Why Customer Insight Fails

Ever since I started answering questions in Quora, I’ve started receiving a steady number of requests for answers – I obviously can’t answer them all (even if I had all the answers, I just don’t have the time) but a recent question seemed particularly relevant to some recent experiences I have had and why I take a hidden needs approach to understanding the customer.

“Why does customer insight fail?”

In order to answer this great question, we first need to unpack what customer insight actually is and then understand what failure would look like.

 One definition of customer insight I particularly like is:

“A non-obvious understanding about your customers, which if acted upon, has the potential to change their behaviour for mutual benefit”.

How could this possibly fail? 

Well, marketing departments and product innovation teams are encouraged to listen to the “voice of the customer” in order to gain insights. However, the most commonly used methods of gaining insight into customers’ needs, such as focus groups and surveys, can have significant limitations.

In responding to questionnaires and interviews, customers often struggle to articulate their needs because they are not consciously aware of the limitations of current products and cannot imagine the sort of products that will be feasible in the future.

Henry Ford is famously quoted as saying “If I had asked people what they wanted, they would have said faster horses.”

Another example example is the SMS text message, which was originally conceived as a clever way for staff of mobile operators to contact each other, rather than as a consumer product. However, SMS messaging answered the “hidden need” for people to be able to contact each other using a short message when making a phone call was deemed inappropriate—and by 2010 some 6.1 trillion messages were being sent every year.

The SMS itself may now have competition from other messaging platforms such as WhatsApp but the need is still as relevant today as it was a decade ago.

Going native

One of the most effective approaches to uncovering hidden needs is ethnographic market research, which combines the systematic observation of how people interact with products and services with contextual interviewing. Ethnography is the systematic study of people and cultures. It is designed to explore cultural phenomena where the researcher observes society from the point of view of the subject of the study. 

These studies typically need to be conducted in the field where the customer actually encounters the issues that the new product or service is being designed to overcome. However, there are techniques such as cognitive mapping, that can be used when in-person visits just aren’t appropriate.

Observing individuals and understanding discrepancies  between how they describe an event and the event itself can deliver powerful insights. Properly understanding the context of the environment they work in can also be  enlightening.

What does failure look like?

Well failure can manifest itself in a number of ways, but the most enlightening statistic can be found in research published by Cass Business School that up to 90% of all technological innovations fail. 

The perceived causes of failure are diverse and complex, but I would suggest that a lack of real insight is the root cause. This arises from not knowing what the right questions to ask are, or how to actually ask them.

If you feel that your organisation is locked out in the dark and would benefit from some help to shine some light into the unknown, then contact us to see if we can help.