The buzz around data analytics has been steadily increasing as technological advances make it possible to track,store, and model more and more information, and as vendors pop up based around those services. What are the implications of this buzz for insight functions? How can we take advantage of new capabilities, but without drowning in data?

Conversations with members have raised challenges and lessons around organizing analytics resources – both in terms of organizational structure and incorporating it into research projects.  A few of our interesting findings:

• Don’t forget the business acumen: Business acumen, quantitative skills, and technical skills are the key skills required in this team. Business acumen, in particular, stands out as an underappreciated skill within analytics groups.
• Consider “buying” specialized quant skills: A high degree of business acumen, coupled with competence in quantitative analysis and basic technical skills, makes a good analytics team member. Specialized quantitative skills can be “rented” from external vendors.

Learn more about organizing and staffing an analytics team.

• Don’t analyze in isolation: Although analytics can produce some value when done in isolation, combining it with other market research sources is more impactful. Alone, it lacks visibility into consumer psychology, limiting its use for consumer insight.
• Integrate people, not methods: Instead of trying to integrate the analytics methodology with other primary and secondary methodologies, integrate the people responsible for different methodologies.

Learn more about integrating analytics with other methodologies.

In a recent HBR blog Eddie Yoon of The Cambridge Group outlines the use of psychological drawings to help executives connect with consumer feedback.  With this methodology you engage consumers with the same topics you’d normally research, but rather than seeking interview responses, he asks respondents to create cartoons representing themselves, others, and/or the brand.  These materials provide visual insights to executives, delivering quick, intuitive, and arresting messages about how their company is perceived.

From collaging and storytelling to eye tracking and skin response, researchers are always looking to expand their arsenal, particularly when it comes to understanding and communicating hidden drivers in customer behavior.  Traditional surveys give way to biometrics and hypnosis in the hopes of understanding decision processes that the consumers themselves don’t even know they engage in.  And once you’ve uncovered something new it’s your job to translate sub- or un-conscious consumer drivers into conscious business decisions that will change behaviors and thought processes that consumers don’t know are happening.  All in a day’s work, right?

Putting customer insight at the heart of your business is what Research is all about, and we know that companies with a distinct customer focus significantly outperform their competitors.  That’s why Communication and Consultation development is one of the main areas of focus for the Board.  Different business partners need different communication strategies, and we’re always working to uncover new practices to help you improve your impact on the organization.  You need to customize your communication strategies so that you increase your influence in face-to-face interactions while also creating scalable communications to deliver relevant insights throughout your broader organization.  Which skill do you think is more important for the researcher function?

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By Kirsten Robinson

Chances are your company doesn’t give pricing decisions the analysis it should. In fact, only slightly more than half of organizations incorporate strategic thinking into their pricing practices—a habit that too often leaves money on the table.

At leading companies, Research teams play a pivotal role partnering with Sales and Marketing to influence pricing strategy.

There are three key steps to get involved in:

1. Prioritizing areas to conduct further pricing research. Companies need to first identify the offerings that provide added or differentiated value on which they can capitalize. Value-based pricing (VBP) gives a close evaluation of what a customer will pay—but not all products are created equal, and resources need to be distributed accordingly. High-level assessments enable companies to see which products only need a simple pricing model, and where to dedicate more resources to pricing analysis.

2. Analyzing customer values and willingness to pay. After high-value offers have been established, Research should work to identify what customers value about an offering, how much they’re willing to pay for it, and how those value drivers differ by segment. Discovering customer willingness to pay (WTP) gives Research further insights on its pricing decision process—and also helps solidify buy-in with others in the organization.

3. Persuading key stakeholders. Research must effectively persuade internal and external stakeholders by communicating both the price and a reason for the price. In the B2C world, this means remaining transparent and engaging customers when changing pricing. For the internal and external B2B set, persuasion comes down to showing the impact on the bottom line.

MREB members, learn more about building a pricing strategy, and join our discussion on competitive pricing suppliers.

China is the world’s most populous country and the fastest-growing economy.  With 1.3 Billion people, it’s a giant piece of future market potential for global brands.  As marketers try to tap into the growth offered by the Chinese market, many are watching Chinese brands beat them to the punch, making rapid inroads into established, western markets.   Haier is a noteworthy example: an established home appliance brand in China, this brand has carved out a prominent space in the highly competitive US appliance market.  Watching Haier we can learn a few lessons that might inform our own strategies for entering growth markets outside of our current footprint:

• Finding White Space: Haier Group made initial inroads in the U.S. market by focusing on novel product categories such as refrigerated wine cellars; Haier has since captured 50% of the market for these devices, gaining a foothold that they can use to migrate from niche to big ticket purchases.
• Leveraging The Halo Effect: After establishing itself in compact refrigerators and wine coolers, the company has entered other categories—it now sells 2% of all full-size refrigerators in the U.S., 16% of window air conditioners, and recently introduced a line of flat-screen TVs and DVD players.
• Playing to Local Perceptions: The name Haier was adapted from German to deliberately obscure the company’s Chinese origins and play to North American perceptions of German quality and reliability.

