How to Gain a Competitive Advantage in Customer Insights

Companies spend billions of dollars a year acquiring information about their customers, buying data from market research firms, conducting research after research , and use big data and sophisticated analytical models to make sense of it all. However, much of this data is likely to be available to your competitors and falls short of your desire for meaningful behavioral understanding of your customers. To truly stand out and stay on top, you need to implement a system of privileged insights – the unique and relevant information you get about your customers that only your company knows about. Unlike market research, Privilege Insights provides intelligence about the true needs, desires and experiences of customers. These insights can be obtained in a number of ways. In general, it requires interacting with customers in a way that directly builds trust and value. This may include delivering services and solutions that go beyond products, creating stronger and more engaging customer service experiences, integrating customers into product and service development, and observing and interacting with customers as they use your products. For our recent book Beyond Digital: How Great Leaders Transform their Organizations and Shape the Future , We looked at more than a dozen companies undergoing major transformations to succeed in the digital age, including Adobe, Cleveland Clinic, Citigroup, Eli Lilly, Hitachi, Honeywell, Inditex , Komatsu, Microsoft, Philips, STC Pay, and Titan. It’s not that these companies have to make better use of technology or build consumer data lakes in the first place – it’s that they are very focused on incorporating a deep understanding of their customers into core day-to-day decisions in how they do business models, operate and manufacture. They are passionately focused on adding value to their customers, while absorbing and leveraging a wealth of information that their competitors don’t. By doing so, they are able to further differentiate themselves and remain relevant. How can you build such a system of privileged insights to drive your company’s success? Here are some lessons learned from the companies we researched and those we’ve worked with.

Build the foundation of trust and value

Know how you earn your customers’ trust and engage with you, and the benefits they get from it . This gets to the heart of how customers trust you to consistently deliver the results they value. Customers who see their lives or businesses are intrinsically connected and improved by the services you provide are more likely to engage with you, and are more willing to exchange unique information and gain insight into their core needs and challenges. Building a foundation of trust also includes impeccable clarity on your values, principles and governance of how you will handle customer data. Will you use this data to improve your business position, or to improve customer experience and benefits? Will you be responsible for not misusing data? If something goes wrong, do you strictly enforce it? Leaders must ensure that people across the organization understand that it is not about extracting data from people and turning people into products, but about making customers an integral partner in the value chain. Ashley Still, senior vice president and general manager of digital media at Adobe, is well aware of the company’s guiding principles on how customer data is used: “We are committed to protecting data privacy and being sensitive to how we use data. Use customer data responsibly. A better experience can be created, but once we start using it to gain a tactical advantage, we miss the mark.” Together with the trust and value embedded in the user experience and the value proposition that Adobe provides, These practices lay the foundation for building a privileged insight system.

Integrate the way you gather privileged insights into your daily actions

Make the gathering of insights a part of your interactions with customers and a byproduct of the relationship, not a separate process. This will enable you to gain customer insights while at the same time creating value for them through your physical or digital interactions. This should start with all your existing customer touchpoints (eg, customer service, warranty support, product delivery, etc.) and expand to many new opportunities to engage and improve your value proposition. The final question you need to answer is whether customers feel that the information you collect has a positive impact on you. Think fast fashion company Inditex, owner of the Zara brand. Its retail employees are trained to act as its front-line eyes and ears, tracking data, observing customers and gathering informal impressions — all while helping customers find the styles that work best for them. The store collects information about the choices customers make, their inquiries about lost items, and their recommendations. Are shoppers looking for skirts or pants? Bold or subtle color? These impressions are sent directly to a team of designers and operations specialists at headquarters, along with detailed daily data on what is sold and where it is sold. Combined with deep insights into what people search for and buy online, giving them a distinct advantage over pure online fashion companies. All of these insights are aggregated, aggregated, expanded and analyzed in near real-time and translated into the design of new garments or improved production, logistics and marketing practices. The key is the flexibility to adapt to customer preferences and the precision to create and produce customer requirements at the very moment they demand. By the end of the year, Inditex’s more than 700 designers will have launched 60,000 different ideas, and stores around the world will receive new collections twice a week.

Connect your privileged insights to the way you work

By connecting your privileged insights to your operations – Change structures, processes, incentives, metrics, information flows, and more so that every part of the business can make decisions based on your unique insights. The most obvious (though not always well-executed) example of this involves connecting privileged insights into a company’s innovation process, using them as a basis for ideation, and finding ways to integrate customers into the actual development process in various ways (eg, in a beta pilot). However, privileged insights need to connect to many areas beyond innovation, including identifying investments in tools and technologies that facilitate a continuous experience, interactions with sales and account teams, and your forecasting and strategic planning. Be prepared for these insights that will materially change the foundation of your business, not just lead to incremental changes or new features in some of your products. And reconsider how you measure the impact of your privileged insight capability; the metrics most companies use today are far from enough, and companies pursuing this capability should consider more innovative measures such as return on experience (RoX). Consider Salesforce. From the outset, Salesforce was acutely aware of the need to build its business on trust—not surprising given the sensitivity of the data customers share on the platform. This values-based relationship with users allows companies to gain insight into what is working well, what needs improvement, and what additional services customers want. These insights directly support and fuel Salesforce’s product development strategy and enable the company to expand its value proposition. Being customer-successful is at the heart of Salesforce’s relationships with its customers, and the company has built a unique platform that allows it to drive customer retention and growth by using insights from customer usage data to inform strategies to improve long-term customer value. These insights allow Salesforce to more effectively co-develop solutions with partners and customers, tailoring solutions for different industries and offering them as part of a new industry cloud platform. This unique system of product development and innovation driven by proprietary customer insights is one of the key factors in making Salesforce the fastest growing software company of all time. The power of the Privileged Insights System stems from its self-reinforcing nature: the more customers trust your company and get value from your products and services, the more likely they are to open up and engage with you. The more they do this, the better you can gain insight into what your customers want; the more insights you have, the more you can incorporate those insights into everything you do, the more you can Improve customer experience, products and services as much as possible, and build more trust and connection with customers. This is a real flywheel. In order for the flywheel to work and drive your company to success, you need to work in all three areas, starting with a brutally honest assessment of the real gaps you may have in each area, and being aware of creating A privileged insight system will not come without meaningful shifts. It’s easy to see how ignoring one area can render the entire system inoperable. In fact, if customers don’t trust you, they won’t open up. If providing insights is a one-way street, it may only attract the most loyal and enthusiastic customers. If you let your customers down and don’t act on the feedback, chances are you won’t get a second chance to get it right. This is a daunting task that requires thinking about data, research, and the entire touchpoint cycle with customers in a completely different way. But it’s something any company in any industry needs to take to stay relevant. We can’t think of any other ability that is so commonly needed.