DRIVING CUSTOMER-CENTRIC GROWTH

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DRIVING CUSTOMER-CENTRIC GROWTH

Transcript of DRIVING CUSTOMER-CENTRIC GROWTH

DRIVINGCUSTOMER-CENTRICGROWTH

Customer-centric companies are growing revenue faster than their competitors and are creating personalized, experiential value propositions based on data-driven insights. Over-performers are fostering a more customer-centric business culture and prioritizing the alignment of their Insights & Analytics strategy, structure and capability. Insights2020 focuses on what it takes to win and how to drive a more customer-centric mindset and approach within the organization.

More than any other ‘revolution’ in the last century, this one has the potential to truly upend everything we think we know about business and open real possibilities that only a decade ago seemed like science fiction. By 2020 there will be more than 50 billion connected devices worldwide; that’s seven devices per person. Welcome to the era of the connected customer!

It’s difficult to imagine the possibilities for the ocean of behavioral data these devices will provide. It means we will (finally) have the data available to better understand people and what they want – and to reshape our brands and businesses to become truly customer-centric.Being customer-centric is imperative in a connected world because traditional business value drivers don’t cut it anymore. Anyone can produce quality products, and manufacturing no longer provides a sustainable competitive advantage. Access to distribution channelsis now widely available, both on and offline. Thus, the true source of competitive advantage lies in understandingthe needs of customers and serving them in a fast, transparent and credible way: being customer-centric.

About Insights2020

Insights2020, led by Millward Brown Vermeer in partnership with ESOMAR, The ARF, LinkedIn, Korn Ferry and Kantar, is the largest global initiative to deliver the strategic frameworks and practical guidelines to help Marketing and Insights & Analytics (I & A) leaders drive customer-centric growth.Focus areas include:

• The role of I & A in driving business strategy and growth• Organizing the I & A function: Structure and Processes• Building the capability - equipping the function for success• Emulating leadership competencies of over-performers

We interviewed more than 325 business, marketing, andI & A leaders, and more than 10,000 practitioners from 60 countries participated in the online Insights2020 survey.This research was boosted with online behavior analysis by LinkedIn, and crowd-sourcing led by Wharton.

Insights2020 work builds on the findings of Marketing2020 which focused on helping global CMOs align marketing strategy, structure, and capability with business growth.The findings were featured in the July-August 2014 Harvard Business Review.

The results of the first wave of Insights2020 research are conclusive: there is a positive correlation between customer centricity and revenue growth over-performance. So, what are the drivers of customer centricity and how do we achieve customer centricity? When we started the Insights2020 journey, we anticipated that many of the findings would revolve around data science, software and technology. Instead, we found a much higher emphasis on the human element, organizational connectedness, leadership qualities and orchestration skills.

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Definition of Customer Centricity

Before exploring the drivers of customer-centric growth, let’s define customer centricity – what it is, and what it isn’t. It is not a mission, a process or an activity. Building on our experience and the views expressed in the more than 325 vision interviews we conducted, we define customer centricity as a business strategy that sits at the intersection of what the customer truly needs, the purpose that the brand wants to bring to life for its customers, and the way in which the business commercializes its relationship with its customers. A strategy built around customer centricity allows businesses to navigate and create change and drive business growth. Through the Insights2020 study, we identified 10 drivers within three dimensions that over-performing companies adopt to deliver customer-centric growth. The biggest challenge lies not in defining a purpose,

but in living it consistently across the whole organization, ensuring that it remains elevated and a guide to all business activities, not just an element of brand communications or marketing mix. Ultimately, purpose should be the foundation of all strategic choices and decisions and used to create a movement for employees and customers, a movement that has an emotional and societal impact.

As part of delivering a total experience, over-performers are also more likely to use data-driven insights to customize their offer (73% vs. 31%). This can range from customizing the actual product to customizing service, pricing, distribution or other elements of the marketing mix. Using Insights & Analytics is key here: knowing what your customer thinks, does, needs and wants is essential input in deciding how to customize the offer. Clearly, the level of customization differs by industry and depends heavily on the investment needed to move from offering “one-size-fits-all” toa fully personalized offer. A nice example is how telematics – pricing car insurance policies based on actual driving behavior instead of ‘risk-profile segmentation’ – is currently driving huge changesin the insurance industry through personalization.