So what about western brands entering the Chinese market?  Join Iconoculture’s lead Consumer Strategist covering East Asia, Jeff Yang on May 3^rd, for an overview of recent trends, developments, and shifts in consumer behavior in China. We’ll unpack the unique “cultural DNA” of this incredible market and take a closer look at brands that have successfully captured the mindshare of Chinese consumers. Board members can register here.

For a quick look into what consumers are doing in China, Board members can also check out a few of Iconoculture’s latest global consumer observations.

By Anthony Bell

Emerging markets will certainly be the driving force behind any growth in consumer demand across the next decade. The Economist Intelligence Unit’s five-year compounded growth rate for 2014 to 2020 shows that average private consumption per country in the BRIC group could quadruple to surpass those of the G7 nations, and shows that total private consumption in emerging markets will likely triple its current level to match the G7 countries in 2020. Although most of the growth will come from elsewhere, rich world consumers will still undertake the lion’s share of global spending across the next 10 years. The chart below shows that, on current trends, the U.S. will still be home to the world’s most active consumers in 2020 but that China, India, Russia, and Brazil will all have joined the top 10.

Chart 1: Top nations by consumption, 2009 and 2020 Economist Intelligence Unit, Corporate Executive Board Research

This means that firms should continue to pour time and effort into understanding and operating in emerging markets, both the obvious ones, such as the BRICs, and some of the less obvious (Indonesia, Chile, and Thailand for example). But they shouldn’t neglect their developed-world consumers, who will still account for a high proportion of firms’ revenues. These consumers’ tastes might change over time but they’ll still reward firms handsomely for providing good products and services at the right price.

It is difficult to make an accurate one-year projection, let alone an accurate 10-year projection but Research has become adept at identifying important market changes. The challenge is, however, while Research is the voice for insight into future market conditions, we struggles to drive stakeholder action. Progressive research organizations have shifted trends conversations away from abstract mega-trend ideas to more vetted market opportunities that provide better context for business decisions. Instead of boiling the ocean, with a broad net across the market, refocus your change-sensing efforts to identify a manageable number of new opportunities grounded in analysis of the company’s market share. A customer driven scenario ranking grid is a good way to prioritize potential scenarios’ likelihood based on customer views to ground discussions around market scenarios’ probabilities rather than internal perceptions. Research will be in the driver seat as company’s pay more attention to emerging markets in the next decade. We just have to make sure we deliver on the right opportunities, rather than mega-trends, to provide line partners with the confidence and context necessary to act.

A recent HBR article outlines how the mayor of Lima designed a unique, modular hospital system to address high mortality rates and accommodate impoverished citizens.  Peruvians have learned how to innovate on a tight budget: using their understanding of customer behavior and needs to create appropriate products and services, the country has seen steady growth in the last few years.

Companies can learn a valuable lesson from the Lima hospital example. As the HBR article explains, one of the main reasons for Peruvians’ economic success is that they understand how perceptions of value differ across different market segments and geographical locations. And, as we know, business decisions like building a successful pricing structure work better when based on an understanding of real value to the customer.

With Market Research working to help decision makers understand customers’ behavior and latent needs, your company can generate long-term growth through “intelligent” innovation and investment decisions.  And for B2B companies, this means working with customers and users to source new ideas.  Recent observations we’ve had in the healthcare industry include:

• DietBet-New Website lets (weight) losers put their money where their mouth is
• Geriatric ER-The emergency room experience retools for elderly patients
• Banning Smokers as Hiring Policy-Employers reach into private lives with “no smokers” hiring bans
• Future Foretold by Your Gene Code-Analyze this: Gene reading is the new predictive science
• Indian Doctors Media-Communication without borders: Indian doctors take to the media
• Big Hospitals in Small Towns-Big hospital chains in India eye small town business

By Anthony Bell

Innovators inevitably face challenges getting their ideas to bear fruit. This blog outlines nine ways that innovators can test their ideas and gain confidence in their innovation decisions. These simple tasks are diagnosing tools to better extract information and ensure you make the right business decision. Here are a couple of quick to do’s:

• Talk to a prospective customer to get their perspective. A Co-opting approach like talking to perspective customers gets you a valued viewpoint that you might not have been thinking about. Customer co-creation goes beyond traditional interpretation means and really pushes ideas. Use a structured process to co-opt consumers from the earliest stages of innovation.
• Go to where prospective customers might hang out and watch them for an hour. Observational research techniques, like studying prospective customers provide research with real-life immersion events that we try to simulate for business partners. Learn how your product feels not just what it looks like with customers. We’ve also seen companies invite specialist users into workshops to discover those latent needs of consumers.

