Four ways to future-proof insights to maximise the ROI of CXby
Insight is a competitive differentiator. But if you don’t future proof customer insights, your competitors will - and capture market share!
Insights-driven organisations are capturing more of the market and growing revenue faster than any other organisation. Forrester estimated that in 2020, revenue at insights-driven organisations was worth a combined $1.2 Trillion (up from $333 billion in 2015).
True customer insights are improving how organisations deliver their experience strategy. As Forrester says, customer insights are now a “competitive differentiator that will make or break your long-term success”.
Why do you need to future-proof your insights department?
Customer insights are still in the early stages of maturity so if you move fast to enhance capabilities, you'll reap the rewards. Delay, and you risk missing out on those quick wins and low hanging fruit opportunities.
Here’s three key reasons why Insights-driven organisations are winning the competitive battleground:
The impact customer insights has on growth engines is real. We've long known that brands with superior customer experience bring in 5.7X more revenue than competitors lagging behind in customer experience (Forbes).
Forbes surveyed executives from Fortune 500 companies and found, “81% of executives who see their organisations as customer-data-driven leaders, report increased revenue over the past three fiscal years, compared with 61% of those who have yet to fully engage with customer data analytics”.
LiveAgent also reports insights-driven organizations were “112% more likely to have higher sales growth than their competition”.
2. Customer acquisition & retention
Constant refinement of CX strategy has now made it much easier to know how and where to acquire new customers but also retain existing customers. Insights-driven organisations are growing revenue 8X faster than competitors without built-in insights capability (Forrester). As previously mentioned, insights-led organisations have massively grown revenue in just the past five years and now account for $1.2 trillion in combined revenue.
One way they’re achieving this is through new customer acquisition. Digital advertising was the go-to-market strategy of choice for decades. As CX has gone mainstream, there is now a strong expectation to deliver better overall experiences for potential customers early on in their journey.
Michael Scharff is a founder, CEO and Forbes Council Member with 20+ years experience in the retail and ecommerce industry. He says: “Today, it's not how a brand gets a visitor's attention that matters, but whether they engage long enough to convert to a customer - and that comes down to consistently delivering a better customer experience (CX) throughout the entire journey.” (Forbes).
Focusing on the needs of customers also improves your ability to retain customers for longer, growing long-term revenue through increased lifetime value (LTV). Statista’s market research found competition for US customers is strong in retail (online and general), finance, telecommunications and travel. Average churn across all industries in the US market is currently 25% per annum (Statista).
Delivering the best experience for customers on the other hand, reduces churn by 10% (CustomerThink). This is significant because a 2% increase in customer retention is the equivalent of increasing profitability by 10% (SuperOffice). Therefore, deeply understanding how to deliver the best experience for customers can potentially increase profits by 50%!
3. Edge out competitors and win market share
There are three key ingredients for success. The first is deeply understanding how CX delivery aligns with customer expectations. This knowledge will come from customer data already sitting in-house.
The second is knowing how to respond and deliver the most suitable experience in a way that aligns with high level organisational objectives. Lastly, install closed loop processes where deep learnings of what works and doesn’t work are made accessible to everyone.
What does future-proofing look like?
Customer insights are an insurance policy for your organisation’s long-term success. The challenge is how to leverage the insights team and all their available in-house customer data to maximum effect. The customer insights community has had time to develop.
In 2015, enterprises were focused on quantitative measurement, analytics and big data. Now the focus is on making the most of all sources of customer data, both qualitative and quantitative, extracting deep insights and making them accessible across the organisation. Everyone benefits from this new way of doing insights.
Insights-led centre of excellence
The insights Centre of Excellence (CoE) is a cross-functional group responsible for delivering deep, contextual customer insights to their organisation. To succeed, you’ll need more than the right people and processes in place.
What’s required is a top down approach where impetus to make decisions with insights starts at the top and filters down. In addition, a CoE is built on a strong cultural foundation of question everything, measure everything.
Insights are the epicentre of decision making
To be truly successful in the long-term, customer insights must be a part of your organisation’s decision-making DNA. Insights should be embedded into all levels of decision-making - strategic, operational and day-to-day. Where companies go wrong is they bury the insights function inside a single customer-centric department.
In the end this leads to siloed insights that struggle to see the light of day. When insights are the epicentre of decision making, the insights function is no longer a single business unit but integrated across the entire organisation. Insights are accessible for every department and those insights drive true customer-centric decision making.
Question and measure everything
Customer-centric organisations pull together all available sources and channels to make data driven decisions. They’re naturally curious and want to understand the drivers behind customer behaviour. Functioning CoE’s close the loop with their own organisation by objectively assessing business outcomes. They’re never afraid to continuously learn and experiment.