1. Delivering a Total Experience: Purpose-led, Custom and Consistent

Customers expect much more than good products or services: they expect a seamless, consistent, tailored-to-their-needs brand experience that goes beyond functional benefits and is built on a clear purpose for why the brand exists. Winning organizations understand this: 80% of over-performing companies are invested in ensuring that all activities are purpose-led, compared to only 32% of under-performers. Great brand purpose is

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CUSTOMER OBSESSION

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Total Experience drivers

• Purpose-led• Data-driven customization• Touch point consistency

DRIVING CUSTOMER-CENTRIC GROWTH

“Everything we do is linked to a clear brand purpose”

OverPerformers CPG

UnderPerformers Retail Finance Leisure

80% 32% 56% 48% 40% 61%

based typically on a mix of inside-out factors (brand DNA, credibility, heritage, founder’s passion) and outside-in factors (customer needs, white spaces, societal shifts).

In addition to customizing offers and adding ‘depth’ to customer relationships, over-performers are very much focused on delivering ‘breadth’ – using Insights & Analytics to create a consistent experience across all touch points (64% vs. 29%). A great approach to delivering consistency is to start by focusing on a few select touch points and slowly expanding into more ‘moments of truth’ along the customer journey. Ultimately, over-performers, in close collaboration with agencies and partners, expand this consistency beyond their own touch points. Burberry – after years of relentless focus on revitalizing the brand through its own touch points – has recently launched an Apple Music channel focused on British music talent, extending the brand’s footprint in collaboration with agencies and partners, without losing focus on its highly consistent brand identity.

Finally, culture and leadership are an essential part of this dimension. Culture at over-performing organizations is skewed more towards ‘embracing risk and experimentation.’ In addition, over-performers tend to have a much more collaborative cultural environment. Collaboration is not so much driven by a different organizational structure – structure will probably remain for as long as organizations and P&Ls exist - but more a project-based team approach, ensuring that the right talent is available for the right project. Some people call these “just-in-time” teams.

centricity strategy must be embraced by all functions of the company (79% vs. 13%). Customer obsession should apply to all internal processes and decisions, as well as to all external partnerships and relationships. Over-performers tend to have much more strategic clarity because the customer centricity strategy is a priority for top leadership (91% vs. 48%).

Another way to embed customer obsession across the organization is to use a set of KPIs that drive the right behaviors. Over-performers base incentives on customer-related KPIs (45% vs. 25%), motivating employees to bring customer centricity to life.

Customer Obsession drivers

• Embraced by all• Leadership priority• Collaboration• Experimentation

DRIVING CUSTOMER-CENTRIC GROWTH

CASE STUDY EXAMPLE

Whiskas shows us HOW to link everything they do to Brand Purpose. Based on qualitative research, Whiskas identified the insight that people are fascinated by the big cat characteristics they see inside every little cat and the similarities with their big cousins in the wild: tigers, cheetahs, jaguars and panthers. From there, Whiskas elevated its positioning that had been about Care, to a truly purposeful positioning about ‘Nurturing the Cat’s True Nature.’

This purpose was not only integrated in all brand communications and activities, but also translated into the actual product, adapting the shape of the pellets and the nutritional profile of the product inspired by what the cats really need, rather than what their owners think looks nice. On top of the functional and emotional execution of the purpose, Whiskas joined forces with the World Wildlife Fund to create a societal movement and protect White Tigers in Siberia.

© Whiskas

2. Build a Customer Obsessed organization

The second dimension of customer-centric growth is to drive customer obsession throughout the organization, taking the voice of the customer into account in every business decision (87% vs. 22%). This means that the customer

“Incentives are based on customer-related KPIs”

OverPerformers

MarketingFunction

UnderPerformers

I & AFunction

45% 24% 32% 22%

GoPro is an example of an over-performing company that has truly embraced collaboration. They have taken collaboration to the highest level by using pictures and videos shot by users within their marketing materials. Instead of paying agencies and professional photographers to shoot the best material, they reward their users for sharing the best, real-life material. The company mindset is one of collaboration, all the way through to collaboration with end-customers themselves. The name of their product says it all:The customer is the Hero.

than the scores from under-performing companies and indicates that in these firms, Insights & Analytics are influencing all parts of the business planning cycle. To do this, we see some important changes emerging from the past. Winning Insights & Analytics groups are evolving from the traditional support function role to one of a pro-active team player, providing scenario planning and recommendations, and ultimately being regarded by the rest of the business as a fully integrated business partner that has a seat at the leadership table, driving strategy and real-time execution together with Marketing,IT and Finance colleagues.