Every research team strives to be more innovative.  Product development and innovation decisions are formed by customer understanding, which is the responsibility of Market Research. From trend identification to product launch, research plays a vital role in focusing R&D on high-priority customer needs. Be proactive by identifying and prioritizing customer needs in order to deliver innovative solutions. The more organized your research team is the more effective you can be in the early stages of product innovation. Innovation is only as strong as the confidence backing those new ideas. Research can help confirm or refine innovation decisions by identifying and assessing the best innovation opportunities, bringing in specialist users who have the ability to collaborate in innovation efforts, and test concepts with existing and prospective customers.

By Anthony Bell

An article from HBR explores the biggest issue facing CEOs, complexity, which inhibits the ability to respond to unanticipated events. While it is easy to blame increasingly complicated business processes on external factors like globalization, all managers need to realize that complex organizational factors are also to blame. Research Managers should be thinking about how they can reduce complexity to drive the most value from their organizational structures. There isn’t one right answer for determining the right organizational structure for your function. While variations of organization structures, from a Central Location Hybrid to a Central Reporting Hybrid offer different benefits, two questions shape the effectiveness of a Research Function’s organization structure:

• Physical Location: Is Research sitting in a central location or with different business partners?
• Reporting Structure: Is Research reporting to a central head of Research or to individual business partners?

Take a look at these detailed organization charts with staff roles and responsibilities to learn more about the benefits and challenges associated with each structure. MREB members, to learn more, visit our Organizational Design Topic Center.

This week’s guest blog comes from our sister program, the Marketing Leadership council. Take a look at the latest survey data examining Business to Business purchase decisions and drivers.

It used to feel like a consultation – customers calling you early on asking how you can help them. Now it feels more like scratching a lottery ticket at the end of the buying process, knowing you can’t alter what’s printed under the security coating – you’ve either been chosen or you’re not. This year, we have heard repeatedly from our members that the B2B purchasing process feels increasingly out of their hands as customers shifted to doing much of the research and comparisons on their own, turning to suppliers only very late in the game. Informally, our B2B members feel that 70% (or thereabout) of the buying process is completely out of their control, and they’re grasping onto the tail end of the purchase process which used to be much more malleable. Is that fear warranted? Read More »

The research team here at the MREB is a few months into our major research initiative for 2011. This year, we’re looking at how Market Research can create a unified view of the customer throughout the organization. While Research often aims to be “the voice of the customer,” in real life that often translates to providing advice to those internal partners who approach Research with disparate business questions – resulting in limited dispersion of fragmented perspectives of the customer. Embedding a consistent customer understanding down to the front-line of the organization will allow Research to impact many more decisions than it does currently.

Through conversations with the membership, we’ve identified a few challenges that Research will face when attempting to unify the view of the customer across the broad organization.

1)Synthesizing existing knowledge into a single story or view of the customer. Research projects, done for specific business partners to answer specific business questions, produce findings that are not widely relevant or applicable to other employees’ needs. There are several challenges associated with synthesis, including:

• Time/skills resourcing – It’s difficult to dedicate time to what is a mostly proactive opportunity . Synthesis skills are not exactly identical with insight generation skills, so it can be hard to find someone who is good at it. Often it is more senior researchers whose skills are needed elsewhere.
• Topic selection – Research’s unfamiliarity with the needs of the broad organization (a fairly new audience for insight) makes it difficult to decide what topic synthesis should be on.

MREB Members, see our existing resources on synthesis – including Motorola’s skill profiles and Alticor’s topic selection methods.

2) Communicating to a broader audience. Market Research has traditionally relied on in person presentations and consultation to communicate research, and that model cannot be replicated to reach the thousands of employees in the broad organization. Challenges in communicating include:

• Understanding/tapping into current information flows – Employees get their information from somewhere, even if it’s not Research. How can Research map and capitalize on the existing flow of information?
• Creating effective mass communications – Researchers have had limited success in using mass communication vehicles (like portals, newsletters) to reach dispersed audiences. Scaled, effective communication must meet employees’ bar for “value.”
• Balancing completeness with ease of comprehension – Researchers will always aim for thoroughness and specificity, but in doing so may get bogged down in details that will cause readers to lose interest. What is the right balance?

MREB Members, see our existing research on communication, including Wellpoint’s organizationally-aligned communications plan and HP’s insights portal.

These are just a few of the challenges that we’ve identified in this terrain. Do you have any others?

MREB Members, you can stay updated on this latest research on our Work in Progress page.