They’re asking the right questions of CX initiatives and overall strategy. Is this working? What’s the ROI/impact on key metrics? How can we improve?
Curiosity, however, is applied at all stages of the process from deciding where to collect voice of customer data, interrogating the data through to measurement, refinement and closing the loop.
The impact of curiosity is difficult to quantify but a customer-centric, curious culture should yield the following returns:
- Executives are making decisions with confidence because they feel closer to the customer.
- Opportunities for growth and CX improvement are regularly identified and actioned using customer insights.
- The customer insights department has a strong emphasis on relationship building across the organisation. These departments in turn consider the insights function as invaluable partners in a shared mission.
- Department leaders make decisions with customers top of mind and they have true insights to support those decisions. They understand the impact their action is likely to have on overall customer satisfaction and act accordingly. They are essentially "thinking with insights".
Sharing insights widely with the right people in your organisation is another way you must future-proof customer insights. Customer insights is now a team sport requiring effort from every department and executive in your organisation. Without this mindset change, insights won’t get to the people that need them most.
Insights shared widely and made accessible to everyone are considered democratised. You’d be hard pressed to find a CEO that doesn’t agree with this sentiment, however it’s key to ensure democratised insights get into the right hands at the right time.
Organisations are drowning in customer data
The problem with democratised insight is there’s just too much information for analysts to make sense. We’ve found they’re drowning in customer data. They know they have enough in-house Voice of the Customer (VoC) data to find insights, but identification of the highest impact insights are hard to come by.
Let’s pause and consider the true scale of the challenge. These numbers from TechJury highlight the challenge ahead for the insights community:
- In 2020, people created 1.7 MB of data every second.
- By 2022, 70% of the globe’s GDP will have undergone digitisation.
- In 2021, 68% of Instagram users viewed photos from brands.
- By 2025, 200+ zettabytes of data will be in cloud storage around the globe.
- In 2020, users sent around 500,000 Tweets per day.
- By the end of 2020, 44 zettabytes will make up the entire digital universe.
- Every day, 306.4 billion emails are sent, and 500 million Tweets are made.
Most of this data is hard to quantify because it’s qualitative.
Making sense of an overwhelming amount of data
Forrester identified several ways that customer-centric organisations are getting on top of this problem:
- Insights are centralised but cross-functional, assisting multiple departments at the same time with insights that help move them closer to their departmental objectives.
- The data which insights teams are analysing is high volume and often in-house. While much of this data is already accessible, there are challenges centralising that data so it’s meaningfully understood.
- There is a strong appetite to constantly source new customer data that goes beyond what’s already captured in-house.
- By getting control over customer data and sharing it widely, they’re supporting the right individuals and the right departments to make informed customer-centric decisions.
Customer-centric organisations make use of all levels of the DIKW pyramid to make sense of increasing volumes of customer data and achieve true insights (wisdom).
More thought needs to be put into not just accessibility but also understanding. Insights platforms play a key role here. You need to remove the bottlenecks at your organisation blocking people from being able to self-serve and deploy platforms and deploy technologies such that people can get the data themselves and find the information they need to.
In terms of direct information flow, democratised insights are made accessible to all but should be emphasised with the right people. How do you know they’re the right people? They are the business units capable of converting specific insights into tangible action in a way that helps your organisation achieve its objectives. If other departments also get value from that same piece of wisdom to improve CX, then all the better!
Storytelling to improve decision-making
The final piece of the democratisation puzzle is storytelling. Sharing the right insights, with the right people at the right time is meaningless if they don’t understand the significance of that wisdom. Impact-based storytelling is key to ensuring your stories are understood.
Executives are often the furthest away from customers. "The higher you go in an organisation, the less leaders feel like they have the time to devote to thinking strategically about the big picture" (LSA Global). Storytelling ensures they understand the high level drivers and impact their decisions have on customer experience, key metrics and business objectives.
It’s no longer enough though to report high level metrics. If NPS is up, executives now expect to know exactly what customers are loving about their experience and why. If NPS is down, they want to know all the issues at play and what can be done to fix each of them. At the strategic level, visualising insights helps executives align on the highest leverage areas of concern in order to prioritise and take the appropriate course of action.
According to Gartner, half of business decisions are based on gut-feel alone. Taking out an insurance policy against gut-feel or the phrase “in my experience..” means demonstrating the impact of CX on key metrics. Impact must then be put through the lens of a storytelling framework to maximise understanding.
Demand for insights is rising
Another reason organisations drown in customer data is because there’s simply more internal demand for insights. Customer-centric organisations use insights to make informed decisions that increase revenue, build customer loyalty and capture market share from less customer-centric competitors.
A report from ESOMAR 2021 found:
- Demand for insights increased 12.5% between 2020 to 2021.