This is exactly the evolution currently underway at Unilever. The Consumer and Market Insights (CMI) function is included in all major business decisions and all parts of the business cycles, and operates as a business partner. Under the guidance of Stan Sthanunathan, Unilever CMI is on a successful journey from being a Marketing support function to delivering on its mission to ‘inspire and provoke to enable transformational action.’

Insights Engine drivers

• Leading role of I & A• Unlocking the power of data• Critical capabilities

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© GoPro3. Creating an Insights Engine

The Insights2020 results show a third dimension of customer-centric growth: the mindsets, role and impact of Insights & Analytics. Fifty-one percent of over-performers indicate that Insights & Analytics are leading their business. This is four times greater

Profile of people working in I&AOver

Performers AmericasUnder

Performers Europe

37% 58% 40% 28%

47% 30% 59% 45%

General Business Leaders

Technical Experts

We also see significant differences between over- and under-performers in the instances of Insights & Analytics leaders who report directly into the CEO. For over-performing organizations this percentage is almost three times as high. At TATA, Harish Bhat, the head of Insights & Analytics, now reports directly to the CEO. We believe this is a bell-weather for the future.

None of the companies we studied complained about a lack of data. In fact, we would characterize the enormous increase in data availability as ‘Infobesity.’ Unlocking the power of this data provides an enormous opportunity for Insights & Analytics to evolve from ‘Data and Information Provider’ – delivering internal stakeholders consumer, market and competitive information – to actually becoming full partners and part of the solution. This includes contributing to the value proposition through personalization; touch point consistency, and, ultimately, business growth. Leveraging data will be key to delivering a total experience in the digital age.

Often the challenge is working across disparate data sets such as customer/consumer research, brand tracking, social media interactions, shopper data, revenue data and media results. These data sets are usually owned by different teams, or even different companies, and this is a reality that businesses will deal with for many years to come. This lack of connectivity between the data silos is not holding back the fastest growing organizations, however. To fully leverage the power of the data they possess, over-performers are centralizing ownership into ‘one source of truth’ and organizing into ‘expert communities’ that collaborate to turn data into actionable insights. Key to growth will be to move effectively along the path of unlocking the power of data across all sources. This starts with knowing what data you actually possess and includes connecting data sources to optimize for multi-channel experiences.

Evolving to a world where Insights & Analytics take a leading role in the business requires a significant change in the critical capabilities of the people and the Insights & Analytics organization itself. The results of Insights2020 showed marked differences between over- and under-performers in terms of the Insights& Analytics profile: over-performers demonstrated more of a business context mindset, more of a whole-brain approach, and they are better story tellers than their under-performing counterparts.

Critical Capabilities for Insights & Analytics at over-performers:

• Business Sense• Storytelling • Whole Brain thinking

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Allocate Budget for ExperimentationHow is your organization’s I & A budget

currently assigned?

It includes combining social media data with market research and sales data to enable a better understand-ing of channel dynamics and customer needs across different touch points.

59% 27%

14%

Well established tools & methodologies

Newer and innovative tools & methodologies

Truly experimental tools & methodologies

Having this business sense and preparation to have a leadership conversation is probably the most essential first step for Insights & Analytics to take on the path to a more leading role in the organization. This requires the capability to combine the science and analytics of what the data says (left-brain orientation) with the art of deriving creative recommendations (right-brain orientation) that resonate both internally and externally. Insights & Analytics significantly increases its impact by bringing data to life and turning data into customer stories. Much has been written about the power of storytelling, and people working in Insights & Analytics should recognize that ‘stories are data with a soul,’ and data-driven stories can be very, very powerful.

