Preview of 2013 – part 1

Research must make friends to win in the age of the customer

At Forrester Research we talk a lot about “the age of the customer” and optimising customer experience. Why? Simply put, if you’re not obsessed with understanding and aligning with your customer, there’s a competitor – increasingly a digital one, not even on your radar – that will be. And they will take your entire market away from you in the blink of an eye. Just ask Blockbuster or Woolworths or Borders or so many other Goliaths that were felled by a digital David with a half-baked but customer-aligned solution.

The challenge for research departments (and external agencies) is that they must provide customer understanding that ensures successful strategic decisions that keep the company customer-aligned. Unfortunately, based on our research, most of them have a major blind spot: they lack access to the customer intelligence within the transactional data that tells them what customers actually do (versus what they think, feel and intend).
In Forrester’s playbook for market insights professionals we discuss the need to integrate transactional data with data that traditional research groups have.

One of the biggest areas where this is needed is segmentation research. Successful segmentation research not only guides long-term customer strategy and alignment but also provides tactical recommendations on optimising engagement and experience across the customer life cycle. Unfortunately, our research suggests that about 50% of segmentation research projects fail.

First, they fail to prioritise which segments the company should invest in based on the segments’ customer lifetime value, revenue growth rates and margins – all data that can only be found within the transactional database. Second, they fail to provide tactical guidance to key stakeholders across the life cycle on how to optimise engagement with targeted segments – which often needs transactional data to show what has worked.
The result is not pretty. Having shown no (or even negative) ROI on a project that often costs £150,000 or more, the research group must keep its head down for the three to five years it takes for executives to forget this failure. That, of course, makes it hard to push for the budget and headcount increases needed to keep up with stakeholder demands.

Want to avoid this? Our advice is, make friends with those geeky database analysts in the customer intelligence team and find ways to integrate your insights. Then deliver customer profiles and segmentations that provide a deep understanding of what customers think, feel and do.

Richard Evensen is senior analyst at Forrester Research

The best of British

Received wisdom has it that when it comes to Branding British we’ve had enough. After all, you couldn’t move last year without being inundated by promotions smothered in Union Jacks. But with our renowned design skills, craftmanship and manufacturers now being absolutely on trend (though far too established to be dismissed as a passing fad) the Made in Britain stamp offers a clear aspirational point of difference for brand development.

Prime examples were on display at the recent Best of Britannia (BoB) event, a showcase for a range of brands illustrating manufacturing skills currently undergoing a renaissance. Antony Wallis, founder of BoB, said: “What all these manufacturers have in common is an emotional attachment to what they make. Their customers in turn develop an emotional attachment to the objects they buy.” And that, surely, is the key. In an age where we’re constantly told that story brands are where it’s at, the depth and breadth of Britishness continues to offer up a wealth of areas for researchers to explore.

Stories linking our truly extraordinary past – in this instance our manufacturing past – to the dynamic present mean brands from every part of the UK have their own in-built narrative, an authentic and rich source of brand DNA on which to develop solid positionings and engaging propositions. But to uncover this real DNA requires researchers going deeper than purely relying on the overarching bastions of Britishness which famously include our liberalism, tolerance, creativity, humour and individualism.

Sean Pillot de Chenecey is a consultant at Captain Crikey

• See Part 2 of our 2013 preview on Thursday ( 27 December) covering technology, growth markets and mobile research