Tod Norman explains why Insight Sector doesn't deliver profit

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Companies need to work differently to deliver profit and customer centricity from research. If properly included in marketing it would deliver profit and true ‘customer-centricity’ so what exactly is the problem and how can it be solved?

Today integrated communications is the norm, not simply because it works but because brave clients and agencies worked hard to make it work. Yet Insight, a vital part of the marketing mix, still remains un-integrated thereby making the vast majority of companies far less ‘customer centric’ than they claim to be. Integrated properly it would deliver profit and true ‘customer-centricity’ so what exactly is the problem and how can it be solved?

Let’s take a look at various research types and see how things could be different.

First, let’s take Market Research, which is self-limited by one massive factor: it will not link the responses to an individual on a database. We report the prevailing attitudes of ‘Men’, or ‘Heavy Customers’, or ‘Opinion Formers’ – but not the attitudes of John Smith at 123 Westbury Road. Information gathered and insights derived are structurally prevented from ‘joining in’ with any insight that is held at the individual level.

My big question is, ‘Why can’t market research data be merged with other sources, such as transactional or communication databases?’ Well, some researchers believe that such linkage would break the Code of Conduct of the Market Research Society but that is not so. In practice, it’s more likely to be because the MR department and the Database team are structurally and culturally alienated. They don’t work together because they have different budgets, different KPIs, and different personality types. Basically, the topography of the company prevents synthesis.

OK then, now let’s take the Database Industry which is also isolated. It can tell us who bought what, when, where, and how much over what period of time. But, it doesn’t provide insight on why; and thus its power to deliver insight is limited.

While conducting focus groups with Frequent Flyers I discovered that the strongest loyalists were people who had experienced a ‘magic moment’: one man loyally used the national carrier of another country, despite the inconvenience, because 20 years before that, it had got him home for his child’s birthday when he’d been bumped off his normal carrier. All the costly incentives he had received over two decades were wasted expenditure, because the database doesn’t record this. Database departments would argue that including market research, let alone customer service contacts, requires too much time and money. There are more important priorities in recording and analysing ‘hard data’, rather than work on adding less reliable and relevant ‘soft’ information. But, the real reason is the business structure, and the accompanying cultures that grow up within it. Hard data people don’t associate with soft data people, and vice versa. And if anyone from customer service were to consider this metaphor, they probably wouldn’t consider themselves on the map. Most don’t think of themselves as marketers much less insight gathers.

Yet Chuck Longfield – SVP and Chief Scientist at Blackbaud, a leading CRM and database organisations for charities, related the following story in a recent conference. His work in the US indicated that when a regular donor to a charity changed addresses, s/he could leave it to the post office to forward the organisation’s mail, or perhaps return a form to the organisation stating they had moved to a new address. But, if they telephoned to say they were moving, they were 10 times more likely to leave a major gift or bequest to the organisation. There were also huge increases in the likelihood of these gifts if the donor returned a survey. However, because customer service and MR data were not linked to the communications database, these hugely important bits of insight were ignored.

Like many others you may think that you can’t tailor information to every individual. But, try this: set aside the cost efficiencies of digital printing and email, and the use of the Pareto rule in prioritising the people who are most important to communicate with, then add research and a bit of planning…..suddenly the problem is a mole hill rather than a mountain. Add just two data fields – one to record the number of customer service contacts and/or survey responders and another to record a simple ‘Positive/Negative’ outcome. This step alone can channel engaged donors into high potential value communication segments. A bit more thought and more fields could enhance the value even further. Joined up, the various streams become powerful, profit driving insights, rather than insight ‘artefacts’ that stagnate.

A recent heated debate on the Consumer Insight Interest group on Linked In was initiated by the suggestion that one of the world’s largest buyers of research believed that by the end of the decade, survey research would see a massive decline driven by the growth of social media as a primary insight tool. Researchers argued heatedly that the idea was absurd; there was no statistical validation to be had in the comments of bloggers, tweeters, followers or trolls. Whilst social anthropologists and textual analysis programmers from the big ‘listening platform’ agencies hit back arguing that low cost, large scale, honesty and influence of heavy bloggers and tweeters made survey research look like a cruise ship in a world of jet travel. Interestingly, nobody from the database community seemed to enter into the fray….

The debate reminded me that the insight available from online tracking is a fast growing torrent that seldom seems to engage with anyone outside the media planners for this specific channel. On line customers or prospects are all too often seen as ‘different’ from off line folk, and the insights garnered are often seen as only tangentially relevant to anyone else. Once again, within many organisations, the ‘on line team’ are still structurally and culturally different from the Luddites in MR, Database, or Customer Service departments.
Thus little, if any, true insight ‘mixology’ is attempted. A whole new channel of the insight sector – the listening platform arena – is blossoming, and being seen by Industry observers such as Forrester Research as ’essential tools within the enterprise’: but the danger seems that in their excitement with the new, they will be culturally antagonistic towards the vast majority of organisations.

If acted upon, the observations above, could lead to a profound change in company organisation, unblock a few drains and bottlenecks and release an improved revenue stream that is just waiting in the corner like a wallflower hoping for a dance. I know it would be easy to say that the cost in time, in money, in cultural change of integrating all these strands of insight together is too high and that the idea is too fanciful – this I expect. But, in the final analysis, don’t you think it’s about time we had the corporate insight to stop working in silos and instead all play for the same team?

Tod Norman