Whether you sell to businesses, consumers, or both, understanding the behaviors and buying habits of your customers gives your organization the ability to make strategic business decisions and stay on the bleeding edge of industry innovation. That’s where a market research or insights function comes in.
Insights-driven companies transform customer or consumer data into insights and make those insights accessible and actionable across the organization. This ultimately allows organizations to make smart decisions informed by customer insights and proactively deliver great customer experiences.
Becoming insights-driven pays off in big ways for businesses. According to Forrester, mature insights-driven organizations are 2.8 times more likely to report double digit year over year growth and 1.6 times more likely to report that using analytics has increased their revenue than their less advanced peers.
However, despite the significant benefits of collecting and analyzing customer insights, many businesses don’t employ successful strategies to turn their insights into action. In fact, only 49% of business decisions are based on the analysis of data and information, relying on the personal opinion of the internal decision maker instead.
If the benefits of being an insights-driven company are obvious, why are so few businesses making insights-driven decisions? There are four common reasons that businesses struggle to integrate customer insights into their strategic decision-making.
1. Departmental Silos
If you have insights functions that have built up over the years embedded within your lines of business (LOBs), you may face the hurdle of knowledge silos. No matter how good each of your insights teams is at influencing decisions within their respective LOB, it is common to lose sight of the bigger picture.
About 55% of companies are still operating with siloed information and knowledge today, with each department making its own decisions without considering decisions at a company-wide level. Often, the result of these silos is that the company lacks a holistic view of the customer. This kind of information segmentation can lead to non-strategic and disjointed decision-making, which directly impacts the customer experience.
2. Fragmented Technology
Chances are if your siloed teams aren’t collaborating, they are also relying on separate tools and technology. Many organizations struggle with legacy intranet sites that require complex levels of permission and are difficult to navigate and search. These are typically coupled with layers of other tools, also attempting to centralize insights and customer information.
In fact, only 17% of companies have fully integrated their customer data across all areas of the organization. Knowledge silos restrict companywide innovation by creating pockets of information within departments. They also create systems of data and information in one area of the business that are incompatible with other department’s systems of data.
3. Misinterpretation of Data
Misunderstanding customer insights is another detrimental problem for a company trying to become more insights-driven.
To distribute reports, many companies rely on dated intranet sites that contain lists of files—with no context or summaries and no easy way to search for specific findings. In other cases, business and operational teams are given access to folders and expected to hunt for information. If they are reviewing reports with no additional context or guidance, there is the added risk that they are misinterpreting the findings.
As teams become increasingly distributed and the need to access research on demand increases, your insights distribution also needs to adapt so stakeholders can easily find, understand, and act on the most important takeaways.
4. Knowledge Hoarding
For some companies, it’s not only a lack of tools and organization that are an issue but also a corporate culture of knowledge hoarding. To unlock the full potential of customer insights and to make strategic business decisions, it is crucial that businesses create a shift in corporate culture—to a culture that promotes knowledge engagement.
Insights teams must think strategically about how to expand the reach of their research beyond the line managers who commissioned it. Additionally, decision-makers across the organization should be encouraged to ask questions and participate in conversations about research findings. This will help get a dialogue flowing and keep stakeholders engaged with insights.
Time for a Change
Positioning customer insights at the forefront of your business, and empowering your workers to make better decisions based on those insights, is vital to being a successful customer-centric company. By arming internal stakeholders with the knowledge and data they need to make informed decisions, your company can streamline processes, improve product offerings, develop highly targeted messaging, and gain new advantages over competitors.
Insights-driven companies are growing at an average of more than 30% annually and are twice as likely as their peers to be leaders in customer loyalty, according to Forrester Research. This shows the importance of developing strategies that place insights at the center of your organization. The good news is that companies taking the initiative are reaping the benefits. In fact, businesses with the strongest cultures of insights-centricity were twice as likely to have significantly succeeded their business goals in the past year as their less mature peers.
It’s a critical time for organizations to re-evaluate their insights strategy to derive more value from their investment. Best-in-class companies are re-thinking not only the importance they place on insights, but also the tools, processes, and culture that play a part in creating an insights-driven company.