Making Insights2020 Actionable

The first wave of Insights2020 results has identified very clearly what solutions, cultures, structures and capabilities are more prominent at over-performing, customer-centric organizations. These ‘flags’ highlight some of the most important changes that will be needed for the Insights & Analytics teams to better connect with their colleagues, contribute to business growth, and learn to link everything they do tobusiness objectives.

The 10 drivers of customer-centric growth will be essential enablers of growth as the increasingly connected consumer allows us to understand their unique needs and behaviors in detail and traditional competitive advantages become commodities. The first wave of Insights2020 results prove that the brands and organizations that first adopt customer-centric strategies are reaping a competitive advantage and driving revenue growth faster than their competitors.To drive growth focus on the three dimensions: Delivera Total Experience to your customers; build a Customer Obsessed organization; and create a powerful Insights Engine that allows you to harness all the possibilitiesthe new Insights & Analytics has to offer your business.

Benchmarking to Identify Opportunity Gaps

Business, Marketing and Insights & Analytics leaders looking to apply these findings to their own business may be interested in benchmarking their own organization to the findings of the quant survey. An Insights2020 PulseCheck is available for in-house use. The PulseCheck requires a minimum of 50 internal participants and can be used to identify key opportunity areas for growth as well as challenges to address.

The Road Forward

True to the findings on the importance of experimentation and iterative improvement, the Insights2020 journey will continue as a movement to support customer-centric growth. The next phase of the journey will move from the what and focus on how to achieve the changes essential to driving growth. We invite you to share stories, lessons learned, proof-points, pitfalls to avoid, and suggestionsto enable the journey to true customer centricity.

Join The Insights2020 Movement

We invite you to join us in our quest to improve customer centricity via our 10 drivers and explore best practices and guidelines on HOW to best achieve this. Reach outto us to learn more!

Insights2020 PulseCheck with supporting scorecardBenchmark in-house results against a robust global cross-industry dataset, quantifying the revenue growth potential of addressing each driver.

TOTAL EXPERIENCE

• Business Sense• Storytelling • Whole Brain thinking

GAP VS.SCORE BENCHMARK AMBITION

73%49%53%

+2%+5%+3%

+9%

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INSIGHTS ENGINE

• Leading role of I&A• Unlocking the power of data• Critical Capabilities

GAP VS.SCORE BENCHMARK AMBITION

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-9%

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CUSTOMER OBSESSION

• Embraced by all• Leadership priority• Collaboration• Experimentation

GAP VS.SCORE BENCHMARK AMBITION

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Illustrative case, showing current scores vs. benchmark and the growth ambition per driver translated into a quantified revenue growth potential

Revenue GrowthPotential

+2.8%

www.insights2020.org [email protected]

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PulseCheck + Growth Opportunity Workshop:

• In-company PulseCheck quantitative survey• 5 – 10 vision interviews for opportunity identification and company context• Moderated by Millward Brown Vermeer; identify challenges & growth opportunities• One tailored data cut for additional benchmark • Quantified scorecard with 3 growth ambition scenarios based on Insights2020 data model• PulseCheck report and workshop debrief

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STRATEGY PURPOSE ORGANIZATION EXCELLENCE VALUATION

About Millward Brown Vermeerwww.mbvermeer.com

Millward Brown Vermeer is the only global marketing consultancy focused on unleashing purpose-led growth through the development and embedding of consumer insight-led marketing strategy, structure and capability.

We work with leading brands and marketing organizations across all geographies, B2B and B2C, and across all industries. Our global network includes offices in New York, London, Shanghai, Amsterdam, Mexico City, Sydney, Dubai, Sao Paolo, Singapore and Cape Town.

For more information, or to speak to one of our senior partners visit our website or contact us: [email protected].

Our Solutions

Millward Brown Vermeer works with Heads of Marketing, Brand and Market Research to develop and embed purpose-led growth marketing solutions.

We provide solutions to strategic marketing challenges, rooting our approach in consumer research, stakeholder understanding and financial analysis. We tie insights to dollars, the only universally accepted language of business.Our whole-brain thinking brings an intrinsically multi-lens and practical approach to all our work.

Leveraging Insights2020 for Your Organization

Millward Brown Vermeer can help you leverage Insights2020 for your organization. With our in-company PulseCheck, we can measure how your company stands on each of the 10 drivers, in comparison to over-performers. To learn more please contact [email protected]