Understanding customers is crucial to develop winning strategies, create a superior customer experience and drive innovation. These insights tell a company what their customers value, to what extent their business delivers it, how market trends and consumer needs evolve, and which levers they can pull to improve their performance relative to competitors.
A new survey of senior insights professionals from a wide variety of industries by PeriscopeBy McKinsey finds the overwhelming majority of respondents aim to make customer insights (CI) a reality for their businesses. However, less than a quarter describe their CI unit as currently serving as a “thought partner” to their organization, which is defined as highest stage of CI maturity, while more than three quarters of organizations are still in earlier maturity stages (“CI as a counselor” or “CI as a service provider”, respectively).
The firm’s study, The Customer Insights Function is Ripe for a Boost, reveals respondents widely recognize the commercial relevance of insights, but are struggling with attaining that level of CI wisdom:
- 44 percent said that CI is a top marketing and sales priority in their organizations, well ahead of trending topics like digitization (18 percent) and omnichannel (13 percent).
- On average, 65 percent say that CI should be a true thought partner of the entire organization and a driver of transformational change. However, just 23 percent say that their companies have already achieved this level of CI maturity.
- 46 percent say that the CI function is at least a recognized counselor, while 31 percent say that it is no more than a service provider with little or no systematic connection to commercial decision making.
- Only 36 percent have the impression that their companies are already fully geared towards customer centricity.
- 32 percent cite “technology and tools” as a weakness, saying that they needed more innovative methods to develop and leverage insights.
- 30 percent say that “processes” at their companies are insufficient to integrate CI systematically with decision making, and that they don’t have the agility it would take to take continuous advantage of insights.
Despite some negativity from respondents, the majority believe that their companies have both the right strategy and people to unleash the power of insights. People (46 percent) and strategy (39 percent) are perceived as strengths by a clear majority of respondents. This is backed up with how companies define the role of insights employees or the way it is integrated in the hiring process:
- 36 percent consider the majority of their insights employees to be insights consultants, who not only generate and interpret the data, but also act as thought partners for business units.
- 74 percent say that a customer-centric mindset is either “critical” (26 percent) or “very important” (48 percent) during the hiring process.
“Organizations really need to build a stronger, more agile insights muscle, leveraging not only the latest technologies but ensuring such insights will be used for decision making. Only that will enable them to actively steer towards customer centricity and growth.” said Oliver Ehrlich, partner at McKinsey & Company, ion a news release. “Furthermore, to carry Big Data & Analytics from hype to impact, companies need to realize that world-class Customer Insights go hand-in-hand with analytics skills, and build the respective customer insights capabilities.”
Conducted in December 2018, Periscope By McKinsey’s survey included 221 respondents representing a variety of industries. 41 percent are employed by large corporations (10,000 employees or more), with the remaining 59% being from small and medium-sized enterprises. The sample spans all hierarchical levels, including the C-Suite.