FEATURE15 June 2011

Merger plans

Understanding customers requires joined-up thinking. Reineke Reitsma presents a blueprint for building the ‘intelligent enterprise’.

Market insight professionals face a challenge. The amount of data that companies have access to grows constantly and becomes richer every year. From surveys to social media data to web analytics and transactional information, we’re awash with data – yet most organisations still lack an integrated understanding of their customers. A complete view of the customer might never be possible, but a better understanding is achievable with the right organisational structures, processes and technologies.

Today, customer knowledge lives in corners and pockets of the company, with very little systematic translation of disparate data sources into an integrated customer view. Market insight (MI) and customer intelligence (CI) professionals are two key groups trying to understand the customer. Each team typically employs different skill sets, methodologies and data to get to the answers. Where market insight relies mostly on surveys, customer intelligence primarily uses the customer database. This leads to conflicting views of the customer and, frequently, battles for political clout within the organisation.

The impact on the business is bad: internal stakeholders are left trying to separate what customers say (from MI) and what they actually do (from CI) and they struggle to reconcile both views. The longer these teams continue to report contradictory or one-sided views, the more credibility they lose within the organisation.

“Market insight and customer intelligence shouldn’t live in isolation. combining them means more actionable customer satisfaction metrics, better alignment on segmentations and greater revenue”

Thinking ahead
Irrelevance awaits these two professions if they don’t change the way they contribute to the company. Both are contemplating how they can move to a more strategic role and how they can be seen as trusted partners instead of data suppliers. They need to ask: ‘How can my data and knowledge benefit other parts of the organisation? What is the bigger business need that my campaign or my research is informing?’

These two roles shouldn’t live in isolation. The benefits for companies in combining them include more actionable customer satisfaction metrics, better alignment on segmentations across businesses and – ultimately – greater revenue from both higher customer retention and increased customer acquisition.

This collaboration doesn’t mean that market insights will be querying data from the customer database or that customer intelligence will be running research studies. But it does mean that they will work together and become better able to answer business questions regardless of the methods and data used.

This change won’t happen overnight in any organisation. It requires time and considerable transitional steps. From our research we expect clientside firms to evolve through three different stages:

  • Dating: sharing but not integrating. This is a courtship stage where processes will be developed ad hoc and data shared project by project.
  • Engagement: shared processes, separate roles. In this stage, teams will develop standard operating procedures and evaluate where efficiencies can be gained through common technologies, data structures and skill requirements.
  • Marriage: delivering business value through embedded customer knowledge. At this point, all forms of customer knowledge will be managed by a new kind of role – the customer strategist – who reports directly to the CMO or CEO. A single team will act as an advocate for the customer (current or prospective) inside the business and will integrate directly with a broad range of business functions.

Not every company will get past the dating stage. Despite the business value this kind of collaboration delivers, some organisations just aren’t ready, and might never be. Companies that have already managed to get from dating to engagement and even to marriage have one thing in common: a managerial instruction to become more customer-focused. But even with this vision in place, certain industries will be much slower to align. Consumer packaged goods and pharmaceutical firms, for example, are big spenders on market research but have very little customer-level data. Companies like this don’t have much to align with and will instead be concentrating on building up their intelligence function – and with luck involving market insights in this process.

On the flip side, in B2B companies where sales and operations have a significant portion of the customer data, we’ve found that just getting access to this knowledge is the main challenge for market insight professionals. Political problems in these kinds of environments can limit alignment in the long term.

Finally, not every type of research will benefit from this kind of collaboration. Even in organisations where MI and CI teams were at the married stage of this process, research into product innovation and development was still managed by separate teams. The reason: while transactional data provides insight into past usage of similar products, developing something new requires in-depth exploration of customer attitudes and unmet needs. Qualitative research data is much better for these kinds of efforts.

Joining forces isn’t the panacea to all of the challenges facing these two roles. But we predict that most companies will begin to move in this direction over the next three to five years, and market insight professionals must prepare for this. Will they lead this newly developed intelligence team in five years’ time? Probably not. Leaders of these new teams will be business people who can look across multiple data sources and work out what it all means for the business. Market insight professionals will have to build up their skills as business thinkers in the long term. But, regardless, they will play a key role in building the intelligent enterprise.

Reineke Reitsma is vice president and research director at Forrester Research

2 Comments

10 years ago

Many thanks for the article. This has been a key part of our thinking over the past 18 months as we've evolved from Virtual Surveys into Join the Dots. Clearly, the skillset of a market researcher needs to evolve from being just able to deal with primary research data, but also to filter and synthesise information from a variety of sources, and to identify connections between them to give clients the bigger picture.

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10 years ago

Interesting article. Thank you. It occurs to me that much of the thinking and practice related to co-creation that has been developed within (and outside) market research over the last five or more years - which aims to involve consumers in change/innovation - could also be useful in helping to break down these 'competitor' silos within organsations. Of course like all major restructuring, it needs the commitment of senior management and it needs the different organisational silos to see the personal benefist. As they say, Simples!

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