- 64% of surveyed teams believed demand will increase in 2022.
- 50% of US insights teams were growing in 2021.
Future-proofed insights teams are able to scale their work to meet this demand using technology, rather than headcount or increased outsourcing/offshoring.
Text analytics tools don’t have a great reputation, having always over-promised and under-delivered results, but new technologies on the market are turning this perception around. The promise of a dedicated insights platform is putting power back into the hands of in-house teams to do the work previously outsourced to costly market research agencies.
As Forrester noted in their recent 2021 Forrester Wave report on customer feedback management platforms,
“Text analytics is table stakes, but not all text analytics capabilities are equal. Challenges with a vendor’s text analytics is a key reason why enterprises add other technologies to their stack.”
They’re able to improve depth-of-insight and deliver increasingly detailed insights that move the needle for their organisation.
These technologies are self service, meaning they’re intuitive and easy to get started with and they remove the need for middle men. Organisations are free to then grow their in-house team without worrying about weeks or months of training and onboarding for those new team members.
Here’s four ways your organisation benefits from self-service tools:
- They make it easier to democratise insights by making dashboards accessible to non-technical users.
- In-house teams can produce the same outputs as external agencies, but have the added advantage of domain expertise, understanding specific nuances of how their organisation works. Where external agencies can come and go, in-house teams accumulate knowledge over time. As this time knowledge compounds, so too will their quality of insights.
- Insights teams can deliver reports as required and answer questions in real-time. When business leaders have questions, you can delight them with answers straight away rather than waiting for a response from an external agency partner.
- There’s no need to outsource or offshore tagging/categorisation of customer issues because these self-service tools will automatically do this for you. Unfortunately, some vendors claim to be automated when in fact they’re offshoring the tagging without your knowledge. True insights are found without any human intervention or pre-training. Technology should reveal the problem areas and empower humans to find what’s important to their organisation.
Reactive vs. proactive insights team
There’s no denying customer experience is a competitive differentiator. Most organisations want to deliver the best customer experience but they’re let down by reacting to events rather than looking for improvement opportunities. A proactive insights team will reduce the number of "oh no!" or "huh?" moments the business experiences by sharing insight into experiences or journeys before they become a problem for the business or lead to unexpected outcomes.
It’s now possible for organisations, strongly invested in CX, to turn to the customer insights function and ask, "What’s new that we should know about?" and what are the key CX issues/opportunities across the past 30, 60 or 90 days? The benefits are tangible. SuperOffice reports “taking initiative could increase customer retention rates by 3-5%”. As we’ve already established, this has the potential to grow profits - in this instance by up to 25%.
Moving from a reactive to a proactive insights team requires the right mix of people, curiosity-focused culture change and technological capability. On the people front, consider if your insights function is understaffed. We’ve found that Kapiche reduces time-to-insight by up to 90% and ensures analysts can focus on high leverage activities such as emergent trends analysis.
Curiosity is essential as well. Insights teams should put on their detective hats and seek out new insights into what’s changed about customer behavior or preferences across a defined period of time.
Finally, on the technology side, how are you scaling up your insights delivery? Executives want to make proactive rather than reactive decisions. Deeply understanding emergent and trending issues impacting all your customers, across each touchpoint in their journey, is key to building up their confidence in customer insights.
Key learnings: Four ways to future-proof insights
Customer insights are the best insurance policy your organisation has for ensuring long-term success. If you don’t move now to future proof your insights function, you can bet competitors will, and they’ll reap the rewards.
Here are four steps you can take right now to start the transformation process:
- Insights are the epicentre of decision-making: Ensure insights are delivering maximum value to business leaders. How will you know you’ve achieved this goal? When you get to a point where those business leaders make every decision with customer insights. They are "thinking with insights"
- Democratised insights: Ensure insights aren’t siloed and are widely accessible across the organisation. Value comes from sharing the right insight, with the right people, at the right moment in time. If other business units benefit along the way, then all the better!
- Make the most of self-service tools: Technology has advanced quite a long way in the past 12 months. In-house insights teams can now do more, for less while also getting a deeper understanding of customer behaviour drivers, journeys and the impact CX initiatives have on key metrics
- Insights should be proactive not reactive: If COVID wasn’t in the news all the time, would you know to look for it in customer feedback and measure the impact it has on NPS/CSAT? Dedicated insights platforms are now capable of identifying emerging trends in qualitative, unstructured customer data - including the problem areas you didn't think to look for or assumed weren't impacting key metrics.
I lead a talented team in building technology that makes understanding data a breeze. Companies around the world use Kapiche to quickly understand and act upon customer opinion through NPS, CSAT, reviews, surveys, and social data.
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