problems. Large organisations are flooded with customer data. But what they are lacking in in great insights. And without great insights there is no good customer instinct.

Let me go back to Ford’s statement and explain myself better. The times of Ford were when people primarily rode horses. Cars were the luxury of the elite. There were smart horse-drawn carriages that could travel at faster speeds and had good shock absorbers to reduce the rattling of bones of their passengers. And that was the point of reference for the customer base that Ford was trying to cater to. What Ford did was look at the hidden obvious. He looked at what customers want and added to it what they did not know, but he knew. They wanted comfort and speed. He knew how to replace horses with a 4HP engine.

It is that critical information which is hidden among the stacks of data that gives you that Eureka moment. Let me take you back in time to the Liril advertisement that first hit television sets in 1974. Hindustan Unilever was keen on bringing in a soap that focused on freshness. It brought out a blue coloured soap that showcased mountain freshness, but it didn’t make the cut. Unilever went back to the invention table and added the zing of freshness with lime to a new product – Liril. The soap smelt of freshness. But now was the challenge to market it.

Now remember, 1970s were a time when many women in cities and major towns of India were well educated; yet a fairly large number of them donned the role of home makers, which gave them little ‘me time’. Lintas, the ad agency that created the Liril ad, ran a pre-marketing survey and gathered a lot of data. But the insight that they identified was a game changer. Lintas’ customer research found that those few minutes of bath time was when these women would daydream and relive their fantasies of a carefree life. Lintas swooped in on that piece of insight, turned the bathroom shower into a waterfall and showcased to their customers that carefree life they could enjoy with the freshness of Liril transporting them to a world of their dreams. That year, Liril’s market share grew by 25%, becoming Hindustan Unilever’s top product.

While the market had already become challenging in the 2000s, the post-Covid market has definitely made it more competitive. Customer requirements have changed, and are changing even more rapidly than ever before. They key to stay ahead in this race is to dig deep into their customer experience data and find meaningful insights that can make for disruptive innovations and deliver sustainable growth to the brand.

So where exactly are these insights hidden? They are embedded in that fine relationship between your emotional and functional offerings. Your product may be the best in the market. It is a solid piece that offers longevity and is priced effectively. It is also easily available for purchase across multiple stores. Functionally, it is a fantastic product where your customers enjoy a perfect return on investment. Imagine now that you are tasked with surveying your customers who have purchased this product to understand how likely they are to recommend it to their family and friends. Surprisingly, you receive an average score of three on a scale of five! Drill down to the emotional level and you may begin to find the problem points. They could possibly be the poor experience that customers have with technical support or the delay in responses to emails regarding minor product deficiencies. It may also be an issue with unsupportive staff at just one centre, while all your other centres are probably functioning very well.

In my research for Australia’s banks, it was identified that the difference in Net Promoter Score®* (NPS) between the more favoured bank and the least favoured bank by customers was close to 60 points. This is a massive difference for an NPS program which has a 200 points scale ranging from -100 to +100. Now let me take you a few levels deeper into the insights. If a bank functioned highly efficiently with regard to its operations, it could grow its NPS by up to 56 points. But if its customers were unhappy, its NPS could drop by up to 77 points! And if its customers had any underlying anger associated with the bank, then the NPS could drop by up to 84 points. So even if you are doing well operationally, one or two negative sentiments are enough to damage your brand. This is a serious concern.

Let me give you two more instances of how brands can innovate to cater to customers’ needs even before customers realise they need such a product or service. Air travel was a luxury for a majority of flyers in the United States of America until Southwest Airlines entered the aviation market. Southwest entered with the sole aim of providing affordable air travel. With just that one value proposition, it went on innovate around it. For starters, it removed all the frills of in-flight food and business-class flying experiences. With passenger expectations set for a simplified journey, Southwest went on to focus on its operations to cater to passengers’ requirement to reach their destinations without delay. To enable this, it introduced quicker boarding formats, had its flights in-air most of the time and transferred these savings to its passengers via low-cost tickets.

Now let us look at an opposite scenario. Singapore Airlines is touted as one of the best in the world. While it did what most airlines across the world were also doing, it went a step ahead to improve customer experience. It was the first airline to serve alcohol on-board, the airline offers a warm towel to every passenger once they are seated, and every passenger is made to feel cared for and supported. The experience is the true ROI in this instance.

While Southwest went functional, Singapore Airlines focussed on the emotional. But neither ignored the other aspect of this delicate balance between emotional and functional. Southwest gave customers what they did not know of before – a low-cost air travel experience; Singapore Airlines provided customers a royal experience in the skies. Just by striking a perfect balance between the functional and the emotional, these brands like Liril and Ford, were able to reach a large number of customers in their target markets. And these were ideas that were not provided by customers outwardly, but were brewing right there, hidden below hard data.

Innovating successfully is not easy. However, finding avenues to innovate and improve your success rate is what lies in effective insights management from all the data you have. These are insights that come forth when your survey is cleverly designed to identify customer sentiments rather than just ratings and elicit feedback from customers that can drive innovation. The stronger the insights, the greater will be your grip on innovation which will help you grow a sustainable business.

**NPS®, Net Promoter®, and Net Promoter Score® are registered trademarks of NICE Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.*

Article by Christopher Roberts

Managing Director, Engaged Strategy

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